Government Motors

[KLang]

(thread title stolen from Drudge :))

Well, fellow taxpayers, how do you like owning 60% of a failed car company? Makes me feel all tingly. :yuck:

[Don Quixote]

Count me out. (Is that an option?) :thumdown:

[Methanolandbrats]

(thread title stolen from Drudge :))

Well, fellow taxpayers, how do you like owning 60% of a failed car company? Makes me feel all tingly. :yuck:

What's the problem, there were very few problems with Russian Cars :gomer:

[TKGAngel]

What's the problem, there were very few problems with Russian Cars :gomer:

That's because in Soviet Russia, car builds you.

[Napoleon]

A neat time line of GM from NY Times (with links to stories in the NYTimes going back to 1908). Of course the picture from 1980 was the first car I bought (and the last GM car I bought). I didn't realize that their ownership of Vauxhall and Opel went back to the 20's.

http://www.nytimes.com/interactive/2009/05/31/business/20090531_GM_TIMELINE.html?hp

[Gnam]

I love this plan. I'm excited to be a part of it. Let's do it.

http://img6.imageshack.us/img6/8457/staypuft.jpg

[oddlycalm]

A neat time line of GM from NY Times (with links to stories in the NYTimes going back to 1908). Of course the picture from 1980 was the first car I bought (and the last GM car I bought). I didn't realize that their ownership of Vauxhall and Opel went back to the 20's.

http://www.nytimes.com/interactive/2009/05/31/business/20090531_GM_TIMELINE.html?hp

Great timeline, thanks for posting it. :thumbup: Nice to see that they included Harley Earl and Bill Mitchell. I feel like I'm at a wake, but I suppose that's appropriate. Here are some random thoughts that came to me...

It's notable that Henry Ford collected so many cars designed by GM stylists Harley Earl and later Bill Mitchell. The Ford Museum has an entire section devoted to Bill Mitchell designed cars. When your cars are good enough to make your arch rival want to collect them, and devote an entire section of his museum to them, you've accomplished something rare.

I count the 1962 Corvair econobox (especially the turbo w/ 4spd in the Monza) and the 1961-63 3.5L aluminum V8 engine (especially the turbocharged version w/ 4spd in the Jetfire) as serious product innovations. The fact that one was killed by an intellectually dishonest and self-promoting zealot and the other by ignorant and ham fisted dealer mechanics not withstanding...:irked: For years GM set the world standard for air conditioning, power window lifts, steering systems and other bits like self-leveling air suspensions, etc., etc. Not much to brag about after the '60's though. :shakehead

oc

[trish]

(thread title stolen from Drudge :))

Well, fellow taxpayers, how do you like owning 60% of a failed car company? Makes me feel all tingly. :yuck:


I'm sure someone else came up with that long before Drudge. I've seen it at other racing forums.

[Napoleon]

I feel like I'm at a wake, but I suppose that's appropriate.

You know, I bet even on this site you could find a quote from me saying the happiest day of my life would be the day GM went bankrupt. But they are the most important player in perhaps the most important manufacturing segment of the economy, and I personally think that you have to be diluted to believe anything but that ultimately the thing that determines a nation's wealth is its manufacturing sector. Anyone that does not grow something or make something is in essence does something that is parasitic. You can not sustain an economy on finance or other services (and I am in the service sector). Plus I grew up in a manufacturing town that will now have one of the few GM plants left in it and I appreciate that there are plenty of good hard working people that make up GM. So it really is a sad event.

[Dvdb]

Hold on to your capitalism (sock tethers?) we are inching closer to socialism.

Government owned manufacters are never a good idea.

[datachicane]

Hold on to your capitalism (sock tethers?) we are inching closer to socialism.

Government owned manufacters are never a good idea.

It's not like there was much in the way of desirable alternatives.

[cameraman]

Hold on to your capitalism (sock tethers?) we are inching closer to socialism.

Government owned manufacters are never a good idea.

Don't forget that the government wants to divest as soon as possible.

[Napoleon]

Some interesting facts from the link below, which has more on GM including that today they will be selling Hummmer.


General Motors Corp.'s $82.2 billion in assets and $172 billion in liabilities spell out the extent of its problems and sheer breadth of the 101-year-old giant's bankruptcy.

In a torrent of filings at the U.S. Bankruptcy Court in Manhattan, GM's mind-numbing scale is evident: It has 463 subsidiaries and has built 450 million cars and trucks over the years. It employs 235,000 people worldwide. This includes 91,000 in the United States, which it pays $476 million each month, and 493,000 retirees with various benefits. It spends $50 billion a year buying parts and services from 11,500 vendors in North America.

http://www.calculatedriskblog.com/2009/06/gm-news.html

[Insomniac]

Only 60%?

[extramundane]

Only 60%?

Treasury owns 60%, 12% goes to Canadian national govt'/Ontario provincial gov't, 17.5% UAW Healthcare Trust, 10% bondholders.

NYT says the Hummer deal is with a Chinese company that isn't currently an auto manufacturer. Supposedly the deal prohibits the export of military technology, so there's that.

[Napoleon]

NYT says the Hummer deal is with a Chinese company that isn't currently an auto manufacturer. Supposedly the deal prohibits the export of military technology, so there's that.

Here is the story:



http://www.nytimes.com/2009/06/03/business/03auto.html?hp

[Michaelhatesfans]

Hold on to your capitalism (sock tethers?) we are inching closer to socialism.

Government owned manufacters are never a good idea.

I really don't see this as a long term thing. I think it's more like a tourniquet to keep the patient alive long enough to reach the E.R.

But in terms of shifting attitudes, yes, capitalism hasn't been doing itself any favors lately.

[datachicane]

But in terms of shifting attitudes, yes, capitalism hasn't been doing itself any favors lately.

Insert obligatory Santayana quote here.
The problem isn't capitalism. The problem is the old one of "I've got a hammer, and every problem is a nail". Every complex problem has a simple and elegant solution that will not work- if you can describe it in ten words, you can be pretty sure it's bull***** (whether it's Eat the Rich or Let the Market Decide). Intellectual fundamentalism makes you stupid.

On a related note, it's ironic that folks have forgotten that some of the biggest proponents of ideas like progressive taxation were conservatives.
Now, not only do we have no cultural memory of why that was the case, the cynical and/or ill-informed argue that the very idea is somehow tantamount to socialism. :saywhat:

[Napoleon]

. . . the cynical and/or ill-informed argue . . .

You are too kind. I think I would have worded that significantly differently.

[coolhand]

Well, they can count me and many others to never buy a "GM" based on the principle.
http://www.youtube.com/watch?v=rAqPMJFaEdY

[KLang]

http://www.youtube.com/watch?v=rAqPMJFaEdY

:rofl::rofl:

I doubt I'll be buying any GM products anytime soon. Assuming of course we are alowed to buy anything else. :eek:

[Michaelhatesfans]

Every complex problem has a simple and elegant solution that will not work- if you can describe it in ten words, you can be pretty sure it's bull*****

:laugh:

See, you'd never make it in corportate media. What, you're going to inform people without lame ass sound bites? You're such an elitist.

:laugh:

[datachicane]

:laugh:

See, you'd never make it in corportate media. What, you're going to inform people without lame ass sound bites? You're such an elitist.

:laugh:
http://images1.wikia.nocookie.net/memoryalpha/en/images/thumb/a/a6/Talosian_keeper.jpg/292px-Talosian_keeper.jpg
:tony:

[Indy]

But in terms of shifting attitudes, yes, capitalism hasn't been doing itself any favors lately.

I fail to see what capitalism has to do with any of this. The voters elected the politicians who sold the influence to soften the regulations to encourage the ill-advised lending which led to credit destruction which allowed the money grabs known as bailouts. Meanwhile Mr. "I am not going to kick the can down the road" is continuing his predecessors can-kicking by forcing us further up the debt-productive capacity curve, which is looking real freaking vertical these days. The car companies, who have been playing russian roulette for ages, waiting for nationalized health care while moving as much overseas as fast and completely as possible, just happened to spin to the chamber with the bullet in it. Bankruptcy could have taken care of that without the gubmint stealing the assets for its political contributors, but hey, why not loot the thing, we are looting everything else.

Failure of capitalism this is not. This is the failure of a constitutional republic.

[Boatdesigner]

Speaking of the Constitution, has anyone found the section that actually authorizes the feds to acquire private businesses? James Madison, considered the principal author of the Constitution couldn't even find the section allowing the feds to spend money helping people who were down and out. In 1794 on the floor of the house he said: "I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents."

Our modern day pols have not only found that section, but one that lets them use our money to buy private businesses that are bankrupt! And the sheeple just let them do whatever they please.:shakehead

[oddlycalm]

So it really is a sad event.

Yeah, on a lot of different levels. For the moment people are focused on the failure of the business and the politics of the moment. What is truly being lost won't be documented until later, but it will be felt in very fundamental ways.

The media flashes a few images of assembly plants and the number of plant closures and that's the story to most people. Nobody addresses the loss of hundreds of thousands of very highly paid technical and engineering jobs at the companies that tool and provide special process equipment the domestic industry. I grew up in Detroit and the story there was always the number of toolmakers that were laid off in any downturn, not assembly workers, because those were the highly skilled and highly paid people. Many if not most of those jobs are now being quietly lost forever in cities all around the Great Lakes region.

You can train somebody off the street to do assembly work but when the tool and specialty equipment companies close and the people drift away their expertise is gone forever. The transplant companies tool their plants and source machinery in their home country, not in the US, because their manufacturing engineers don't speak English. They don't even deal with the US subsidiaries of their suppliers. While the local community may get a payroll for 1500 low wage assembly jobs the high end work where all the money is made goes to companies in Asia and Europe.

Losing these tooling and equipment outfits is going to hurt companies like Cummins, Cat, Kohler, Ingersoll-Rand, Timken, etc., etc., etc. because while they depend on the same companies they don't generate the volume of work necessary to support a healthy tooling industry. This puts the US on track to become a true manufacturing backwater, and with our balance of trade deficit that's a real bad place to be.

oc

[Andrew Longman]

This puts the US on track to become a true manufacturing backwater, and with our balance of trade deficit that's a real bad place to be.

oc

As a practical matter, I think that happened years ago, just less so in the auto industry.

The critical mass off manufacturing-related suppliers in China made the US uncompetitive a long time ago. If you want to manufacture a product there are are countless manufacturers in China who can price and build you a prototype in a matter of days (as opposed to weeks and months in the US). They can do so because of the deep and competitive network of suppliers that allows manufacturers to get almost anything the want very quickly and cheaply.

The Big Three, especially Chrysler, have been grinding their suppliers into dust for year. Because they didn't view them as strategic partners and because they didn't think very clearly about strategy in general, now that they have killed themselves they are only finishing the job they started years ago to kill the suppliers.

Not saying you are wrong, you are not, just that I shed tears for the midwest auto industry years ago. I don't have many now though I was in Detroit just a few weeks ago and I was really disturbed by how far it has fallen.

[chop456]

The new Buick Lacrosse looks surprisingly good. If they could get the designers that did that, the Impala, Corvette, Lambda platforms and CTS together...

Horse, meet barn. :rolleyes:

[Methanolandbrats]

As a practical matter, I think that happened years ago, just less so in the auto industry.

The critical mass off manufacturing-related suppliers in China made the US uncompetitive a long time ago. If you want to manufacture a product there are are countless manufacturers in China who can price and build you a prototype in a matter of days (as opposed to weeks and months in the US). They can do so because of the deep and competitive network of suppliers that allows manufacturers to get almost anything the want very quickly and cheaply.

The Big Three, especially Chrysler, have been grinding their suppliers into dust for year. Because they didn't view them as strategic partners and because they didn't think very clearly about strategy in general, now that they have killed themselves they are only finishing the job they started years ago to kill the suppliers.

Not saying you are wrong, you are not, just that I shed tears for the midwest auto industry years ago. I don't have many now though I was in Detroit just a few weeks ago and I was really disturbed by how far it has fallen.

Quality is the problem. I bought a stainless steel coffee mug from China last week. It rusted in two days. :saywhat: I can't wait till I need to replace the wheel bearings in one of my cars and the bearings are from China. I guess I can carry the bearing press and a spare set in the trunk when I leave town. :mad:

[Napoleon]

OC and Andrew, two great responses that I could write 10,000 words on, but I will try to keep it shorter, but it may take me a few days to get back to you with a response/my take on your points so that I am not firing off a semi-incoherent take.

(and PS, it is amazing that both of you focus in on points that I have been astounded in that almost all of which have been completely ignored in the discussion that has surrounded the bailout of the auto industry, and yet in many ways they should be central to the discussion).

[datachicane]

I fail to see what capitalism has to do with any of this. The voters elected the politicians who sold the influence to soften the regulations to encourage the ill-advised lending which led to credit destruction which allowed the money grabs known as bailouts. Meanwhile Mr. "I am not going to kick the can down the road" is continuing his predecessors can-kicking by forcing us further up the debt-productive capacity curve, which is looking real freaking vertical these days. The car companies, who have been playing russian roulette for ages, waiting for nationalized health care while moving as much overseas as fast and completely as possible, just happened to spin to the chamber with the bullet in it. Bankruptcy could have taken care of that without the gubmint stealing the assets for its political contributors, but hey, why not loot the thing, we are looting everything else.

Failure of capitalism this is not. This is the failure of a constitutional republic.

If by 'soften the regulations' you mean the repeal of Glass-Steagall and the like, I'd agree with you. If you're talking about that tired old talk-radio scapegoat of the CRA, the numbers just don't support the theory.

While I've got a serious cynical streak, I'm not certain how the GM bailout can be characterized as either 'stealing the assets for <> political contributors' or 'looting'. Recall that a foreign Gubmint was about the only party interested in Mopar, and folks interested in keeping the doors open weren't exactly lining up for GM, either.

[oddlycalm]

As a practical matter, I think that happened years ago, just less so in the auto industry...

Agreed, the investment banks that brought us to ruin recently were also behind the mindless acquisition spree of the 70's, 80's and 90's, and in retrospect they seem to be the only ones to benefit. :irked: Instead of investing in their plants and research companies were saddled with crushing debt service and management fees to conglomerates interested only in how much cash they could squeeze out this quarter. That bought management to an all time low as well. Detroit is simply catching up to the trend.


The critical mass off manufacturing-related suppliers in China made the US uncompetitive a long time ago.

Yes, but we are referring to somewhat different market niches I think. For specialized machine tools, precision tooling, gaging, instruments and specialty equipment the Chinese are still buyers rather than producers and purchase what they need from the US and Europe. The Chinese market is currently the only bright spot at the moment for US companies in these sectors.


I shed tears for the midwest auto industry years ago. I don't have many now though I was in Detroit just a few weeks ago and I was really disturbed by how far it has fallen.

Yeah, this isn't my first wake either, but my history with the US auto industry goes back. I still have the original gold pencil renderings on midnight blue paper that my grandfather did while he was at Auburn and Cord. Those cars are still highly regarded. He worked for Harley Earl when he went to GM. My dad and five uncles were engineers or stylists at the various companies, though one later took a left turn and became a preacher. While I left the Detroit area in 1967 I've been a supplier to the auto companies at times over the years since then and have been in virtually all their manufacturing plants at one time or another. Some, like GM Tonawanda engine and Chrysler Kokomo transmission have had recent investments of over $1 billion each and are world class operations though you'll never hear that reported anywhere.

Detroit was big as boom towns go and it's 100yr cycle is about over. I haven't visited since 2000 (my business travel schedule strangely correlated to race dates :D), but it was already spooky. Driving out Grand River there were huge tracts of land that were returning to nature. Before long there will be more deer and raccoons than people I imagine.

oc

[Napoleon]

No link for these since I heard them on the local news segments on the radio but GM thinks its demand is so strong they will not be shutting down their plants company wide in July for a couple of weeks like they traditionally do (although the nearby Lordstown plant will close to convert it to Cruze production). Also for the first time in 25 years the American manufacturers have edged out the Japanese manufactures in initial quality.

[High Sided]

Also for the first time in 25 years the American manufacturers have edged out the Japanese manufactures in initial quality.

ford 5th
toyota 21st

http://www.telegraph.co.uk/motoring/news/7837082/Ford-on-the-rise-as-American-car-makers-enjoy-comeback.html

[Napoleon]

ford 5th
toyota 21st

[Breaking out giant red, white and blue foam hand with index finger extended] USA, USA, USA!!!!!

[TravelGal]

Lincoln better than Volvo and Jaguar better than Volkswagen. Could you even have imagined that years ago?

[KLang]

Had a Chevy Equinox as a rental in Colorado this past week. It was much better then most GM products I've been in for the last couple decades. Didn't have any giddyup, but beyond that it didn't completely suck.

Still wouldn't consider buying anything from GM while we, the taxpayers, own most of the company. :irked:

[Napoleon]

GM sells more cars in China then US. (http://www.nytimes.com/2010/07/22/business/global/22auto.html?hpw)

Also interestingly in the article is that analyst are giving a range of values for what they think GM will go for in an IPO and if they hit right in the middle the US Gov. makes a profit on the whole thing.

[KLang]

Article in today's Wall Street Journal says GM is going to pay $3.5 Billion for a company called AmeriCredit, 'the largest provider of loans to car buyers with less-than-stellar credit'. :saywhat:

This is mind boggling to me given what has been going on in the mortgage industry.

[Napoleon]

This is mind boggling to me given what has been going on in the mortgage industry.

Considering what happen to GMAC you don't even need to look to the mortgage industry. I recalll reading that old GM (and they were not the only one) was basically making all their money off of the finance arm and the article I read that in called them a bank that happen to make cars.

This can get into a whole discussion on how screwed up our economy is and how the out of control financial sector, which quite frankly is a parasitic industry in that it doesn't produce wealth but just moves it around, is taking a bigger and bigger piece of the pie but that would be way OT.

[oddlycalm]

a bank that happen to make cars.
True. GMAC was among the top mortgage banks and it was the top auto loan outfit.

At first it was to have something to do with all the cash they were making manufacturing products. Once they discovered they could make more as a bank than manufacturing it contributed to the rise of the financial people in management, the consolidation of the financial and corporate management in one location, and a long succession of CEO's that succeeded in killing the company.

Roger Smith and his ilk were able to handily undo what it took talented men a long time to build. Their recipe was simple; no respect for the product, no respect for the customer and no respect for the employees. Small men with small minds. :thumdown:

oc

[Indy]

Once they discovered they could make more as a bank than manufacturing it contributed to the rise of the financial people in management, the consolidation of the financial and corporate management in one location, and a long succession of CEO's that succeeded in killing the company.

Roger Smith and his ilk were able to handily undo what it took talented men a long time to build. Their recipe was simple; no respect for the product, no respect for the customer and no respect for the employees. Small men with small minds.

I saw it myself. It wasn't that everyone in the company was a bean counter, it was that the bean counters were determining the bonuses.

Great post, oc. You have summed it up better and more succinctly than anyone else I have read.

[Indy]

...the out of control financial sector, which quite frankly is a parasitic industry in that it doesn't produce wealth but just moves it around, is taking a bigger and bigger piece of the pie but that would be way OT.

I am not so sure it is OT, considering the post following yours by oc. The truth is that GM's choice to be a lender rather than a carmaker led directly to their demise.

And you are absolutely right about the financial sector. I have been saying this for years and no one will listen to me (not that there is anything unusual about that :D). Banking and finance should be regulated utilities. They should exist to provide a service to the country and nothing else. There should be no gambling, no incentives to make bad loans, no billion dollar bonuses. You are correct, they add no value to our economy beyond providing the financial lubrication we need. The betting activities create no wealth, they simply move money around.

[nrc]

Banking and finance should be regulated utilities. They should exist to provide a service to the country and nothing else. There should be no gambling, no incentives to make bad loans, no billion dollar bonuses. You are correct, they add no value to our economy beyond providing the financial lubrication we need. The betting activities create no wealth, they simply move money around.

That's absurd. Financing is always a gamble. Without the ability to take risks there is no ability to innovate or grow. You're talking about the government taking over the entire economy. No thanks.

The problem is that we're repeatedly bailing out companies and people from their stupid decisions. They've come to expect it. That can't continue.

[Insomniac]

That's absurd. Financing is always a gamble. Without the ability to take risks there is no ability to innovate or grow. You're talking about the government taking over the entire economy. No thanks.

The problem is that we're repeatedly bailing out companies and people from their stupid decisions. They've come to expect it. That can't continue.

We absolutely need investment banks and VCs. I think the mess is when they are all combined into one big financial business. What was so bad about Glass-Steagall?

[cameraman]

What was so bad about Glass-Steagall?

Pretty simple really, it prevented a bunch of people from getting insanely rich while screwing the banking industry into the ground. Can't have that kind of thing happening...

[nrc]

Fortunately there's a reasonable middle ground between complete Laissez Faire and nationalizing the banking and finance industry.

[Michaelhatesfans]

Fortunately there's a reasonable middle ground between complete Laissez Faire and nationalizing the banking and finance industry.

You've obviously left our borders...

[Insomniac]

Fortunately there's a reasonable middle ground between complete Laissez Faire and nationalizing the banking and finance industry.

Middle ground. :rofl:

There are for us logical people, but not the people who make laws.

[Ankf00]

Fortunately there's a reasonable middle ground between complete Laissez Faire and nationalizing the banking and finance industry.

1 question: How did you come about gaining acces to a rocketship to mars? Actualy, 2 questions, why wasn't I invited? :gomer:

[nrc]

1 question: How did you come about gaining acces to a rocketship to mars? Actualy, 2 questions, why wasn't I invited? :gomer:

Actually, we're headed for Planet 10.

Where are we going? Planet 10! When are we going? Real soon!

[Indy]

This can get into a whole discussion on how screwed up our economy is and how the out of control financial sector, which quite frankly is a parasitic industry in that it doesn't produce wealth but just moves it around, is taking a bigger and bigger piece of the pie but that would be way OT.


And you are absolutely right about the financial sector. I have been saying this for years and no one will listen to me (not that there is anything unusual about that :D). Banking and finance should be regulated utilities. They should exist to provide a service to the country and nothing else. There should be no gambling, no incentives to make bad loans, no billion dollar bonuses. You are correct, they add no value to our economy beyond providing the financial lubrication we need. The betting activities create no wealth, they simply move money around.


That's absurd. Financing is always a gamble. Without the ability to take risks there is no ability to innovate or grow. You're talking about the government taking over the entire economy. No thanks.

The problem is that we're repeatedly bailing out companies and people from their stupid decisions. They've come to expect it. That can't continue.

In my opinion the problem with your argument is that in this day and age we will bail out people for their stupid decisions (or evil, I would argue) because everything is so interconnected that to not do so would result in economic collapse. We have two choices: regulate and protect ourselves, or rely on the markets and risk catastrophe.

Let me give you an example of why financial "innovation" is a problem. http://frederickkaufman.typepad.com/files/the-food-bubble-pdf.pdf

Smart guys, right? Made billions. Really, really innovative.

Except they didn't invent anything but another way to move other people's money around. No innovation. No added value. Pure parasitic behavior. Why should we tolerate these crooks?

[nrc]

Except they didn't invent anything but another way to move other people's money around. No innovation. No added value. Pure parasitic behavior. Why should we tolerate these crooks?

Nobody said anything about tolerating crooks. I'm talking about real companies that are born, grow and create real economic growth. They all require someone to take a chance on them and most of them fail. That doesn't happen without risk.

I'm not arguing against reasonable regulation, I was responding to a call to essentially nationalize the banking and finance industry.

[Methanolandbrats]

My nephew manages over a billion dollars. I cannot even begin to tell you how ****ed up the system is. A few people rake in millions, the rest of us, including pension funds and "long term investors" :rofl: are screwed . The odds are stacked worse than Vegas. Almost nothing was learned when the housing bubble popped. Round two is just around the corner. The big problem was letting huge banks also become investment houses. That coincided with the Street beginning to chase yield and short term gain while ignoring risk.

[nrc]

My nephew manages over a billion dollars. I cannot even begin to tell you how ****ed up the system is. A few people rake in millions, the rest of us, including pension funds and "long term investors" :rofl: are screwed . The odds are stacked worse than Vegas.

I must be an investment genius because I'm still making money. You take your money to Vegas and I'll leave mine in a diversified portfolio and we'll see who does better. The truth is that any prudent investor can make money over time.

The problem is not people raking in millions, the problem is people who commit what is essentially either fraud or financial negligence.

[Methanolandbrats]

I must be an investment genius because I'm still making money. You take your money to Vegas and I'll leave mine in a diversified portfolio and we'll see who does better. The truth is that any prudent investor can make money over time.

The problem is not people raking in millions, the problem is people who commit what is essentially either fraud or financial negligence.

Are you managing your own money?

[nrc]

Are you managing your own money?

On a fund level, yes.

[Indy]

Certainly the real return for the average investor over the past ten years is less than zero, and that is probably true over the past twenty years as well. Since the post-WWII boom subsided Wall Street has been a fool's bet for the general public but a bonanza for the sociopaths who run it.

I am talking about reasonable regulation, nrc, which is why I referred to its legitimate function as that of a regulated utility. Like water and sewer, banks are part of our national infrastructure and should receive a decent profit for services provided, and nothing more. But reasonable regulation in this case does mean tight control.

[Methanolandbrats]

Certainly the real return for the average investor over the past ten years is less than zero, and that is probably true over the past twenty years as well. Since the post-WWII boom subsided Wall Street has been a fool's bet for the general public but a bonanza for the sociopaths who run it.

I am talking about reasonable regulation, nrc, which is why I referred to its legitimate function as that of a regulated utility. Like water and sewer, banks are part of our national infrastructure and should receive a decent profit for services provided, and nothing more. But reasonable regulation in this case does mean tight control.

An excellent example of improper, but not illegal conduct was the gunslingers who ran state pension funds and were buying and selling derivatives of derivatives because they were persuing insane annual growth targets while ignoring risk. They knew it was a pyramid scheme, but they just prayed they would not be the last buyer and they could bank yet another bonus check. Those *******s walked away rich and millions of retirees saw their pensions go poof.

[Indy]

Part of me thinks it is hopeless. Washington and most state governments are terribly corrupt. The politicians are there for the wrong reasons, and they are largely ruled by those with the deepest pockets, i.e. the biggest crooks. And of course the real reason for all this is that the people are dumb and getting dumber. The Great Experiment has failed because the general population have never been educated enough to understand the Enlightenment principles of the founders (most have probably never heard of the Enlightenment).

The truth is most people want to be ruled, so that's what they have voted in to power. Personally, if I could design my perfect world it would be like a Libertarian utopia. But if I have to live in this world with these people, I want someone with more intelligence to be in charge and willing to do what it takes to control the worst of human impulses. Does that mean a nanny state? I suppose it depends on how you look at it, but from my point of view the majority of Americans are unable to care for themselves, much less participate as citizens, and, yes, they need a nanny.

The only remaining questions: Can we lift ourselves up and at least choose to regulate the corrupt and reckless, or will we descend into a corporatist/fascist Hell? Can we avoid having the chief nanny jobs taken over by the sort of sociopaths and psychopaths we have seen in power more often than not in recent years? Can we cooperate for a better America, or will our "screw you, I am getting mine" attitudes prevent us from working together to be the best we can be?

[Methanolandbrats]

Part of me thinks it is hopeless. Washington and most state governments are hopelessly corrupt. The politicians are there for all the wrong reasons, and they are largely ruled by those with the deepest pockets, i.e. the biggest crooks. And of course the real reason for all this is that the people are dumb and getting dumber. The Great Experiment has failed because the general population have never been educated enough to understand the Enlightenment principles of the founders (most have probably never heard of the Enlightenment).

The truth is most people want to be ruled, so that's what they have voted in to power. The only remaining question is can we lift ourselves up and at least choose to regulate the corrupt and reckless, or will we descend into a corporatist/fascist Hell. Time is running out.

Methinks option #2 is inevitable.

[Ankf00]

"graham-leach," "Part D," "financial reform," "health care"

don't need many more examples of corporatism at play

[nrc]

Certainly the real return for the average investor over the past ten years is less than zero, and that is probably true over the past twenty years as well. Since the post-WWII boom subsided Wall Street has been a fool's bet for the general public but a bonanza for the sociopaths who run it.

I guess I'm an above average investor then since I haven't lost money over either of those periods. Yes, if you invested in a straight index fund over the past decade you'd be down a few tens of a percent, but nobody who needs their money out today should have that kind of investment.


I am talking about reasonable regulation, nrc, which is why I referred to its legitimate function as that of a regulated utility. Like water and sewer, banks are part of our national infrastructure and should receive a decent profit for services provided, and nothing more. But reasonable regulation in this case does mean tight control.

Water and sewer are regulated as utilities because there is only one source for that service. That's an entirely different model than regulation of a competitive piece of infrastructure like banking, finance, telecommunications, transportation, etc.

I'm not going to argue vague terms like "tight control". Certainly it was a mistake to completely remove the barriers between finance and banking. Banking requires tighter regulation than finance. Which is not to say that finance doesn't need tighter regulation than what lead to the current problems.

I certainly agree that the incestuous relationship between the supposed regulators and those being regulated is a big part of the problem. It's laughable to see them put showboating their outrage over these corporate bigwigs knowing full well that they'll be collecting the same campaign contributions from them tomorrow and the same lobbying fees a few years from now.

But if part of the problem is that people are stupid (why yes, a huge mortgage on an ARM while we have record low interest rates seems like a great idea) then it's foolish to think that saving them from their stupidity will do anything but make them more stupid.

But then maybe that's the idea. Bail out the idiot public and tell them it's not their fault. It was those predatory lending practices. Nobody can expect you to actually read and understand what you're signing. Then you give them a corporate robber baron show trial and presto, masses appeased, status quo preserved.

[Napoleon]

GM reports its largest annual profit in its history. (http://www.nytimes.com/2012/02/17/business/gm-reports-its-largest-annual-profit.html?hp)

[aportinga]

GM reports its largest annual profit in its history. (http://www.nytimes.com/2012/02/17/business/gm-reports-its-largest-annual-profit.html?hp)

And all it had to do was stop building **** cars... Which they were perfectly capable in doing in the first place.:thumdown:

[NismoZ]

So, we still own 32% and give 'em $10,000 to to build each "car we can't live without", send up to 7k ea. to thank workers whose pensions we fund and the company still doesen't have to pay taxes 'til '016? Generous Motors indeed! When does the TARGET FORD campaign start...to (raise) the level of the playing field?

[WickerBill]

Buy Ford. GM still isn't making good cars; they're only making cars that aren't quite as crap as before. The Cruze, for instance, is celebrated not because it's good but because it "is so much better than the Cavalier". Talk about a back-handed compliment. Equiv: "Red Lobster is so much better than Long John Silvers!"

[KLang]

Chevy Cruze Recall (http://www.freep.com/article/20120622/BUSINESS01/120622031/GM-recalls-all-Chevy-Cruzes-over-engine-fire-risk)

Every single Chevy Cruze manufactured through May 2012 recalled. :shakehead

[Ankf00]

Rick Wagoner knew how to count to potato.

[chop456]

Had a Cruze for a rental last weekend. I liked it.

I would have liked it substantially less if it had caught on fire.