What needs to be restructured is the U.S. tax-and-trade regime.

Amen, but there’s need of further reforms as well.

God Bless you Pat Buchanan. You are like the Prophet Elijah shouting truth in a world full of scoundrels and apostates.

Pat,

Neither you, nor anybody else I’ve read for years understands the root causes of why American manufacturing has lost ground for 40 years.  First and foremost it is hubris.  American executives have all too often believed their own BS; Detroit executives being prime examples of this genus.  I’ve for years argued with professors in the field of manufacturing and ancillary fields as well as executives in the companies I’ve worked in that pride goes before the fall in all of its manifestations.  The level of ethnocentrism in this group is exceptionally high; that is, “Those Asians, etc., don’t have the brains to compete with us.” I’ve heard that for years.  Curriculum Vitae: BSEE, MSIE, MBA focused on Manufacturing Management and Strategic Planning plus 30 years of manufacturing experience.

The other major obstacle to American world-class manufacturing is Wall Street.  Yes, I do mean Wall Street.  It has driven executives into the frenzied mode of short-term profits.  Both manufacturing executives and Wall Street profit from such a myopic focus.  World-class manufacturing takes years of ongoing effort to lead the pack.  Short-term profitability and world-class manufacturing are mutually exclusive.

I was and still am a dedicated disciple of Dr. Edward Deming.  Detroit told him to take a hike back in the 50’s.  He went to Japan and the rest is manufacturing history.  No bailout will change Detroit.  It will just continue to degenerate.  The only cure is death and resurrection by those that understand what world-class manufacturing is and known how to get there.  The same is true for Wall Street.

http://en.wikipedia.org/wiki/W._Edwards_Deming

I’m extremely repulsed at the moral hazard that these bailouts create.  And a reason those with their hands out got into the positions they are currently in is because they knew in their heart-of-hearts they could rip-off the taxpayer if things went south though their bought-and-paid-for politicians.  As my dad told me many years ago, “Son, never trust a man that makes a living betting with other peoples’ money.”

That vast amounts of taxpayer money is going into the hands of those crooks, swindlers and fraudsters that caused the mess in the financial markets shows the true face of American Capitalism.  It is and always has been corrupt.  There has never been Laissez-faire Capitalism, never.  It is but an idea, never to be practiced on this earth in a complex, industrialized society. Those in power will NEVER allow free markets.  It has always been State Capitalism with varying degrees of how much the deck is stacked and the game is rigged; against those that actually create wealth.  No worker on Wall Street has ever created $1 of wealth, NEVER.  They are only rapacious, greedy crooks that have stolen vast quantities of money though their complex Ponzi Schemes.  Farmers, cattle ranchers, those in the extraction industries, those that design and build products consumers want to purchase create wealth.  Service industries do NOT create wealth.  They and Wall Street are dependent on those that create wealth and we have, for 40 years or so, eviscerated the industries that create wealth though various shorted sighted means; i.e. short-term profits over long-term viability.

Danium of the Day: An industrialized country with a declining manufacturing base is a declining country; no mater the level of financial machinations.

^ Hong Kong’s manufacturing decreased by 3% last year yet enjoyed robust growth.

With a nation of 300 million, there is no way that hubris could have survived if competition had been allowed. American corporations only face foreign competition. Domestic competition is non-existent because the unconstitutional regulatory framework is geared towards big corporations at the expense of small business. Tax and environment regulations, enacted with a total disregard for Constitutional limitations on federal government power, have more to do with the decline in manufacturing than any thing else.

Dan Theodore
Your point about the obsession in American business management circles with short-term profit making to the exclusion of long-term strategic thinking is an excellent one and is no doubt a primary cause of the demise of GM/Ford/Chrysler. Basing executive salaries on profit figures, share prices, and the like is no doubt a very strong incentive to think short-term. Indeed, short-term thinking seems to be one of the defining characteristics in most areas of Western Societies. Although these companies deserve to fail, I agree with Mr Buchanan that national interest cannot allow such.

Ian,

If we had allowed Chrysler to fail in the late 70’s, GM and Ford would have had the wrath of doG blown up their collective backsides and not be in the shape they are currently in.  More money down a rat-hole is just more money down a rat-hole.  The pain must be taken and the sooner the better because it will broadcast the message loud and clear that “State Capitalism” as they know it is dead.  And, those that head corporations are responsible for their actions and will feel the pain if they don’t shape up.  We are just enabling bad behavior with what Pat Buchanan is promoting, as many have done before with the same result; more bad behavior.  But, the power elite want their money and more of yours until they are stopped.  And, they will get it until we build the proverbial gallows.  Here’s a blog that gets to the point:

http://mjperry.blogspot.com/2008/09/lessons-from-1979-chryslyer-bailout.html

We throw kids that sell pot on the streets in jail for extended periods of time.  Yet, those that destroy our financial institutions are rewarded with generous amounts of taxpayers $$$.  How does that square with you???  As Rome and Britain went, so do we; anybody for “bread and circus?” I am truly discussed beyond the pail.

While I often agree with Buchanan, I do not see how throwing endless money at these companies will work. All that is being done is delaying the inevitable. Manufacturing is vital to remain a world power, saving the big three is not going help though, the unions are the ones that constrained the big three and consistently support the Democrats.

If proof of the Danium of the day were required one need look no further than the UK.

As concerns foreign ownership it is better to have that than no industry, no employment and no consumption at all.

“those that head corporations are responsible for their actions and will feel the pain if they don’t shape up”
Dan, we all make non-malicious errors of judgement in our professions from time to time. If such judgement errors were punishable by law, the ranks of businessmen would be significantly slimmer. Another problem with your approach is that it is often difficult to know who the blame for the demise of a corporation is properly attributable to. In the case of Ford and GM, you could probably look back at 30 years or more of mistakes that have brought them to this point. To me, the blame lies more with the corporate culture of the country. Remember that the major factors that have led to these sudden problems in the automotive industry are the escalation in fuel prices and the credit crisis. To my knowledge, Ford and GM executives didn’t have a hand in either.

If we can bailout Wall Street crooks, we can bailout the American auto industry....

If you don’t understand which is more important, then you really need a thump in your head.

It was “libertarianism"--the idiocy of Lazy Faire, that created this problem, and we don’t need more of the same of that silly utopian fantasy of a “free” market, that doesn’t exist, never existed, and will never exist....

Commies and Libertarians, opposite sides of the same bad coin...!

Great article. We need GM, Ford and Chrysler.  We don’t need the Republican party.  Mike Pence, Mel Martinez, George Bush, John McCain, Lindsey Graham, ... are people we never needed in high office.

“As GM Goes, So Goes the GOP”

and this is upposed to make us want to SUPPORT the bailout?

If the auto companies cut back on the billions od dollars of advertising on tv and newspapers they would have enough money to keep them going for a long time. Nobody buys a car because of this advertising.

So Ronald Reagan is a loony Libertarian. And Pat said vote for McCain who I am sure would have reversed his those jobs are gone so get over it statement to Michiganders.

The future of conservatism is to straddle both sides of the issues and hope they kind find enough idiots to vote for them. Flip flopping as an ideology.

Just a fact. Our dear allies South Korea export 400,000 cars to the United States each year. South Korea imports a total of 4,000 cars includine BMW Mercedes and Toyota. Why is that? It is certainly not becasue that racist xenophobic country is playing us for fools is it? Just asking.

I was in Seoul several years past and toured their then sorta new War Museum. Interesting because I’d thought the U.S. bailed out South Korea in their war with the North. Somehow the museum omitted that small fact. Interesting too how the exhibited Sherman tanks were labeled as being made by I believe it was Samsung. I never knew any of that. Live and learn.

“....lest we violate the tenets of some 19th-century ideological scribblers that the old Republicans considered the apogee of British stupidity.”

absolute brilliance.... rhetorical genius.... B-R-A-V-O Mr. Buchanan!

I live/work in areas with HEAVY asian populations - chinese and korean.... i was raised by a welder - his company was the LAST AMERICAN-OWNED press builder.... i consider it PATRIOTIC to “BUY AMERICAN”.... well, it’s second nature for me to notice what folks drive - I HARDLY EVER SEE ASIANS DRIVING GMs, FORDs or CHRYSLERs.... start, take it up -look ‘round you - notice what asians drive....

.... me thinx AMERICA could open up a H-U-G-E can of whoop-arse -
I-F we dismantle the EmPiRe and reallocate our resources to real value-added production.... imagine
THAT America....

AIG can get 250 million for their corrupt execs to get SPA treatments. The Big 3 can’t get one tenth of that for their survival? And some “Americans” rejoice because they want to see their own auto industry disappear as punishment for the past. Mind-boggling. Why is the auto industry alone in deserving the death penalty, and for what?

What Republicans are doing is no surprise, these people are the most corrupt bunch you can group together aside from bankers, drug company and weapons execs. It’s a shame we couldn’t vote all Republicans out. But that will happen soon enough, I pray.

Good and true comments by Boils and Daniels.  Asians don’t (1) buy (2) rent (3) hire (4) admit as students (5) supervise Ph.D. theses (6) teach undergrads who are white unless they have no other option and it somehow promotes Asian interests to do so.  As pointed out above by Boils, they don’t acknowledge our existence except for limited periods.

Something needs to be done. They are too big to die? But they are too big to create effective cars or deliver any profit to us. Japan cars are assemblied here in US plants, Ford cars are assemplied in Mexico. Thus the quality. Yet, Worker Unions demand twice as high salaries as Toyota pays them. Let them die, and let’s help new enterpreneurs to pick up from existing workforce and infrastructure without old obligations and stupidity.

Right on, Pat!

The question is could the stupid party (the republican party) now be so stupid as to cut its own throat for the [very] last time? If every step of the way from the letter ‘A’ thru the letter ‘Y’ they have done so, doesn’t it seem likely then that they’ll do the next step to the letter Z, and get it over with?

It’s obviously what Wall Street wants, since they are global, and more in bed with MITI the Japanese Government arm which funds all of Japanese exports into the U.S. especially autos…in other words the Japanese are STATE capitalists in behalf of their own people the Japanese, and pay off our top dogs (whom we just bailed out on Wall Street) who are State-capitalists (thanks to the American taxpayer) but only for themselves, not for the American people.  I used to work for the Japanese, and they had no respect for these few greedy slobs on Wall Street whom they had to pay off (one way or another), but on the other hand pitied us normal Americans. They said at least Japanese people even from the top down are in favor of Japanese people, but all of the Americans are the slaves of the few Americans at the top, whom the Japanese referred to such few Americans as the commercial ‘peaks.’

What about O’bama? … He’s only the human face now of this same American status quo. Look at the lists of who’s being considered for key positions in his cabinet. There are NO labor or community leaders on Obama’s list for key positions. So it will be interesting to see if he suddenly does a thumbs down on the auto industry as well. Every single appointment the President-elect Obama is considering was and is an architect of the financial deregulation which allowed this false crisis to be orchestrated by the good ol’boys in behalf of securing even more power, not to mention the cool $700 Billion dollars into the hands of this Wall Street good old boys network. And they’re all going to show up now in Obama’s cabinet. These same banking conglomerates, again call the shots.

In other words Obama’s ‘strategy’ is to put the very same Foxes from Wall Street who orchestrated the crisis thanks to the deregulation they pushed (and who financed Obama’s campaign for the most part) in charge of the chicken coop, *again.  It’s ‘sick’ Pat, it’s very sick. No? It started with the Federal Reserve Act of 1913, and has been going the same way ever since. There’s no denying it.

There can be no meaningful solution to the current economic crisis (orchestrated by these good’ol boys, and so now, very real) unless there is a freezing of speculative trading and a subsequent disarming of financial markets. John Maynard Keynes understood that is what had caused and what was prolonging the great depression of the 1930’s – 1940 and would have continued except for the next inevitable world war, thanks to this very financial system. Keynes proposed the disarming of financial markets as the means toward establishing a multi-polar international monetary system. (J. M. Keynes activities 1940 & “The Collected Writings” Royal Economic Society Vol. XXV (25) London, 1980, p. 57) But Obama now is just a pawn in their game.

Pat remember “The Adventures of Huckleberry Finn” ? … After being taken in by them-the phony ‘King’ & ‘Duke’-Huck just wanted to be ‘shut’ of them finally (but he just couldn’t get rid of’em for the longest while). Same thing with the American powers that be, Pat. We all just want to be ‘shut’ of them, but we just can’t seem to get rid of them. And in Obama, yup, you guessed it, they’re BACK. (Looks, like they’re having their way again, as usual, with ‘big Jim,’ sadly.  While pretending to be our & Jim’s “friends.” We just can’t get rid of them-commerical-phony King(s) & Duke(s), can we, not even with Tom Sawyer’s help.)

The root cause of American industry’s troubles lies in the myriad of parasitic groups our system forces us to support: Washington has saddled us with a legal system that is more costly than the entire manufacturing sector, yet produces nothing and resembles more a gambling parlor. Washington set up a framework that allows a non-producing financial industry and assorted robber barons with the means to buy, cripple, and then repackage manufacturing entities for sale to an unsuspecting public at inflated prices, enriching themselves in the process at the expense of the productive population.  You wonder why? Representatives of these parasitic groups are the ones that dominate all three branches of government. Or are there any ex-manufacturing workers and farmers in Congress?

Good summary there Old Atlantic. The only time Asians acknowledge your existence is when you’re handing them your cash. Even then most likely they’re looking at your hand, not your eyes.

“But that means Americans will work for and depend on foreign companies for a necessity of our national life as vital as the imported oil and gas on which our cars and trucks operate. All the profits of the mighty automobile industry in America will be sent abroad.”

So what? You have no problem with Asians working for Americans? Artificially preserving a company which is makes an inferior product does not help America. It simply ensures that America will become the kind of third rate economic region that Asia used to be. Reading your article brings me to the realization that you 1) do not understand economics and 2) are really a Jacobin and a xenophobe.

“But the most magnificent industry, the auto industry that was the pride of America and envy of the world, we surrender to predator-traders from Asia and Europe, lest we violate the tenets of some 19th-century ideological scribblers that the old Republicans considered the apogee of British stupidity”

By “19th century scribblers” I assume you mean the great political economists who have demonstrated and understood what you still fail to understand: That as far as ‘predators’ are concerned, it is the Nation-State, not business that we ought to fear. Mercantilism (which you advocate) is as destructive to a society as socialism, in fact it is just the same error under a different mode. It is non-nonsensical to say “preserve this great industry or company from destruction” if the great industry in question is imploding. Its implosion is proof that it is not great.

“Predator-traders?” How about predator nations, like the US, which enforce the value of the dollar with the barrel of a gun? You cannot stop economic realities from being manifested, anymore than you can cause 1 + 1 to equal 3. The appropriate response is to do nothing and allow whichever firms and companies have wasted their resources and which cannot succeed without using the state to steal from the rest of us, to collapse. In truth, not all would collapse, they would simply be forced to cut down to the point where they can pay for themselves and to produce a product which is worthy of the American dream.

One more point: I find your contention that the Japanese are a “predator-nation” supremely ironic. Last I checked, the Japanese were not forcing anyone to buy their cars. But everyone nation is forced to use American funny money as the reserve-currency for his nation. When someone (like Saddam Hussein) attempts to trade in another currency (like the Euro), he discovers that his status has been switched from “friend of America” to “terrorist dictator”, meanwhile other more evil men who do the pentagon’s will are called ‘allies in the fight against terror’. Baloney.

Pat read my post above.

You actually KNOW who the predators are, where we the American people are concerned.

Either to the pure (like Pat) all things [on the homefront] are pure.

Or he’s e’Scared man too… he don’t vant to lose his job, man...or vorse?

Start w/David Rocky...and down/or up to stan fischerman… et al. Who are they kiddin anymore?

As for werner H. above, shame on himself, he don’t tell 1/2 truth… it’s worse he tells 3/4 ones.  he must be making a bit of money… that happens. Sadly.

I want to join sulla’s army… where sulla (if you’re listening), can we sign-Up?!? … at the most recent, closed G.M. plant?

For decades US manufacturing has faced international competition from foreign companies that are heavily backed by their own governments. The governments back their own companies in the international arena through any number of tricks: buying down interest rates on loans, directly subsidizing the sales, hiding import duties through VATs. Uncle Sam doesn’t support U.S. industry in this way, forcing American companies to compete on an unequal playing field. I’ve seen this in the geothermal energy field, an international zone of competition if there ever was one. The Department of Commerce will not and cannot support American companies overseas.  It merely “promotes” trade. The policy is suicidal. Mr. Buchanan expressed it all beautifully.

A WSJ article recently estimated that GM and Ford have burnt through around 480 bil
of capital investment in the past twenty years and are now essentially valued as
worthless.  I wonder what the over/under will be in Vegas (at one of Kerkorian’s
casinos) on how long it will take them to blow however much cash is thrown at
them?  My guess is six months.  Then they can blame the government and apply again.
It’s great to be big and bad.

typos

*which makes
*is nonsensical
*but every nation

Mr. Buchanan,

I do not believe the charges of the late Mr. Buckley that you are some kind of a racist or antisemite. And yet, you do seem to connect economic reality to national (or racial) identity, in a way that makes little sense to me. What does the geographical or national origin of Honda or Toyota matter? It is in the interest of these companies to hire as many (worthy) people as they can from rotten American car companies. Life will go on. Americans will still have (damn reliable foreign) cars. You really seem to think that the American government, or perhaps “the people”, own American companies in some broad, sentimental way. You subordinate economic and social justice (with respect to privately owned businesses and the laws of economics which require that companies like GM shall die by the very regulatory weapons for which they lobby)to the American state. In other words, you treat America as a metaphysical absolute whose “interests” (as defined by nationalists) can somehow trump economic realities or pure brute questions of fact about the actual state of American business. Do you really believe you can make GM successful or competitive with a bailout? Let the market clear out the junk....and no I don’t feel the least bit sorry for any government official, union member or other ward of the state who loses his (illegitimate and inherently coercive)occupation.Union workers are crooks, by definition. So are CEOs who lobby for heavy auto-regulation to keep new competition out and than find themselves eaten by the monster they’ve created.

Daniel, DUDE, you are a numbskull. Go get your GED and try again, son.

jImBo.... “numbskull”.... quite witty.... hillbilly....

Maybe the free trade/free market ideologues can now do to the American auto industry what their ideology has done to the American steel industry:

http://www.worldsteel.org/?action=storypages&id=284

Jack Rich, thanks.  Follow the eyes follow the money is a good tip.

I support all these bail-outs, for the good of the economy (and not because, as one contributor argues, his poor unionized brother-in-law works for GM!). That said, it still stinks.  These firms did all this to themselves; it’s not the fault of Toyota, etc..  Labor unions demanded the world while Japanese firms were cutting costs.  GM was building SUVs while oil prices skyrocketed.  If these firms weren’t so important to the whole economy, the bailouts would be unjustified, since we are subsidizing ignorant cretins all round.  Best thing to do is to attach lots of conditions to these bail-outs (e.g., break the unions and fire the morons who ran these firms into the ground).

This Big 3 bailout concerns me.
First off, these auto companies aren’t American companies. GM and Ford are multinational companies that produce more cars outside the U.S. than within the country.
The reason they produce so many cars overseas or in Canada or Mexico is because it is cheaper than in the U.S. If they are bailed out and re-organized to face the realities of what, given current global economic conditions, will be a smaller market, where are they likely to cut jobs?
I can see a situation where U.S. taxpayers bail these multinationals out only to see domestic jobs disappear as companies retrench where operating costs are lower.
All these other countries will act to protect their manufacturing base. Canada is already talking bailouts if the U.S. does the same.
The Asian competition, in much better financial shape than the U.S., will act to protect their interests as well.

Breslin, maybe you could explain to the Japanese and Koreans now how their subsidies, tariffs and economic nationalism have all been horrible, horrible mistakes that have ruined and impoverished their countries. I’m sure they’d appreciate a good laugh.

Anti-Strauss,

Just for the record, I laid out why I favored a loan to the auto industry here:  http://www.takimag.com/blogs/article/whats_good_for_general_motors_is_still_good_for_america/

And here:  http://www.takimag.com/sniperstower/article/isnt_bankruptcy_the_answer/

I feel pretty good about my first column on this issue, since it was cited by Pat Buchanan and John Derbyshire, both writers I respect and admire.

I wrote about my family only to counter the claim that those favoring the loans to the auto industry were “selfish parasites.” My brother-in-law works for Ford, and he is not, and never has been, a member of the UAW.  My Dad did work for GM, as a mechanical engineer, and he, too, was never a UAW member.  Both my Dad and brother-in-law are engineers, a profession the Big Three has done much to advace over the years, and one that would be hit hard by the loss of the American auto industry, for many reasons.

I think we should take the bailout money and buy GM etc and give every American taxpayer an equity interest with voting rights in the companies in proportion to the taxes they paid last year. 

Think the management might be responsive to the needs of the country then?

The bailout of Detroit will be to Obama what Iraq has been to Bush:
- An endless sink hole of US treasure.
-A commitment to the downward trend of America’s standard of living.
To transfer wealth from the productive sector of the economy to the economically marginal sector of the economy is an exercise in futility.

GM, Ford and Chrysler have fed and housed millions of workers and their families over the better part of a hundred years.
Cash for Goldman Sachs and the other characters’ bonuses but no cash for the auto business, whose predicament is to a large degree caused by the ‘investment’ banks reckless greedy behaviour?

“i’ll bet YOU’VE received farrrr more benefits than you EVER could pay for....
- quite sure you deduct mortgage interest, no?
- take deductions for any little kiddies? “

Deductions aren’t “benefits”, you witless boob.  Try again.

@ R. Burch, You know zero about why the “Big 3” are in trouble.  It has NOTHING to do with investment banks. 

Give me one example.  I bet you can’t.

The reason the banks got $$’s was to try and increase liquidity, so there would be more credit available for consumers.  So maybe they’d buy more Gm products.

@ Da Man, Ignore Daniel.  His is a complete idiot.  You’d do better arguing with your dog.

Note his posts.  He can’t tell which keys are which

The only valid argument for a bailout is that the banking industry got its, so the big 3 are entitled to one as well.

This bailout culture will destroy America, whether it’s institutionalized bailouts to poor individuals via welfare, or crisis-driven bailouts to ‘indispensable’ corporations.

Mr. Piatak,

I’m pretty sure I don’t like the bailout idea, but what I find incredible in reading some who comment on these bailouts and such is the belief that consumption drives an economy.

Investment and research drive the economy in the long term, not credit!

There’s a far better argument for bailing out these unions than there is for the bank bailout… Though again, I’m pretty sure I don’t like either bailout.

Please consider posting a link on your site so that we can post your articles to Facebook.

The “Detroit Culture” is as stone-headed and stubborn as is the “Government Culture” found in DC and the State Capitals.

The Big Three are horribly managed--which is precisely why they have the UAW; you get the labor relations you deserve, no more, no less.

Bankruptcy is best; smart entrepreneurs will pick up the pieces (fast) and manage the firms for long-term profitability.  The UAW will not have grounds for organizing them again.

Yes, it will be disruptive.  But it should be.

Want a hint?  Read today’s story about the mode of transportation selected by the Beggar CEO’s as they came to and left Congress.

Hint:  G-5…

US spends ‘bout $650B-$700B A YEAR in *ahem* “defense spending.... Japan - ‘bout $50B.... hmmmm....

“deductions” aren’t benefits.... no?.... don’t think so, huh?.... keep tellin’ yourself that....

“To transfer wealth from the productive sector of the economy to the economically marginal sector of the economy is an exercise in futility.”

haigh,

ummmm.... exactly WHAT sector of this eCoNoMy IS “productive?”

Frank sed: “Investment and research drive the economy in the long term, not credit!”

No. High wages drive the economy! Nobody will invest in either a new business OR research, if nobody has any money to buy anything. What you get with low wages is the economy of Mexico, with the rich holding on to their money, and no middle class!

@ top - “The reason the banks got $$’s was to try and increase liquidity, so there would be more credit available for consumers.  So maybe they’d buy more Gm products.”

Really, is that the reason..gee, thanks for the insight...boy, there is a lot of liquidity out there - the banks are hoarding what was provided to them, which in turn, has not increased the supposed liquidity...c’mon...that’s the sky is falling, sugar coated reason for the banksters’ fleecing of the treasury…

I guess I don’t understand the logic of “free trade"…

Now the Steel worker or auto worker making $25/hour has his job outsourced to a Chinese worker making $5/day. The American worker gets another job making $15/hour and has to pay for his own retirement and health insurance. So he can’t buy as much as he used to buy when he made $25/hour, and the guy in China making $5/day can’t buy what he makes?

The only way the Chinese company paying $5/day can make any money is export to the US where wages are higher, and the American worker has to borrow out his home equity to pay for the cheaper foreign goods? So with his lower pay, and extra costs of retirement and health insurance, he has less disposable income, and can’t save. Only as long as he has cheap---government subsidized CREDIT--can he afford to buy anything at all.

But the credit drys up as the ponzi scheme of “international finance” falls apart, and foreign firms no longer are willing to subsidize cheap American credit? 

So where is the economic GROWTH? Where is the investment?

No, “lazy faire” economics is just plain stupid.

joe, don’t you know?.... most productive allocation of resources (ummmm.... cheap, cheap, cheap - for the uninitiated) is best.... just ask the economic marxists.... opppps libertarian foo.... ooooppppssss libertarian proponents, present - competitive global wage trumps all.... even if it’s to spite your own face - textbooks say so - must be true -standard of living be damned!

libertarian eCoNoMic *ahem* “thought” is one little scuddle away from mcsham’s proposal for us all to become ebayers - you know - just sell our old garage sale crap to each other....

I see that Myth Romney has just called for the Big Three to be reorganized in bankruptcy. I have to agree with him . It is an endless money pit unless the retirees and legacy costs are removed from their backs. Myth’s father George was right fifty years ago when he said that the GM and Ford as well as the UAW should have been broken up under anti trust. Then perhaps we would have had real competition from American companies instead of depending on foreigners to do the job.

As a matter of fact, GM, Ford and Chrysler (notably exceptional for having been ‘bailed out’, bought and regurgitated) have failed by their own devices.
Continuing to support them (I contend that tax breaks supporting the purchase of ‘Hummers’ is an obscene use of the power of government in furtherance of special interests at the expense of the people), exacerbates the problem and has no chance of a positive outcome (notable exception, those who will benefit directly from the largess).
It is pointless to postpone the bankruptcy proceedings. I think charity belongs to and exists in the hearts of men and women, but that they have no right to confiscate the product of honest work to grant property to failed businesses or friends. Charity is, by definition, voluntary.
The only reason that these conversations persist is that, as a generalization (for which I apologize in advance), the people of this country are incapable of thinking their way through through anything more complex than a lunch order at Burger King. This, I attribute to the reliance on TV as a source of information.
No offense Pat, but you are capable of better than this and so are we all.
As long as there is a hope, and I blame the opportunists as well as the outright corrupt and larcenous congress and senate for promulgating this false hope, for continued ‘bailouts’, there will be customers for it.
It is horrible, unethical and criminal to give 700B (more like 2-3T) to Wall Street hacks so they can fly off in their private jets to golf vacations after wrecking the retirement funds of millions of honest men. That should be stopped. Continuing to do the wrong thing will not have a good end. It just postpones further and aggravates the conditions which ultimately lead to disaster.
We have not yet faced the disaster. But we will eventually have to deal with the worthless FRNs that the three stooges of the apocalypse (Bernanke, Paulson, Bush - email me for a proper attribution)are generating now.
Don’t presume from my tone that I am safe from this disaster. The people who employ me are likely to suffer a 30% - 40% reduction in orders if GM goes out of business. That is not a good sign for me.
Maybe it’s too late to salvage anything from this wreck of a country. My pride won’t allow me to make that a premise and I think you all give up too easily.
I suggest that we begin operating as individuals, without the sanction of government and take responsibility for ourselves.
It should be obvious to the most casual observer that the US is history.
I do empathise with the ‘auto workers’ (the manufacturers, testers, engineers, administrators etc. who work for the enterprise). A few years ago, just as we (telecomm, computer, sw, hw, web etc.) engineers had become accustomed to high wages, plentiful jobs and ‘the good life’, some jerks in Washington decided that importing engineers from other countries would be good for us. There are thousands of ‘us’ who gave up looking for these jobs now, and thousands of Canadian, Indian, Chinese, Pakistani, Mexican and other immigrants (many whom I know and some whom I consider friends) who came here as a result. (NAFTA etc.)
I don’t hate them, just because they put some of my friends out of work. But they should not believe the crap that they were told about the US not having ‘enough’ skilled engineers to do the jobs.
Quality has not improved as a result.
Are we all in this together? Or are we each competing for a place at the trough?
I won’t eat that slop.

Wouldn’t it be a nice if there could be some kind of direct and informative discussion on this issue in Congress and that Government Printing Office known as our media, offering a cost benefit analysis of the Bail-out, No Bail-out continuum so that political ideology could be kept out of this discussion. Tying a decision on this momentous issue to whether or not a bail-out will ruin the GOP is the last thing we should be concerned about because the GOP is , like the auto-makers themselves, flat busted broke.

But then, this assumes Congress is interested in either cause and effect or fiscal prudence.

Mr Piatak:
I sympathize with the plight of your brother-in-law, and with anybody who is about to lose their work.  BUT:  how can paleocons support these bail-outs while opposing programs to help the poor and minorities all these years?  Preferential treatment is always hard to justify, no matter how deserving the receivers.  Buchanan et al used to decry affirmative action and welfare; how the hell is that any different from bailing out dying firms?  Oh, there’s one difference; the cost will be much higher in the case of bail-outs.

anti-strauss.... i highly doubt you “sympathize”.... difference being - American beggars don’t have to “compete” with a global lowest common denominator - they don’t have chinese, indian, mexican sloths aside them - though, i do believe libertarians would approve of such imports -would no doubt kepp the “market” “competitive, no?....

Daniel:  are you aware that unionized workers in the Big 3 earn between $45 and $73 bucks an hour, plus overtime, plus medical benefits??  And then they wonder why 3rd world firms are doing better?  The Japanese are doing ok because their unions don’t ask for the world.  The Big 3 screwed themselves.

Let Detroit Go Bankrupt
By MITT ROMNEY in New Yor Times:
http://www.nytimes.com/2008/11/19/opinion/19romney.html?hp
I do not count myself more clever or more devoted to conservative cause, than I count Patrcick Buchanan of than Mitt Romney.
Still they have opposite opinions (see above)

Matthew McCannan said :"Breslin, maybe you could explain to the Japanese and Koreans now how their subsidies, tariffs and economic nationalism have all been horrible, horrible mistakes that have ruined and impoverished their countries. I’m sure they’d appreciate a good laugh.”

Matthew,

While I am no expert on the Asian car market, none of the policies above can ever benefit the economy. Such policies interfere with the workings of the market and are designed to artificially prop up politically well connected firms. Economics is, as Bastiat said, all about “the seen and unseen”. You can get away with doing those things for a while, but there is a price to pay. Each subsidy is an act of theft and each arbitrary privilege, an act of fraud. You need to read those “19th century scribblers” in order to grasp the PRINCIPLES which are abstract and cannot be seen, but which are in a sense more real than so many million dollar houses built on inflated credit. As for economic nationalism, I condemned the philosophical position that businesses are like regional sports teams and that there was anything rational about favoring a company just because it happens to be associated with one’s own country. A nation does not in any sense “own” the companies that are within it. Nor is there any causal relationship between feelings of national pride and the actual economic state of affairs in one’s country.

Economic laws do not bow to intellectual constructs such as “nation”. It is just as absurd to give welfare to car companies “for the sake of American business” as it is to give welfare the poor “for the sake of humanity”. The only just and practical way to deal with both is voluntary action, which means business and charity. Buchanan’s article above really demonstrates the truth that “there isn’t a dimes worth of difference between the two parties.” ‘Conservatism’ and ‘Progressivism’ are but two sides of the same statist collectivist coin.

And back to Japanese and Koreans: What ever mercantilist practices that they (like GM) engage in, the Asians evidently still know how to build cars that people want to buy. Unfortunately GM does not, and that should be the end of it.

Anti.... your thesis that the asians are playin’ by the same rules - *laughable*....

libertarianism’s a sickness… They simply cannot escape the notion that there is no higher good beyond low prices and cheap labor. If enlightened individuals decide we should cannibalize the American economy for the benefit of china, japan, korea, india and walmart shoppers - so be it....
and libertarians are complete dullards on the asians.... they think enterprise is the same thing as capitalism and “freedom,” even if the state is totalitarian (china & korea).... in fact, they fail to see that even japan is an old-school mercantilist nation-state, of the sort that they are supposed to loathe....

libertarian eCoNoMiC “theory” has done more harm to Western man than any hard core cultural marxist EVER could

@top

The big 3 and most other businesses in the US and around the world are in big big trouble because we are having a complete financial collapse. We are having a complete financial collapse, first because of the derivative market, which essentially is like taking fees for insurance even though you are unfunded. If you are a counterparty to a derivative, and cannot honor the contract the buyer of the contract is kaput, he has no insurance for his loss. Why does he have a loss? See next.
By creating SIVs and every other acronym involving bundling of ‘investments’ such as junk bonds as well as dodgy mortgages and God knows what else that is now considered to be worthless, most of which were ‘insured’ (see above), assets of billions or trillions of dollars are now considered worthless.
This was the investment bank ‘business’, and the collapse of it has destroyed trillions in wealth and savings. And that translates into diminished consumer demand, in the auto business and most any other consumer goods business.
And by the way, banks are not using their new found liquidity to make consumer loans - they’re using big hunks of it to pay BONUSES (presumably for doing such a good job of destroying the world finacial system) and holding on to the rest. As one example, Goldman Sachs alone is giving out 11 Billion in bonuses; they received at least 10 Billion from the bailout money.

@ MJK.  I agree.  However, that was government’s goal. It didn’t work....surprising isn’t it?  The government couldn’t could get “lucky” in a bordello.

That emphazies my point.  Do you want government giving money to an industry as inefficient as the Big 3?  They have been greedy and short sighted for decades. 

Now their chickens are coming home to roost.

@ R. Burch, Firstly, your comments are inaccurate.  GM and the rest were in trouble before the meltdown.  The oil rpice insrease go them.

They tried to maximize short term profits by making bigger and bigger vehicles (Their profits margins were bigger).  When the price of oil went up their sales went down.

Gee, why was that?

Toyota and Honda, on the other hand, gained market share.  Why?  Because they had fuel efficient vehicles.  Sure they had gas guzzelrs too, but they had a broader variety of cars, which let them get through the increase in gas prices with far less turmoil.

Your Goldman statement is flat out false.

Regardless, why should the taxpayer bailout morons?  So they can continue being morons?

@ R. Burch, Damn, I hate this midget screen.  Instead, “The oil price increase got them.”

I should work for GM, I guess.

@ Daniel.  Seriously dude.  You are an idiot.

Libertarians believe that government is the problem, not the solution.  The means keeping government out of business, and people’s personal lives.  You, above everyone, should appreciate that!

Starve the beast

Post way.  With all kinds of ellipses, CaPitalS and inane commas

Goldman bonuses are flat-out true. And it’s not just Goldman. Even the companies that went broke handed out bonuses.

http://www.dailymail.co.uk/news/worldnews/article-1081624/Goldman-Sachs-ready-hand-7BILLION-salary-bonus-package--6bn-bail-out.html

As regards the production of big or small cars, most companies work to forecasts and can’t turn on a dime like the consumer can when confronted with sudden increases in gasoline prices.
The last time gas went cheap, everybody wanted big cars - makers couldn’t keep up with the demand.
Anyway, many members of the public have 100% hindsight and little understanding of how things happen.

Once again PJB sees through the fog and gets it right.  When the big three go under (and they will in absence of taxpayer money), all those former employees will end up on the dole.  I’d rather pay them for doing inefficient work than pay them for doing nothing at all.  In this crazy system we have, the only way to look at it is as an investment.  What we put in and what we get back.  A bail-out will net more (tax money received - tax money paid) than the straight outflow that will hit as workers head from the assembly line to the unemployment line.

@ R Burch,

http://www.news.com.au/business/money/story/0,25479,24664120-462,00.html

Quote from J Breslin: “While I am no expert on the Asian car market, none of the policies above can ever benefit the economy.”

Despite the fact that one can physically see that every country that developed used these policies net physical out increased with protection whereras periods without protection always resulted in a net reduction in physical output.

Quote from J Breslin: “You need to read those “19th century scribblers” in order to grasp the PRINCIPLES which are abstract and cannot be seen, but which are in a sense more real than so many million dollar houses built on inflated credit.”

Science Mr. Breslin, doesn’t begin with abstractions that can’t be observed but with the observation of the physical phenomena and I reject all so-called “economics principles” which cannot be observed to physical effect because the “queen of sciences” according the cameralism is a physical science thus in the American School tradition which the legacy of the the Italian Golden Renaissance and Cameralism. Your abstract “science” is the legacy of the House of Bardi, of Usury, Merchants of Venice, and the Black Pague.

The burden of proof is on you to show that “free trade” increase net physical output not ours. It is your claim and as a scientist you must present physical evidence to this fact and you can’t and you and your 19th century British Imperialist Economists were and are still nothing but mere scribblers.

I’ve studied classical political economy and reject the British Imperialist school of “Free Trade” and I suggest you the rebuttals to the British by the American School. 

Quote: “Economic laws do not bow to intellectual constructs such as “nation”.

And this the heart of the problem. A nation is NOT AN INTELLECTUAL CONSTRUCT but the organic existence of the a real, tangible, flesh and blood people. This the LIE of LIBERALISM i.e. nations do not exist. 

The “ECONOMY” or “the MARKET” are intellectual constructs and no law of these made-up constructs can deny the physical reality that the people of America are not the same as the people of Japan, Italy, or Mexico etc...etc…

Geography, Language, History, Culture and Genetics matter. They are real and the so-called “laws of economics” simply do not matter unless they deal with the fact of that human society exist within the category of nations and NO universal republic or kingdom exists nor can it. 

Because people exist within nations of different characteristics economic policy must be suited for the characteristics of that people and therefore the purpose of the nation-state is to defend those interests through protection and allow for the development of its people without being forced to act according the interest of another people against its own.

Nation-states must therefore be sovereign and independent. To deny of such sovereignty is an assertion that individuals, cartels, corporations, cabals, or other powers have the right to force a people to accept actions against their interests.

This is the definition of IMPERIALISM thus a claim to a “RIGHT TO FREE TRADE” is the claim of a “RIGHT TO IMPERIAL DOMINATION.”

LIBERALISM IS IMPERIALISM and there can be no peace with it. I TAKE MY STAND.

P.S. I oppose bailouts because they won’t work and want re-organization into worker co-cps withing easy financing for re-tooling to BUILD MASS TRANSIT NOT DINKY GREEN CARS because we have already lost that market to Asia and we ain’t getting it back.

Sept,

Despite the fact that one can physically see that every country that developed used these policies net physical out increased with protection whereras periods without protection always resulted in a net reduction in physical output.

Except Japan and the UK in the 19th century right? Because both these nations had free trade in the 19th century.

There are more regulations on the books today that ever before, and you guys are blaming libertarianism for America’s ills. Remarkable.

Where was libertarianism when Dr. Douglas Jackson, owner of e-gold.com, was indicted on charges of “conspiracy to engage in money laundering”, after a 4 year long investigation by the FBI, the IRS and the Secret Service?

His sentencing is today. He faces 25 years in prison. Why? He operated an “unauthorized money transmitting business”.

Where was libertarianism when the Liberty dollar mint was raided by the Secret Service and FBI last year and millions of dollars worth of silver, gold and platinum were confiscated?

Thank you, Amin, for demonstrating a prime characteristic of utopian nonsense: the claim that the pet abstraction can never be judged until universally applied.

I like and tend to agree with you on a lot of things, Pat, but you’re completely wrong on this one.  The whole Chapter 11 bankruptcy process is designed to filter out bad investments from the good, which is precisely the medicine Detroit needs.  Chapter 11 does not mean the end of the Big Three, as everyone seems to be shrieking about.  It means their rebirth.  Handing them money (that we don’t have) only buys them a very little time, and effectively rewards their bad decisions.  I’m hurting financially as well - why should I have money stolen from me to give it to someone else?  That’s exactly the type of government you’ve (rightly) been railing against for years.

An added benefit of Chapter 11 is they might be able to rid themselves of the UAW boat anchor hanging around their neck, ensuring absolutely they aren’t competetive.

@top

The link you provided is corporate politics - half a dozen top guys don’t take a bonus after taking loads last year for the disastrous year before.

What about the other 10.9 billion?

Read, learn, think and come back (much) later.

The American auto companies are struggling with less demand for an inferior product. And even though import tariffs can be justified, there is no excuse for perpetuating a poor product, even to ensure retirement packages.

Keep retirement separate and state-guaranteed--that’s where all this bailout money can be more directly useful.

Or the state can guarantee the other 95% of jobs in the country as well.

A loan, if based on a reasonable expectation of making the money back is one thing, but a giveaway is another.

Ed,

I’d like at least a demonstration of some sort of trend towards libertarianism correlating with a decline in American vigor before condemning libertarianism.

Yes, there were tariffs in the 19th century. But there was also no income tax. There were no federal laws forcing employees to provide health insurance for employee. There was no Social Security tax. There was no medicare tax. There was no federal minimum wage. There were no OSHA regulations. There were little to no banking regulations. People didn’t face 25 year prison terms for operating an “unauthorized money transmitting business”.

@ R Burch, You should read your own posts.  The article you cite indicates that Goldman set aside 7 billion pounds for SALARIES and bonuses for 2008.  That’s not $11 billion in bonuses.

Also, the 443 partners are slated to receive, on average, a 3m pound bonus.  That equals about 1.3b pounds total.  You are off by a factor of five.  Further, the Goldman bonuses are less than prior years (2006-$16b).
The balance goes to other employees.

FYI, Bonuses are the main form of compensation for partners @ Goldman. That’s not to say the bonuses are reasonable.  But Goldman can take it up with its shareholders.

Your personal attack is unwarranted.  I’m not the one who is lying/exaggerating.  Now go sit in the corner wearing a pointy hat.

The orginal Jack repeated this unoriginal assertion <example of non-thinking>:  see that Myth Romney has just called for the Big Three to be reorganized in bankruptcy. I have to agree with him . It is an endless money pit unless the retirees and legacy costs are removed from their backs.

Bankruptcy is being argued by the pimps for the CEO/Wall Street Bankers types as a way to dump the “legacy” costs on to the government, just like they did with the Airlines and the steel industry.

Another way, the white working class is getting screwed so that those who have the most, can profit a little more from the destruction of the American Dream.

Anti-Strass (or maybe it’s anti-American) sez: are you aware that unionized workers in the Big 3 earn between $45 and $73 bucks an hour, plus overtime, plus medical benefits??  And then they wonder why 3rd world firms are doing better?  The Japanese are doing ok because their unions don’t ask for the world.  The Big 3 screwed themselves.

First of all, that dollar amount includes some legacy overhead costs....the Japanese worker doesn’t have to compete with immigrants coming there to take his job at less pay...and you might want to eat your words, since Japan is a protectionist economy as well--US imports have all sorts of restrictions to get in.

And if you didn’t notice, Japan has “socialized medicine”...their workers don’t need health insurance---a major reason that foreign companies are more “competitive” then US companies.

Go on, “Libertarian”...keep spouting your nonsense, and keep proving that YOU and YOURS are either dumbies, or merely disingenuous pimps for the CEO classes, Trust Fund babies, and WAll Street sharks.

JoePopulist, your argument doesn’t make any sense. Your argument for socialistic and unconstitutional federal health care coverage in particular is ridiculous.

You say “And if you didn’t notice, Japan has “socialized medicine”...their workers don’t need health insurance---a major reason that foreign companies are more “competitive” then US companies.”

Wait a second! We’re not saying companies should be forced to provide health care for employees. Those who support the Constitution are saying the federal government should totally get out of health care. This means Detroit would no longer need to pay for its employees’ health care. This would make it just as competitive as Japanese automakers in this regard.

“the Japanese worker doesn’t have to compete with immigrants coming there to take his job at less pay..”

What does this have to do with anti-strauss’ argument that the unions have pushed wages too high in the Big Three? What do immigrants have to do with American automakers being paid made more than their competitors? You’re actually contradicting your own argument, as more labor competition due to immigration would reduce wages in the American auto industry, not increase them.

More of your pro-socialistic, anti-freedom vitriol. You think you’ll solve America’s problems like this, but all you’ll do is give intellectual cover for those who want to increase the size of government and in the process turn Washington D.C. into an even more pork-trough for the special interests to gorge on.

There are too many flaws in your argument to even begin to debate. Let me just say that you’re a foolish socialist/fascist who should just leave this country.

Joe Populist is a moron who looks to scapegoats in other lands.  Stop defending the under-skilled and overpaid unions.  Do you know anybody else who makes 70 bucks an hour for jobs that robots can do?  Why is it American to be stupid and suicidal??

Sigh...this is the end of the paleocon/paleolib alliance.  We are tearing each other apart. I often wondered what Ron Paul had in common with Pat Buchanan, except a dislike for neocons.  If we can’t agree on the Big 3, then the unity among us is as dead as the dodo.