Re: Bad business model, poor decision-makingbonnevivantDecember 17 2008, 23:56:04 UTC
No one asks the taxpayers how government money is spent. Our input is only indirect; the elected officials from our state and other elected bodies are supposed to represent the needs and views of their constituencies.
If the banks hadn't been bailed-out, a catastrophic breakdown in the banking industry would've occurred. It was necessary. From what I understand, the financial sector was not bailed-out for the bankers and investors. If the banking system collapsed, we would've seen a far worse worldwide decline. When the banks can't or won't lend money, they economy can screech to a grinding halt.
People have a long history of being shafted by banks, but corporations and institutions have always given the taxpayer, the citizen, the shaft. The mortgage crisis that precipitated this had many causes, not least the utter failure of those rating the mortgage-backed securities (S&P, Moodys) as well as profoundly unethical predatory lending. In retrospect, it has become clear that the government relied on these private ratings agencies to do the necessary work of oversight and regulation for them.
Assigning blame is important, but it doesn't change the fact that the government had to step in and prevent the banking system from experiencing a chain of collapses that may well have led to the total break-down of significant numbers of both national and international banks. It might not have decimated them, but who would want to tempt fate to find out?
No one is buying cars, be they Toyota or Ford, so it's no surprise that most, if not all, car manufacturers are posting losses. However, the foreign makers have finances that are managed far better. After all, they aren't seeking a bail-out to remain solvent. The big three need help, with GM in the most trouble of the three. I'd say it's controversial to assert that Ford is doing the best of the other automotive companies. One could make a better cases for Subaru. In fact, just today, it was named the automotive marketer of the year http://www.marketwatch.com/news/story/Mediapostcom-Names-Subaru-America-Automotive/story.aspx?guid={DE5478AD-FBEC-44EB-88AD-27DD82F3B4B1} Now that's just one element of a very complex business, but consider this quote from the Wall Street Journal: "...as Investors Business Daily notes, Toyota made a profit of $1,874 per car, while GM lost $4,055 per car, or $38.7 billion, and almost all of those loses were due to its U.S. operations."http://online.wsj.com/article/SB122946400586011729.html
If culpability is sought for the failure of the auto bailout, it belongs squarely on the shoulders of the Republican senators. The article I posted a link to is Pat Buchanan's argument to that effect. The bill passed the House, was completely supported by President Bush, but was shot-down in the senate: 40 Democrats, 10 Republicans, and both Independents voted yes. 4 Democrats and 31 Republicans voted no.
The auto makers will get their money. I have no doubts. But they need to drastically reassess their operations.
If the banks hadn't been bailed-out, a catastrophic breakdown in the banking industry would've occurred. It was necessary. From what I understand, the financial sector was not bailed-out for the bankers and investors. If the banking system collapsed, we would've seen a far worse worldwide decline. When the banks can't or won't lend money, they economy can screech to a grinding halt.
People have a long history of being shafted by banks, but corporations and institutions have always given the taxpayer, the citizen, the shaft. The mortgage crisis that precipitated this had many causes, not least the utter failure of those rating the mortgage-backed securities (S&P, Moodys) as well as profoundly unethical predatory lending. In retrospect, it has become clear that the government relied on these private ratings agencies to do the necessary work of oversight and regulation for them.
Assigning blame is important, but it doesn't change the fact that the government had to step in and prevent the banking system from experiencing a chain of collapses that may well have led to the total break-down of significant numbers of both national and international banks. It might not have decimated them, but who would want to tempt fate to find out?
No one is buying cars, be they Toyota or Ford, so it's no surprise that most, if not all, car manufacturers are posting losses. However, the foreign makers have finances that are managed far better. After all, they aren't seeking a bail-out to remain solvent. The big three need help, with GM in the most trouble of the three. I'd say it's controversial to assert that Ford is doing the best of the other automotive companies. One could make a better cases for Subaru. In fact, just today, it was named the automotive marketer of the year http://www.marketwatch.com/news/story/Mediapostcom-Names-Subaru-America-Automotive/story.aspx?guid={DE5478AD-FBEC-44EB-88AD-27DD82F3B4B1} Now that's just one element of a very complex business, but consider this quote from the Wall Street Journal: "...as Investors Business Daily notes, Toyota made a profit of $1,874 per car, while GM lost $4,055 per car, or $38.7 billion, and almost all of those loses were due to its U.S. operations."http://online.wsj.com/article/SB122946400586011729.html
If culpability is sought for the failure of the auto bailout, it belongs squarely on the shoulders of the Republican senators. The article I posted a link to is Pat Buchanan's argument to that effect. The bill passed the House, was completely supported by President Bush, but was shot-down in the senate: 40 Democrats, 10 Republicans, and both Independents voted yes. 4 Democrats and 31 Republicans voted no.
The auto makers will get their money. I have no doubts. But they need to drastically reassess their operations.
Reply
"The last quarter's results: Toyota makes $4 billion in profits while Ford racked up $9 billion in losses."
http://www.autonews.com/article/20081217/ANA02/812171571/1137
Reply
Leave a comment