I think I’ve got the bailout blues… All that money out there and me, with no way to get my grubby mitts on it. Ah, such is life. Fortunately, I’m not chomping at the bit for relief like some are…
Ok, so another bailout.. Sort of. From what I understand, this one is a loan as opposed to the bailout which was more of an investment… A bad investment, but an investment nonetheless.. At least, that’s what it was supposed to be…
Anyway, the big three, General Motors, Ford, and Chrysler, are in bad shape. Or, rather, they purport to be in bad shape. Being private companies, I’m not sure whether they are or not since I can’t see their books. They claim that the bad economy is affecting auto sales, resulting in reduced revenue, cutbacks, etc. Umm.. no shit. No, really.. These things happen in a bad economy. Of course, if I understand right, the auto makers have been declining for a while now anyway. They seem to have dug themselves a nice big hole they can’t seem to get out of. Good job guys.
And how the hell do you dig a hole this big when the government bends over backwards to help.. They already have $25 billion dollars in re-tooling loans. Loans that are intended to help the auto makers modernize their systems and enable them to develop and deliver alternative fuel vehicles. A wonderful thought, but I don’t really see auto makers moving towards alternative fuels.. They’ve been in the oil industries pocket for so long, how will they ever survive.
But now, the auto makers are suffering even more. So, after seeing the banks get bailed out, they come flying in, on private corporate jets, and start begging for money. If the banks got it, the auto makers should, right? Hell, who’s next? I know.. Let’s bail out some software companies. I hear SCO isn’t doing so well these days…
Look, the economy sucks ass right now. My 401K is in the shitter, as are most everyone else’s… I’m no economist, so I can’t really tell you what will make the economy better. I know that if people get out there and spend, things can, potentially, improve. The problem is that we’re in a downward spiral. The media and the government are crying and whining about a bad economy, spreading FUD. People get scared and start to save their money instead of spending it like they normally would. This takes money out of the economy and thus more FUD is spread about the bad economy. Wash, rinse, repeat. On and on it goes, until everything starts to collapse.
Once the collapse starts, people start losing jobs and companies start to close. So, the money that they were saving becomes a lifeline, and doesn’t make it back to the market. Eventually, these people begin having problems paying bills, utilities are shut off, loans are defaulted, etc. And down we go.
So, what do we do. How the hell do we break this cycle? Honestly, I have no idea.. There are smarter people than I working on that one. But, unfortunately, I don’t think letting the auto makers crash and burn will help. If the economy weren’t this bad, I would have no problem seeing them crash, burn, and go the way of the Dodo, but given the current climate, I think something has to be done.
So, we look at bailing them out. So far it looks like Congress is handling this better than the bank fiasco. They’re asking for a plan for the money before they hand it over. Perhaps they’ll even avoid making the same mistakes they made with the banks. Unfortunately, I’m not sure there’s any way to prevent the auto makers from abusing the money they get, but perhaps there is hope. At the very least, they should be required to cut back on the perks, drop any executive bailouts, and even limit executive pay. The only thing we can do at this point is wait and see. The future is bleak, but hopefully the light at the end of the tunnel appears soon…