US car industry

[han]

I think that there are companies that may be suitable for government ownership but I don't think a car company (are any kind of company that produces physical consumer products) is one of those. I'm thinking more about companies that sell electricity or even banks.

[Winstonm]

As I have suggested before it just may be eaiser for the government to buy the car companies, say you can only buy from us and no one else including individuals and you must buy what we make.

 

I think this was tried in East Germany some years back with less than spectacular success.

[mike777]

Having banks be owned by the Central Government is a good idea if it is smarter than free capital markets in allocating credit. Credit is the lifeblood of modern economies.

 

Picking winners over losers in this fast paced modern economy is tough, if central governments can do a better job in allocating credit, we should let them.

 

It is at least worth a discussion given that Citigroup has been bailed out of bankruptcy by taxpayer bucks at least 3 times since 1980.

 

I thought I read somewhere(no citations) that Krugman advocates at least a tempory takeover of the banks by the Washington.

 

edit:

http://www.democrats.com/the-krugman-plan-...e-failing-banks

 

http://krugman.blogs.nytimes.com/2008/11/24/citigroup/

[mike777]

As I have suggested before it just may be eaiser for the government to buy the car companies, say you can only buy from us and no one else including individuals and you must buy what we make.

 

I think this was tried in East Germany some years back with less than spectacular success.

Granted, thank God we are doing so much better this way . ;)

 

We have a nat of car companies it seems all but in name, yes? Only the current owners and creditors get to be friends with benefits?

[JoAnneM]

Just talked to my brother-in-law in Tuscon. He said at one new car dealer it's buy one new car and get another new car - free!

[helene_t]

I think they should just let them go bust. I can't believe Americans will stop buying cars, so someone else will take over the plants and do something with them. So most of the workers will keep in business, I think. Too bad that the shareholders lose their money but the government has bigger problems to think about (and to spend its non-existing money on).

[Al_U_Card]

The auto industry has only been coerced (legislatively) into better safety and more economical vehicles etc.  Where they were allowed to do what they wanted, they always opted for the fast buck.

 

Government should impose restraints and guidelines that must be followed. Gee, we will have a nation of small cars that save our money and the environment....how ever will we live with that????

As I have suggested before it just may be eaiser for the government to buy the car companies, say you can only buy from us and no one else including individuals and you must buy what we make.

 

This is basically what you are saying.

 

I think this goes back to the fundamental issue, is the government smarter than the free markets. Keynes suggests it may be.

Not even close, Mike.

 

The government decrees that all cars must achieve 100 miles per gallon and have 0 nitrate and particulate emissions.

 

Then the free market races to get the appropriate product onto the market.

 

Everyone wins.

[mike777]

The auto industry has only been coerced (legislatively) into better safety and more economical vehicles etc.  Where they were allowed to do what they wanted, they always opted for the fast buck.

 

Government should impose restraints and guidelines that must be followed. Gee, we will have a nation of small cars that save our money and the environment....how ever will we live with that????

As I have suggested before it just may be eaiser for the government to buy the car companies, say you can only buy from us and no one else including individuals and you must buy what we make.

 

This is basically what you are saying.

 

I think this goes back to the fundamental issue, is the government smarter than the free markets. Keynes suggests it may be.

Not even close, Mike.

 

The government decrees that all cars must achieve 100 miles per gallon and have 0 nitrate and particulate emissions.

 

Then the free market races to get the appropriate product onto the market.

 

Everyone wins.

1)Or the free market says here are the keys to the front door, you make whatever you want. You miss your own point. You have the Central government tell them what to make, and if they do not, what happens?

2) The government says make cars that do 100 mpg and zero pollution. Not the customer, not the owners of the company.

3) You offer zero proof that these cars can be sold for a profit.

4) If you have such proof, then you make the cars...you seem to want to tell people what to do, but not put up your own money and make these cars. That is my point. Please put your own money up and if you fail, you lose your money, not the taxpayers.

[helene_t]

If all cars have to go 100 mpg then they can be made with profits, since people need cars and will be willing to pay whatever it costs. But of course there will be a long transition period when car makers are having excess capacity while adjusting to people having fewer cars and old wrecks that presumably don't have to comply.

 

Anyway, I think it's an insane idea. Gas taxes are much more targeted and easier to implement.

[mike777]

If all cars have to go 100 mpg then they can be made with profits, since people need cars and will be willing to pay whatever it costs. But of course there will be a long transition period when car makers are having excess capacity while adjusting to people having fewer cars and old wrecks that presumably don't have to comply.

 

Anyway, I think it's an insane idea. Gas taxes are much more targeted and easier to implement.

I assume Al meant only new cars, new cars built in his country, not all cars have to go 100 mpg..only new cars built in his country with his central government.

 

I just do not see any proof that people will race to put their family's life savings into this scheme. :)

 

For instance I can still buy a used car or I can buy a truck or a motorcycle or simple not buy any car and keep my old one in good repair. In fact in the USA you can buy 3 wheel transport, that look like cars on the outside but are in fact legally motorcycles. :) Note how in a few seconds I found several other ways to get around town without buying this new expensive "car".

 

The free markets, assuming they are free, can simply say, we will put our limited amount of capital into other investments. If the government wants to sell this car, they can build it. :) The current owners of GM, F, and C can simply hand over the keys to the front door and say you build it.

 

OTOH if there is a profit in it. Al can put his money into it and own the company. :)

[Al_U_Card]

Imagine a time before cars. Imagine there was no petroleum. Electric cars would have been a viable option (versus coal-fired as they would be messy all round) and less of a problem for the environment (of course, the Americans would have built coal-fired plants to generate the electricity but...)

 

Had the "central government" in California not enacted such "onerous" legislation as they did in the last half of the previous century, the air in LA would be unbreathable. Did the car makers abandon that lucrative market?

 

C'mon Mike, specious bandying about of tired old tirades about commies etc.....pretty pathetic. We are talking new ideas and new approaches. The past is a failure as far as the future is concerned. Gotta get with the times.

[blackshoe]

Electric cars would have been a viable option

In "the time before cars"? Not a chance.

[helene_t]

Electric cars would have been a viable option

In "the time before cars"? Not a chance.

Well, the technology looked promising before the advent of the gas and diesel engines.

 

http://en.wikipedia.org/wiki/Electric_cars#History

[kenberg]

My last car purchase was in 2001, my first in 1954. Perhaps surprisingly, the basis for my choice hasn't changed all that much:

 

A. I have to be able to pay for it. Cash. I don't buy on credit.

B. It should be dependable.

C. It should not cost a lot for day to day driving.

 

 

In 1954, A and then C were dominant since I had little cash and I enjoyed taking engines apart. In 2001, B played a heavy role as well. Note that social responsibility did not make the top three concerns, nor did support for American industry. Both were taken into consideration, but the list I give was dominant.

 

In 2001 there were hybrids up for sale. I considered them. They were relatively new and I decided against getting one. Let someone else discover the bugs.

 

 

In seeing how the automotive industry came to its current bad health, I feel one thing more should be said. In 1990, I was in need of a car. I checked Consumer's Reports for data. Hondas looked good, the Taurus looked not horrible. I visited a Honda dealer and found what my options were. I also visited a Ford dealer near where I worked to check out the Taurus. I only had an hour or so, but I needed a car pronto and I had my checkbook in my pocket. The salesman went through his routine of running back to the manager to get me an even better deal and then the manager came out and spent a good part of the hour shoving papers in front of me that purported to show that at the price he was offering to sell he would be losing money on the sale. It was an old joke: "We sell so low we lose money on every sale" ; "How can you do that and stay in business?"; "Volume!". Time ran out, I had to get back to work, I bought a Honda. I don't know if salesmen in American car salesrooms are still acting like idiots but if they are it would be good if they would stop.

 

Anyway, I favor trying to save the car industry but I suggest very strong supervision over any money that we give or lend to them. There is very good reason not to trust those guys.

[luke warm]

I think they should just let them go bust. I can't believe Americans will stop buying cars, so someone else will take over the plants and do something with them. So most of the workers will keep in business, I think. Too bad that the shareholders lose their money but the government has bigger problems to think about (and to spend its non-existing money on).

i'm with you, helene... the GM CEO said something like "if we go down we take america with us" or something like that... i doubt it

Imagine a time before cars.  Imagine there was no petroleum.  Electric cars would have been a viable option (versus coal-fired as they would be messy all round) and less of a problem for the environment (of course, the Americans would have built coal-fired plants to generate the electricity but...)

 

Had the "central government" in California not enacted such "onerous" legislation as they did in the last half of the previous century, the air in LA would be unbreathable.  Did the car makers abandon that lucrative market? 

 

C'mon Mike, specious bandying about of tired old tirades about commies etc.....pretty pathetic.  We are talking new ideas and new approaches. The past is a failure as far as the future is concerned. Gotta get with the times.

his point is still valid... if the car you described could be built and sold for a profit, someone would do it... if the gov't mandates such a car and the companies refuse, then what?

[Al_U_Card]

My recollection of the threatening then the enactment of the stringent emission controls (in California at first) is that it was met with much wailing and tearing of hair by the big 3. It wasn't feasible, they would go bankrupt, the public wouldn't pay for it, etc.

 

Time told a different story. Where there is a public (political) will, there is an economic (profitable) way. The "free" market knows how to seek its own level and we must not let it sink to the lowest one available.

[Gerben42]

My last car purchase was in 2001, my first in 1954. Perhaps surprisingly, the basis for my choice hasn't changed all that much:

 

A. I have to be able to pay for it. Cash. I don't buy on credit.

 

Aha! Another bad citizen :)

[blackshoe]

Would that we had more such "bad citizens".

[mike777]

My recollection of the threatening then the enactment of the stringent emission controls (in California at first) is that it was met with much wailing and tearing of hair by the big 3. It wasn't feasible, they would go bankrupt, the public wouldn't pay for it, etc.

 

Time told a different story. Where there is a public (political) will, there is an economic (profitable) way.  The "free" market knows how to seek its own level and we must not let it sink to the lowest one available.

keep in mind...they(car companies) did go bankrupt and need a taxpayer bailout...and in fact CAlif is bankrupt....and many people..me...left california.

 

In fact the free capital markets did not RACE to give them money.

 

 

but no matter........if you put your own money in this car venture... no problem..if not.....silly....

[Al_U_Card]

but no matter........if you put your own money in this car venture... no problem..if not.....silly....

We already have, 17 billion of your tax dollars and 3.4 billion of ours....now, how many shares will we receive???

[Winstonm]

My recollection of the threatening then the enactment of the stringent emission controls (in California at first) is that it was met with much wailing and tearing of hair by the big 3. It wasn't feasible, they would go bankrupt, the public wouldn't pay for it, etc.

 

Time told a different story. Where there is a public (political) will, there is an economic (profitable) way.  The "free" market knows how to seek its own level and we must not let it sink to the lowest one available.

keep in mind...they(car companies) did go bankrupt and need a taxpayer bailout...and in fact CAlif is bankrupt....and many people..me...left california.

 

In fact the free capital markets did not RACE to give them money.

 

 

but no matter........if you put your own money in this car venture... no problem..if not.....silly....

Let me chime in with you guys. In my view, extremism in any form is wrong. Sorry, Chicago School.

 

Extreme laissez-faire has its own set of problems that Friedman, Strauss, and Ayn Rand ignored.

 

Extremism the other way is no better though.