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Bailing out the auto industry and SUV owners

Discussions about the economic and financial ramifications of PEAK OIL

Re: Bailing out the auto industry and SUV owners

Postby Ibon » Fri 08 Aug 2008, 17:35:11

$this->bbcode_second_pass_quote('Twilight', 'T')he rest is political "if only there could be understanding" which is cheap

Well I know Yarbo will read me coming to his defense and being my friend certainly makes me biased but I rather like how his solution is directed toward engaging the common man into raising awareness of fuel efficiency, conservation and belief in a government that can mitigate in a positive way. All to often on these forums we disregard the common man as "sheeple" which is also rather cheap so the part which you call political is exactly the part I found to be the most interesting.

We do have to engage this 300 pound gorilla we derogatorily call "the sheeple" now don't we?
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Re: Bailing out the auto industry and SUV owners

Postby Twilight » Fri 08 Aug 2008, 18:51:34

$this->bbcode_second_pass_quote('Ibon', 'W')e do have to engage this 300 pound gorilla we derogatorily call "the sheeple" now don't we?

Of course, though I never use that juvenile term. The energy complex side of me would like nothing better than to dictate terms to people too stubborn to take constructive action themselves. But the private citizen in me engages them to tell them to engage themselves. Here is why.

When one must change, there are different sources of change and they come with a hierarchy of pain:
1) The easiest change is what you do yourself. You are the expert in your business. Nobody else has the potential to walk in and do better, because to most planners you are part of a unit of a thousand or a million. If you take personal ownership of what you have to do, you can adapt ahead of time in a more optimal way, with less stress and at lower cost. For example, structuring your life so you can go car-free, then taking that plunge.

2) Harder change is forced upon you by the market. This is when you waited too long to do (1) and lose a load of money to higher prices and ultimately are priced out of goods and services. This often happens at an inopportune moment and before you have had time to adapt or substitute. For example, finding your job is not covering your fuel needs for commuting to it after food and accommodation costs are accounted for, causing the difference to go on a credit card that will eventually bankrupt you. Also NE America's ongoing "Oh s*** I can't afford the heating bill because I didn't pay attention to the news" moment. This results in stressful costly adaptation in real time or even behind the curve.

3) Even harder change is forced upon you by the government. This is when you waited too long to do (1), (2) has already happened causing you to lose your ass, and your last resort is to vote for a living. This is where proposals such as described fit in - when nothing useful got done, and the obvious solution is to ask a higher power to take resources from a group which has them and distribute them among a group to which you belong, with a loss rate that in this particular case could end up being 50%.

4) Foreigners lose patience and yank support for something you didn't realise you needed.

Those of us who lurk or read some hobby board are familiar with mainstream thinking on energy and cost of living issues lately - there is usually a thread in an off-topic forum. Most of us will agree with the observation that (1) does not enter into anyone's mind, (2) is strongly resented but treated with fatalism or despair, and most conversation defaults to (3). Now I am going to be uncharitable and suggest that that is probably because the first two demand creative input while daydreaming government solutions demand little more than a shopping list of wants with a deus ex machina in there to make it work.

And this is what I hear more and more as the effects of resource (and credit) limits ripple out and touch more people. They decide that the future will still see them driving every day, flying to a family dinner at least once if not several times a year, and heating the street through French windows. Then they wish that it happen disproportionately at someone else's expense because of course they are victims and need a helping hand. No, I have seen how people live in other countries, and they need nothing of the sort.

I view a government-administered swap of old cars for new as resistance to change, a failure of imagination, and the surest possible way to have the taxpayer defrauded. I am not buying it, and I am not buying the thinking that produced it. There was a time when I too defaulted to wishing for benevolent arbitrators, but I see now that is was bargaining. A natural response, but in the long term not a healthy one.

What is more, a lot of these dreams have unintended consequences that would do energy and the economy more harm than good, and some would lead straight to (4). And hardly anyone ever asks, well what if I get my free stuff, but then I lose access to something more valuable when the next guy gets his bailout? Because obviously there is no way government economic engineering could turn around and bite you, right?

In summary, stick with (1) and (2) because (3) is not guaranteed, and I for one will be using my status as a voter to rubbish most of it.

If this sounds harsh, it is because we are past the point where Morpheus can sit down with Neo and have a long debate with helpful animated illustrations about the merits of the red and blue pills. Now we are at a drug store counter. Packet, leaflet, NEXT!
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Re: Bailing out the auto industry and SUV owners

Postby Ibon » Fri 08 Aug 2008, 19:48:48

$this->bbcode_second_pass_quote('Twilight', 'I')f this sounds harsh, it is because we are past the point where Morpheus can sit down with Neo and have a long debate with helpful animated illustrations about the merits of the red and blue pills. Now we are at a drug store counter. Packet, leaflet, NEXT!

I often see things in the same urgent dire light that you present and come to similar conclusions. But at other moments I see our current infrastructure with still plenty of energy and redundancies to allow for enough time for blunders and stupid policies as we re educate people toward the long road of fiscal responsibility, energy efficiency and away from the ugliest aspects of consumerism. When we go deeply into the peak oil crisis and current financial crisis in the USA for example we can obsess to the point that we feel we are up against the wire and time is running out. I spend about 7 months a year in southeast asia on a small island when I turn off the computer except for work and I unplug myself from focusing so intently on these issues and I often find myself then having the insight that although all of this is true and unfolding before my eyes it isn't happening quite so linear and quite as accelerated and dire as it seems when I am plugged into it and getting obsessed. We are such social animals and we do align ourselves with our tribe and this here peak oil community is a tribe of sorts were our beliefs become heavily reinforced. I am thankful that I take a break from this tribe from time to time and enter into completely other points of view. It puts things into perspective. These comments may have drifted too far off topic for whatever its worth.
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Re: Bailing out the auto industry and SUV owners

Postby Twilight » Fri 08 Aug 2008, 20:50:00

Unlike some, I am not expecting collapse tomorrow, I expect it to take a couple of leisurely decades and give way to a future. I avoid group think and expect I am on more than a few ignore lists here for challenging many of the absurdities that are perpetuated, doomer and cornucopian alike. But a couple of decades is not a lot of time to accept setbacks caused by quick fixes for which other people lobbied. I do not think we have the luxury of letting the lowest common denominator approach proceed and start bootstrapping it in the 2020s when people realise they backed the wrong horse and really are in a lot of trouble. It has to be made clear now that the more they do themselves today, the better chance they have of being helped the rest of the way later.

Otherwise, you can see today a taste of what waste may be to come. SUVs with hybrid engines that get less than 25mpg and win environmental awards. Because it is a hybrid, so the reasoning goes, it must be helping. Let's chip in and pay a subsidy to speed up the roll-out. And with that, deny resources to something potentially useful. Similarly, demands in the UK for means-tested cross-subsidy of utility tariffs, which though they might appeal to commonly held notions of social justice, mitigate against the efficiency and demand destruction we urgently need. Yes, urgently; the last few energy policy documents to come out of our sorry stand-in for an energy ministry are scary enough without mentioning the stuff they cannot.

No thanks. If it is crap, I will call BS on it, and if it challenges someone's beliefs, that is the point. To do otherwise would be to indulge false hopes that died in the 80s. It may be painful to hear it, but after well over ten years of trying the education approach, I am ready to say "If you already know what it is doing to your wallet, go sort it."
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Re: Bailing out the auto industry and SUV owners

Postby Javaman » Fri 08 Aug 2008, 21:40:13

$this->bbcode_second_pass_quote('Twilight', 'I') will address the one substantive point:$this->bbcode_second_pass_quote('', '"')Subsidizing something makes more of it." That's a retarded reflection. What subsidizing? Its a "trade in". Of what would there be more to make? People get caught up in buzz words.

The more fuel efficient cars would have to be new, because they do not exist at this moment. At the moment of trade-in, a new vehicle would have to be traded for an old one, and two vehicles would be in existence, where at this moment there is only one - the original. The government financing will in many cases have to extend not only to the price of the new vehicle, but the negative equity in the original. Hence the subsidy. In the event pulling out of Iraq pays for both, that only brings us to the point - good luck pulling out of Iraq.

The rest is political "if only there could be understanding" which is cheap. The beginning and end of the problem is that faced with an unearned windfall, most people piss it away. This is why a sound energy policy should not rely on handouts to private citizens. The real question should be what they are going to have less of

I disapprove of bailing out those who make bad decisions, in this case SUV owners and the companies that built and marketed the SUVs. The additional cost of fuel today, at $4 per gallon shouldn't be too much of a burden compared to when fuel was $1.50, if you made good decisions back then. Yet as fuel costs continue to rise, many more people, even some who don't seem over-extended now, might turn out to be in as bad a predicament in a few years.

So while bailing out bad decision makers is not a good idea, maybe there could be a government-run carpooling program for those who insisted on buying an SUV they can now no longer afford to run. The catch is if they decide to use the service, they must continue using it for an agreed-upon number of years and pay a monthly fee.

In the meantime, burning up valuable fuel in three-ton SUVs isn't doing anybody any real good, so anything we can do to curtail this waste might be worth considering.
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Re: Bailing out the auto industry and SUV owners

Postby Ludi » Sat 09 Aug 2008, 08:47:32

Ibon, don't you think it would be better to withhold aid as a policy that will cause collapse of this segment of the economy and bring them more quickly into sustainability? What about just giving them a bus pass instead of a new car subsidy? Doesn't a new car subsidy just perpetuate an unsustainable system?
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Re: Bailing out the auto industry and SUV owners

Postby Ibon » Sat 09 Aug 2008, 10:34:21

Hi Ludi, As much as I agree to allow this segment of the economy to collapse we have to first provide alternatives to moving people around. When I lived in Switzerland in the 80's I witnessed how this country dealt with curbing the use of the car. Taxing gasoline, expanding public transportation, taxes on the engine size of the vehicle. All of these measures were voted by the citizens. Where I lived in Zuerich I witnessed how they choked off all the main roads into the center of the city and charged outrages parking fees so that using your car was more inconvenient than taking the tram or train. But the country first had to provide the alternative mode of transport before they could choke off the automobile.

Until we provide an alternative there is no way to simply advocate letting the use of the personal automobile collapse as a segment of the economy. So yes ultimately I agree with you but in the meantime what are the best measures to take to reduce fuel consumption during the time we are still dependent on the automobile? In this context the proposal on this thread does have some merit but I would also agree that if I had to choose where to use subsidies then certainly building out our mass transit would certainly have priority over this proposal. But then again this is also something that would take a decade to get through. So as a short term band aid as imperfect as it is why not?

By coincidence sitting on my porch this morning reading the NY times I came across this editorial.... A future for SUV's. Here was the best idea....

With a few adaptations, a Lincoln Navigator might make a nice streetlamp.


The article proposed sending the SUV's to Russia where there is a huge demand for cars and where people would buy them up since they subsidize fuel prices there. Increasing demand for fuel in Russia will certainly help keep down the price of fuel now wouldn't it. Sometimes people really don't see the big picture here.
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Re: Bailing out the auto industry and SUV owners

Postby Ludi » Sat 09 Aug 2008, 13:26:30

Thanks, Ibon. I was just trying to reconcile your attitude toward the auto industry and SUV owners with your attitude toward those who receive food aid. In another thread you seemed to be saying we need to stop food aid to people who are overshooting their carrying capacity. I don't recall you mentioning putting in place an alternative, perhaps this was implied somewhere. As you know, those of us who drive cars are overshooting our carrying capacity enormously. It seems you were saying it was best if those who receive food aid were allowed to fail and shrink down to the carrying capacity. Wouldn't it be equally as good to let the car culture fail and shrink down to its carrying capacity?

Just trying to reconcile these points of view, and maybe I'm misunderstanding you completely! You seem to be cutting a lot of slack to the most egregiously overshooting people of all, while advocating cutting off aid to those who are using the fewest resources.
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Re: Bailing out the auto industry and SUV owners

Postby Ibon » Sat 09 Aug 2008, 14:08:58

$this->bbcode_second_pass_quote('Ludi', 'J')ust trying to reconcile these points of view, and maybe I'm misunderstanding you completely! You seem to be cutting a lot of slack to the most egregiously overshooting people of all, while advocating cutting off aid to those who are using the fewest resources.

Good post Ludi. You bring up a point here that I have been seeing as an inherent contradiction. Depending on which hat I am wearing I switch from a myopic perspective or over to the big picture. On the big picture I advocate the ideal solution I would wish for and that is a radical reduction in the two main sources of our overshoot; dramatically reducing our consumption per capita and dramatically reducing our over population. These ideals are currently not possible where we are in our culture for obvious reasons of status quo inertia and misplaced compassion and ethics etc.

I switch over to the myopic mode when I discuss solutions that don't address perhaps the big picture and the origin of the problem but at least offer solutions or actions that are pragmatic in the sense of steps our culture is perhaps ripe and ready to take.

These are two different things. What I personally would like to see and what is realistic to expect in moving our culture forward.

But the contradiction even goes deeper. Sometimes our impulse is to want to fix something that we know on a deeper level is really fundamentally deeply flawed. At perhaps more courageous moments we see what is fundamentally deeply flawed and we prefer to be agents to help break it down even faster. Does this make sense?
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Re: Bailing out the auto industry and SUV owners

Postby Ludi » Sat 09 Aug 2008, 16:03:56

$this->bbcode_second_pass_quote('Ibon', 'D')oes this make sense?

Completely. I would find myself in some sort of feedback loop if I puzzled much about how to solve these myriad problems, but as I have virtually no power over the wider world, I usually don't ponder these big problems for long. That's my own myopia - concerning myself primarily with things I have some power over - and not trying to solve the problems of the world. For me, personally, those problems are just too big. 8O

We may have an impulse to "fix" these big problems or be an agent for change (constructive or destructive), but many of us (most?) simply don't have the power to affect anything but the very little picture of our own lives and possibly our own communities.
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Re: Bailing out the auto industry and SUV owners

Postby patience » Sat 09 Aug 2008, 19:11:05

Kudi, I feel that way myself, about our personal lack of influence. But maybe we have more influence long term than we realize. When my son in law put up his first windmill at his Dad's place, he didn't feel like he had done anything too big, but since then, people come into their shop every day asking about it, how does it work, and what do they have to do to get a system going on their place. He has a LONG backlog of people who want him to build windmills now, and doesn't even have his own finished yet.

There is always room for good ideas, and now we need a lot of good ideas. People are hungry for leadership to solve the problems they face. I think that when my solar system is in public view, and I have a solar water heater going, I'll spend more time than I want answering questions, but I believe that is how we change the world. One person at a time.

edit: As to the original post, no, let people live with their bad decisions. As cube said, yes, when only small cars are made, they will cost more since they are only made now to meet CAFE standards. Best answer I can see is to jack up the CAFE standards, which should have been done 30+ years ago. Then the market will sort out the problems.
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Re: Bailing out the auto industry and SUV owners

Postby Ludi » Sat 09 Aug 2008, 20:19:11

$this->bbcode_second_pass_quote('patience', ' ')I believe that is how we change the world. One person at a time.

I agree. I guess what I was talking about before is the idea of being an agent or power in the big picture - deciding and making policy decisions about subsidies, etc. I don't think many of us have that kind of leverage. I certainly don't! :)
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Re: Bailing out the auto industry and SUV owners

Postby cube » Sat 09 Aug 2008, 21:46:29

$this->bbcode_second_pass_quote('Ludi', '')$this->bbcode_second_pass_quote('patience', ' ')I believe that is how we change the world. One person at a time.
I agree. I guess what I was talking about before is the idea of being an agent or power in the big picture - deciding and making policy decisions about subsidies, etc. I don't think many of us have that kind of leverage. I certainly don't! :)
But Ludi you have a respectable reputation on this board. Granted that doesn't count for any votes in the Legislature but it counts for something. At least people will take the time to read what you have to say!

There are some people on this board who have the reputation of being a Troll. The only thing they've ever accomplished was getting put on someone else's ignore-list. I've seen people, who've "earned" their negative reputation, stand on a soap box and scream 10 times only to have their message fall on deaf ears ---> rightfully so.
But a person with a respectable reputation can whisper and command an audience of 10 people.

You never know Ludi, one of us here reading your posts might become a public official or open up a company.
You might have more influence then you think. :-D
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Re: Bailing out the auto industry and SUV owners

Postby Canuk » Sun 10 Aug 2008, 01:56:52

There seems to be an anti-manufacturing view here but since I own a small manufacturing company I would like to counterpoint this view. Manufacturing is still a significant portion of our economy. It provides many spin off industries that affect the majority of the population whether realized or not - and since the automotive sector is one of the largest sectors of that manufacturing economy it is important.

Bailing out an individual for bad purchasing decisions (buying a specific vehicle) affects only the individual and should not occur - in fact SUV owners may have already received assistance (tax breaks, etc.).

Aiding an industry that is responsible for 12% of manufacturing jobs and therefore many additional jobs in other sectors of the economy could be seen as a responsible move. Unlike aid to retail or tourism (which occurs) manufacturing has a multiplier effect in the economy and aid to that sector will generally help other sectors of the economy. Since we cannot flick the switch and return to an agrarian past we must help in a controlled decline - so partially alleviating the effect of bad car company business decisions (decisions aided by gov't subsidies and policy etc.) is in the interest of the majority of the populace and may be a better use of dollars than artificially propping up house prices...

As I have previously posted I am not advocating direct subsidies (as already occurs) but instead some type of phased protection to allow the companies to retool since this takes years and it is likely they will not be able to complete this rapid of a change without aid we are in for a serious economic decline.
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Re: Bailing out the auto industry and SUV owners

Postby yarbo » Sun 10 Aug 2008, 18:24:26

I understand many of the points that all of you have made and trading out vehicles obviously has its faults. Its obvious many of you have put in lots of time into the consequence of peak oil and have becoem highly educated. I'm obviously not educated enough to really understand the largest picture of peak oil though I can't help but fear that some of you guys / girls may be a wee bit over the top with the hopeless doomsday scenario. I'm sure you've heard this before though and will perhaps disregard that statement as naive. Maybe it is. I hope its not.

When I originally wrote defensively (and I apologize for that) it was in reaction to a post or two that was stating that the ignorant should suffer the consequences of their dumb action of buying SUV's. Those comments really made me react. Many of these people are struggling families, black. white. etc., that bought according to a simple desire of wanting a bigger car. No mal intent, no arrogance...and with absolutely no knowledge of shrinking global oil supply. If you look within your own families you may find people that fall under the category of those that do not question and believe what they are presented. In the larger picture these people if correctly directed will be the largest moving force of change....just like they always are since they represent the majority. This is not an arrogant stance since if you think about it you have to recognize that the function of any society is reliant on mass unquestioning agreement and allegiance of the masses to any particular societal code. Yes they are vulnerable to being led to walking in mass over cliffs and jumping over bridges to their demise but they are also generally the most healthy part of a society and you have to bow down to them in gratitude. In a way the more independent thinking you are the more of a freak and a negative for society you are. Many of us with "independent thinking obsession" drift towards being separate and aloof towards others. I'm like this myself. For instance I would bet that one on one, if you pit many people connected to this website with those that go to church that you would more likely find church members to be giving more to charity and providing services and substance for their local communities. Am I wrong? Think PTA bake sales, think sending your kids to the military, think standing on the corner in order to gather money for kids with cancer, think being less willing to cheat on their taxes, think praying for Wanda Lou's daddy down the street that drank too much and near drowned to death in the drainage ditch next to the McMurray farm last tuesday night after he found out that his daughter got pregnant with Cletus, the colored boy bagger at the new Johnsonville Piggly Wiggly, etc. The believers are the nuts and bolts of the business side of what moves a society and makes it cohesive. If you don't effect the believers, you're missing the boat of basic change.

To want to punish all SUV owners for being inconsiderate intentional fuel hogs, is not really addressing the issue, sorry. Many of them hadn't a clue. Replacing SUVs with smaller US cars sounded good to me but y'all pretty much shot that down pretty convincingly for me, but not all the way. I'm a mechanic and try to think in emotionless cause and effect terms. The idea was seen as bail out and I meant it more as simple replacement. Replacement is complicated I now see. None the less, the issue raises emotional feelings of resentment and if the general population would respond with the same sentiment which came out in many posts then it wouldn't fly, I understand.

As far as changing the world around you, I am convinced that it is through recognizing your fellow human as being a potential representation of your own self that you are really able to be most effective. As I mentioned, I live in the south. I am also in business and have had to learn to quell my own initial bias and prejudicial stigma I initially had placed on southerners and conservatives. Honestly, it was through my own interest in making money, or honestly, greed, that I truly learned the value of how to practice effective diplomacy with others I previously used to think of as idiotic. This diplomacy is reliant on not seeing others as my enemy or someone beneath or above me, but someone as an equal to myself and trying to appreciate them as who they are, regardless. I am known as a loose minded person but I have made friends with many of my customers who are quite conservative. If I grew up in their shoes, I would be them, if they grew up in my shoes, they would be me. Its simple, honest and it feels better than being negative and prejudicial. Its effective and you end up with friends, not enemies. Enemies will never listen to you, friends sometimes will. Anyway, it works and I'm sort of wealthy now because of it. Think effective market forces.....

Still, something needs to be done which involves citizens and gathers their support and sense of patriotism with energy conservation. Our current government who knew quite well where we were going all along did nothing to stem or warn anybody of future $4.00 a gallon gas or waning oil supply. Should the next administration try to heal the wounds created by this current pile of deceitful garbage in office and redirect the sentiment of the masses? Sure. It would bind US Citizens and give us global credibility we absolutely need. Perhaps trading SUV's out with smaller cars would be impractical but some radical gesture would be very, VERY effective.

When people had to drive 55 mph back in the 70s everybody hated it. That energy crisis was obviously temporary. This ones more permanent and I think there would be more co-operation if it was obvious to everybody that we're at a point of no return (and if gas becomes $8 a gallon).

Personally, I think these are good times coming up. I see an upcoming era as one of pressure and education. Its the first time I've felt hopeful in years. The enemy is our own consumption and expensive energy will prove it. With the general US population overweight, apathetic, depressed on Prozac and generally unhealthy in mind and body, a changing of the survival equation is no doubt going to be healthy.

Sorry for this too long of a post. Damn I can go on, Christ. Its my first and I bet that's a common problem...

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Re: Bailing out the auto industry and SUV owners

Postby cube » Sun 10 Aug 2008, 20:19:21

To: Yarbo: I think one aspect of this forum that may lead to great "misunderstanding" for a person first time stepping in here, is how often people talk about death, destruction, and a massive economic collapse very casually as if they are enjoying cookies and a light hearted conversation with friends during afternoon tea break.

With the exception of a small number of idiots who have the respect of nobody, people here do not "want" bad things to happen. But many people here see a very dark cloud coming ahead for reasons that would take too long to explain in one thread. Believing in something does not necessarily mean you want it to happen.
//
Getting back to SUV drivers or maybe just anyone who is in financial trouble. The problem is there are too many people in financial trouble, truck drivers, flight attendants, senior citizens who haven't saved a penny. It's like the Titanic is sinking and there's only enough life boats for half of us.
What that means is we'll have to "turn our backs" on half the people out there.
Pulling out of Iraq is a good idea but even then there's not enough money to:
1) fix the housing crisis
2) transition to an alternative energy economy
3) pay for social security for the baby boomers
4) bail out SUV drivers
5) a stimulus check for everybody
I'm not trying to be mean I'm just stating the unpleasant financial truth.
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Re: Bailing out the auto industry and SUV owners

Postby Javaman » Sun 10 Aug 2008, 20:37:46

$this->bbcode_second_pass_quote('Canuk', 'T')here seems to be an anti-manufacturing view here but since I own a small manufacturing company I would like to counterpoint this view. Manufacturing is still a significant portion of our economy. It provides many spin off industries that affect the majority of the population whether realized or not - and since the automotive sector is one of the largest sectors of that manufacturing economy it is important.

Bailing out an individual for bad purchasing decisions (buying a specific vehicle) affects only the individual and should not occur - in fact SUV owners may have already received assistance (tax breaks, etc.).

Aiding an industry that is responsible for 12% of manufacturing jobs and therefore many additional jobs in other sectors of the economy could be seen as a responsible move. Unlike aid to retail or tourism (which occurs) manufacturing has a multiplier effect in the economy and aid to that sector will generally help other sectors of the economy. Since we cannot flick the switch and return to an agrarian past we must help in a controlled decline - so partially alleviating the effect of bad car company business decisions (decisions aided by gov't subsidies and policy etc.) is in the interest of the majority of the populace and may be a better use of dollars than artificially propping up house prices...

As I have previously posted I am not advocating direct subsidies (as already occurs) but instead some type of phased protection to allow the companies to retool since this takes years and it is likely they will not be able to complete this rapid of a change without aid we are in for a serious economic decline.


If I need a small, reliable, fuel-efficient vehicle, I can already turn to any of several foreign manufacturers. The money I might save on fuel, repairs, higher resale, etc., I can spend on other items and services that support the local economy. Or I can save or invest it.

The Big Three have had years to retool already. They used to make/sell cars with higher MPG than they do now. If we bail them out, what guarantee do we have that the vehicles they make will meet our needs or even be affordable for the average person?
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Re: Bailing out the auto industry and SUV owners

Postby Snowrunner » Sun 10 Aug 2008, 21:11:44

$this->bbcode_second_pass_quote('Canuk', 'T')here seems to be an anti-manufacturing view here but since I own a small manufacturing company I would like to counterpoint this view. Manufacturing is still a significant portion of our economy. It provides many spin off industries that affect the majority of the population whether realized or not - and since the automotive sector is one of the largest sectors of that manufacturing economy it is important.
Even though I would agree that manufacturing IS important, car manufacturing in and on itself isn't. You could take the factories that now make cars and use them to make something else. It's not that we don't need manufactured goods, it's just that pretty much most of the stuff has been shipped overseas while the big cars that now nobody can afford anymore (don't think for a second people don't WANT big cars) are the only thing left, together with all their supportive industries.
$this->bbcode_second_pass_quote('', 'B')ailing out an individual for bad purchasing decisions (buying a specific vehicle) affects only the individual and should not occur - in fact SUV owners may have already received assistance (tax breaks, etc.).
Agreed.
$this->bbcode_second_pass_quote('', 'A')iding an industry that is responsible for 12% of manufacturing jobs and therefore many additional jobs in other sectors of the economy could be seen as a responsible move.
This would be rewarding stupidity both on behalf of the consumer and on behalf of the industry. The Government (especially in Ontario) has given huge amounts of taxes to the car makers and now they want even more? They had enough time to at least offer alternative vehicles but due to greed they rather build vehicles that now have become toxic. It sucks for small companies and small suppliers, but hey, it has sucked in the past too when they were replaced by the guys in Asia. A change will and has to happen and it will always be painful, like it or not.
$this->bbcode_second_pass_quote('', 'U')nlike aid to retail or tourism (which occurs) manufacturing has a multiplier effect in the economy and aid to that sector will generally help other sectors of the economy.

Very few industries don't have a "halo" effect. The tourism industry will bring more business to the place where people stay, retail is an outlet for the goods that you and others manufacture, if there would be no retail you would be out of a job too, likewise both pay their own employees which in turn allows them to spend money on manufactured goods.
$this->bbcode_second_pass_quote('', 'S')ince we cannot flick the switch and return to an agrarian past we must help in a controlled decline - so partially alleviating the effect of bad car company business decisions (decisions aided by gov't subsidies and policy etc.) is in the interest of the majority of the populace and may be a better use of dollars than artificially propping up house prices...
Clearly any forward thinking Government (haha!) would invest tax dollars in industries that have a long term benefit. But as they don't have cloud (yet) and as the current employees from those companies are starting to scream, take a guess where money will end up?

As for the houses, again, yes I agree, this shouldn't happen, but it will out of the same reasons. If people can't afford to pay for their houses and end up on the street, they won't be very happy.
$this->bbcode_second_pass_quote('', 'A')s I have previously posted I am not advocating direct subsidies (as already occurs) but instead some type of phased protection to allow the companies to retool since this takes years and it is likely they will not be able to complete this rapid of a change without aid we are in for a serious economic decline
We already are. And throwing good money after those companies that have already gotten lots of money is not a smart choice. Yes, retooling will take time, but it also gives NEW companies that are already ready go a shot at things. Instead of propping up companies that have proven that they have no clue about the long term is idiotic. The Government should support small companies and enterprises who ARE actually bringing something to the economy and won't just pack up and move off the moment they can produce cheaper in China or some other place.
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Re: Bailing out the auto industry and SUV owners

Postby Twilight » Sun 10 Aug 2008, 21:40:37

Well, that makes more sense. The important thing is that good ideas are given an opportunity and bad ideas are shot down, even if the latter are popular. The problem with government initiatives is that bad (but initially popular) ideas can endure far longer than they would if they were left to compete on their merits, and temporary fixes have a way of becoming permanent and sucking in their own budgets. Also, people naturally tend to go for simplistic soundbite quick fixes so they can stop worrying about a problem, and tend to be unwilling to maintain their attention on a multifaceted long-term issue. I think the big idea to get across every time the government does act, is that this does not settle the matter if the public does not meet it halfway somehow.

About car manufacturers - they have too much baggage to be worth saving in their current form. They are a great reservoir of engineering talent, but it is currently being misallocated.
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Re: Bailing out the auto industry and SUV owners

Postby Ibon » Sun 10 Aug 2008, 22:19:39

$this->bbcode_second_pass_quote('Snowrunner', 'C')learly any forward thinking Government (haha!) would invest tax dollars in industries that have a long term benefit. But as they don't have clout (yet) and as the current employees from those companies are starting to scream, take a guess where money will end up?

IF only we had the auto industry's lobby power with start up companies. So how about subsidizing the transition of the auto industry over to manufacturing light rail and electric vehicles? We just have to fire the entire management but keep the laborers. ha ha.
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