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| Good Ol' UAW, Realistic As Always | |
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| Tweet Topic Started: Nov 17 2008, 04:30 AM (322 Views) | |
| QuirtEvans | Nov 17 2008, 04:30 AM Post #1 |
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I Owe It All To John D'Oh
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http://www.ft.com/cms/s/0/c9e117b6-b416-11dd-8e35-0000779fd18c.html?nclick_check=1 They're on a sinking ship, and instead of helping to patch it, they're yelling for someone to bring them a new boat. Nice work, guys. |
| It would be unwise to underestimate what large groups of ill-informed people acting together can achieve. -- John D'Oh, January 14, 2010. | |
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| Piano*Dad | Nov 17 2008, 05:54 AM Post #2 |
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Bull-Carp
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I suspect if the Congress refuses to go along with directly pumping money into the domestic auto industry that the union leadership may become more flexible. There is a set of industries in the US (steel is also one of them) that has a long history of using the government as a club to extract better terms. Sometimes the club is wielded against foreigners (tariffs) and sometimes just against the taxpayer (subsidies, loan guarantees etc.). One of the advantages of bringing unions directly into the board meeting is that they see the real books. It becomes harder for a union leadership to play games if they are part of the process, and it becomes less likely that either side will make a mistake due to having bad information about the financial fundamentals of the firms that are involved. |
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| JBryan | Nov 17 2008, 05:59 AM Post #3 |
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I am the grey one
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Bailing out the Big Three would be a mistake and this is only one of the reasons why. |
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"Any man who would make an X rated movie should be forced to take his daughter to see it". - John Wayne There is a line we cross when we go from "I will believe it when I see it" to "I will see it when I believe it". Henry II: I marvel at you after all these years. Still like a democratic drawbridge: going down for everybody. Eleanor: At my age there's not much traffic anymore. From The Lion in Winter. | |
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| Mikhailoh | Nov 17 2008, 06:23 AM Post #4 |
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If you want trouble, find yourself a redhead
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It begs the fundamental question of exactly how do we bail ourselves out? EVERYBODY is lining up right now with their hand out - even credit card companies who want to be paid off on uncollectables. For the bailout concept to have any success at al there needs to be a lot more bailers than bailed. |
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Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball | |
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| Piano*Dad | Nov 17 2008, 06:56 AM Post #5 |
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Bull-Carp
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The banking system is a public good. An automobile company is not. Neither is the automobile industry. Governments may choose to offer assistance to any private interest they wish to, but saying that by doing so they are serving the public interest is usually very silly. Doling out government largesse based on lobbying strength is unlikely to produce as rapidly growing an economy as possible in part because that largesse must come from taxes that themselves cause people to make uneconomic decisions about the resources they have (including their own labor). A company that goes bankrupt has capital that other firms can buy. It releases labor that other firms can hire. The process is not instantaneous and people can suffer a loss of income or assets. I couldn't care less about the asset holders (of which I'm one) because asset holders can diversify to minimize the damage. I care more about wage earners. But the appropriate policies on efficiency grounds are ones that send signals to workers and to firms to use their resources to best advantage. Encouraging firms and/or industries that are not internationally competitive to continue hiring people and producing goods is a waste. |
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| OperaTenor | Nov 17 2008, 07:48 AM Post #6 |
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Pisa-Carp
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The kind of "reasoning" the UAW is engaged in will only make the coming economic paradigm shift that much more difficult. Everyone will need to adjust their lifestyles and business practices. |
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| Axtremus | Nov 17 2008, 12:21 PM Post #7 |
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HOLY CARP!!!
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What's your view on the steel and farming/agriculture industries? I think one can argue that they are vital functions that the nation can never (completely) outsource. Do you see them as "public good" or "just another industry"? |
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| Axtremus | Nov 17 2008, 12:22 PM Post #8 |
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HOLY CARP!!!
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(double post - deleted) |
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| Piano*Dad | Nov 17 2008, 01:51 PM Post #9 |
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Bull-Carp
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Steel and farming are not 'public goods' by any economic definition of the term. I think what people often mean when they use the term in connection with any particular industry is that the industry is somehow more important than other industries. The notion of agriculture as a foundation is actually (I believe) an old Marxist notion that somehow got co-opted by other isms as well. The idea was that agricultural surplus led to the development of a class that had leisure and which could therefore do other things (like make swords, or even art) once basic necessity was fulfilled. This is nonsense both intellectually and historically. Human activities are interdependent and developed together. This is not what you were asking about, of course. Indeed agriculture and steel are just industries, and many countries do just fine without them. New Zealand seems none the poorer for not having a steel industry and Singapore relies rather heavily on trade to feed itself. Ranking industries by importance often is just another way to give powerful special interests control over resources. One can make a 'national security' argument for many things, and food / steel are often among the supposedly vital things. Here the issue isn't any public good function, but just plain old risk. War can cause interruptions in trade and you may face shortages of something you would need to prosecute the struggle. This is a hoary old chestnut that again is easily exploited by everything from textile makers (troops have to uniforms, right?) to shoemakers (gotta have army boots, right?). In any case, if risk is the issue and you have an incorruptible economic supreme court that would make ONLY the right decisions (hah!), the policies you would choose would be an interesting mix depending on the specific nature of each industry (and the risk that is faced). It's not simple. Consider a simple extractive industry like oil. What should we do to reduce the risk of having oil cut off in a conflict? Well, we could subsidize domestic production, right? Hmmmm, that's the 'drain America first' policy which may lower current dependence while worsening future dependence. We could put import tariffs in place to shrink imports (dependence). That's not a bad idea, because it would likely lower the world price a bit while also encouraging us to shift from oil perhaps to less polluting fuels (oh wait, that might be dirty coal. Oh damn). And it would also drain America first. Sheesh, we've been here. Well, what about subsidizing discovery of new deposits. Ah, drill baby drill! Environmental issues? OK, what about a strategic petroleum reserve (could do it with steel too, it doesn't rot). Hey, maybe an idea that works. There's a big carrying cost but if there's a national risk to be avoided that carrying cost is an explicit measure of what we have to pay to insulate ourselves from the risk. But who determines when to build up the stockpile, buy from whom at what price, and set the appropriate size for the stockpile. Yes, that incorruptible economic supreme court. Right! |
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| QuirtEvans | Nov 17 2008, 02:26 PM Post #10 |
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I Owe It All To John D'Oh
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While I generally agree, I'd have to point out that New Zealand and Singapore are hardly world powers. If they were invaded, they'd have to rely on friends ... friends who have steel mills and armies ... to defend them. |
| It would be unwise to underestimate what large groups of ill-informed people acting together can achieve. -- John D'Oh, January 14, 2010. | |
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| ivorythumper | Nov 17 2008, 02:41 PM Post #11 |
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I am so adjective that I verb nouns!
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By Jingo, you're right! We don't want to fight but by Jingo if we do We've got the ships, we've got the men, we've got the money too |
| The dogma lives loudly within me. | |
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