Auto workers are being idled at various auto manufacturing plants nationwide due to decreased demand. According to this article, this is not the first time this year that workers have been temporarily laid off because of a shrinking market for their products. This is the same market-shrinkage that is the cause of the “Big Three’s” claim that they are losing up to $7 BILLION per month, and may run out of money by the end of December, and is the reason they want US (the taxpayer) to give them another $25 BILLION dollars.
The problems with this are many. Firstly, since they are losing money because of lack of sales of their products, dumping money into their companies is a band-aid solution, at best. There is no way that handing them $25 BILLION is going to improve the market for their products. It’s not going to increase efficiency of their factories. In fact, if they are losing $7 BILLION every month, having them $25 BILLION simply means that they will run out of money in March 2009, instead of December 2008. 3 Extra months, at the end of which they will either run out of money, or ask us to give them more. So, what they are asking is for the government to take OUR money (under threat of force) and use it to pay their operating expenses (including huge bonuses for their execs) so they can continue to lose $7 BILLION every month.
“Rich Boruff, vice president of UAW Local 685, said workers from Kokomo’s four Chrysler plants have been placed on furlough at various times throughout the year due to declining sales.”
They don’t want us to notice that handing them $25 BILLION dollars is going to do absolutely nothing to improve this situation. They claim that this is NOT a “handout,” but rather a “loan.” Well, if they are losing $7 BILLION EVERY MONTH, how are we to believe that they can suddenly make enough short-term PROFIT to pay back not only the original $25 billion “loan,” but interest as well? I guess they want us to believe that “loaning” them $25 BILLION dollars is magically going to create a market for the expensive trucks and SUVs that they build, but is also going to suddenly make more of the public eligible for enough credit to buy those trucks and SUVs, and that the auto companies will suddenly make the enormous profits they want to and can gleefully pay back the American Public everything they owe PLUS interest.
If a bank loaned money to an individual who was living FAR beyond their means, and had no reasonable expectation that it could possibly be paid back with interest, this would be a “bad loan,” and whoever approved such a loan should be fired. If this sort of loan was approved regularly as a matter of policy, it could create a banking crisis. Wait! That sounds familiar, doesn’t it?
The government tells us that the whole cause of the banking crisis was that banks got so greedy that they were making “bad loans” to people who had no reasonable ability to pay it off. Now, the government tells us that the only way to “save the Big Three” is to make an ENORMOUS bad loan using public funds, with no reasonable expectation it will be paid back! Either the legislators are stupid beyond all belief, or they think that The Public is.
The Big Three just want SOMEONE to hand them $25 BILLION dollars. As long as somebody does, they probably won’t have to ask for another $25 BILLION until March 2009. And, since this will magically make them profitable, they will certainly pay back this “loan” PLUS INTEREST. They promise. Cross their hearts. . . .
It must be nice to live in a fairy tale world.