Do Sales Merit An Auto Bailout?

[bowtieguy]

well, the poll is closed and the results are pretty much what i expected...

61% will not buy new
11% would buy new

now, it is QUITE remarkable that 88% will not buy new if more cars are not offered in the $10k range(some are, just VERY stripped).

no question that in the general public the % of new car buyers would be higher, but also no question(IMO) that GS members have more financial savvy than most. more intelligent? well, i'll leave that one alone(don't want to offend any guests to the site).

if these results were even remotely close in the general public, auto sales would never return to their former glory. THIS, i believe, is going to happen whether or not the US economy rebounds fully.

and that's why i'm against the bailout. consumers BETTER have learned a lesson: buy just enough car and house to suffice; and save for a rainy day, better known as financial hardship.

even so, look at the bank bailout. what are they(the banks) doing w/ the money? hoarding it!!!

so we're off to raise taxes to support what got us here in the first place. yippie!!!

[Snax]

My advice: Deal with banks as little as possible. The FDIC wasn't created just to make people feel good.

[bowtieguy]

yup, to the banks defense, i question the amount of loans being requested right now. i know i won't be borrowing anytime soon, barring catastophy of course.

[bowtieguy]

a larger bailout is looming: a financial/economic analyst from the UK was talking about the US stimulus plan today...

besides too much needless spending(pork, special interest, or what have you), his observation is that it does not contain enough help for the private sector.

he also said there is MUCH in the legislation that will stimulate NOTHING in regard to economic recovery. sounds familiar, which is the opposite of change.

when will we as a nation learn to throw out politics and do what's best for all? i fear never.

[Snax]

For every naysayer, I can find twice as many supporters. So what?

Here's the rub that the Republicans in power seem to not understand: Trickle down economics does not fuel an economy, it only drives a massive exodus of equity.

Conversely, many of the Democrats don't understand that putting money into the hands of folks who are inclined to spend nearly every dollar they earn fuels the economy for only a little while longer.

Frankly, I tend to agree that just putting people to work for a time at government sponsored jobs is unsustainable however, primarily due to trade imbalance and the value of the dollar. Rescuing our economy will depend far more on fixing trade than tax breaks or spending bills. Neither one of them will really solve anything in the long run, but rather allow the wealthy to hoarde their equity, and the lower to middle class to survive a bit longer until the real fix can be made.

It's a bandage solution to a country that has been slowly amputating appendages since the 80's.

Worse yet, our economy is not just currently based on fiat currency, but a relatively arbitrary one at that due to the massive personal debt people have accumulated. Wages simply have not kept pace with inflation of subsistence level goods, and people have been afforded debt that should not have been - based on a similarly arbitrary FICO score which takes absolutely no account for a person's income. This has allowed millions of people to run up debt far beyond their means to pay back, and that house of cards is starting to collapse in a huge way.

This legislature's largest failing on this jobs/stimulus bill is in not going far enough. Things like tax cuts for corporations that produce domestic products and employ citizens (not H1B imports), and levies on corporations that outsource their labor to places where wages are below what they would have to pay here. We also need adjustments to dividend taxation to match the actual income tax level on wages, and securities trading taxes of a miniscule amount to encourage the longer holding of sound securities. And above all, we have absolutely NO HOPE of ever being competitive with foreign auto manufacturers without taking the burden of providing health insurance off of the automakers.

In so many ways, the domestic manufacturing industry simply has the deck stacked against it, it is no wonder that our economy is going down fast. We aren't even CLOSE to the bottom. Until those things above are fixed, you better batten down the checkbook and buy some gold if you have much to protect. It's going to get ugly.

[R.I.D.E.]

The US is the largest holder of wealth in the history of this planet. You seem to like to trash the rich.

Define rich?

I checked and my wife and I are in the top 13% of families as far as net worth, at about 700k. I am disabled, but not bad enough to draw any assistance whatsoever from any govt entity. I have a pitiful SS retirement that will come in 2012.

I have no intention of investing in an economy when the rules are dictated by idiot politicians, Republican or Democrat. The pocketbook has been controlled by Democrats for the last two years, in case you forgot.

Spending our way out of a recession, scare tactics using the word depression. Jesus people, the last 8 years have been very good for me and many I know. I know a lot more people who have scrimped and saved until they died at 75 plus, and that is the heart of this system. There is plenty of money in the hands of people who would love to invest it, but with the potential for 10+% inflation, what fool would put 200k in a 4% CD for 5 years, only to find his principle wass worth half its original amount.

My income for the rest of my life depends on making the right decisions in the next couple of years. I don't have a nice COLA'ed retirement like many I know.

God help us if things slow down from the hyped govt instigated "boom" economy that we are now suffering the mother of all hangovers from.

What got us here was vote buying, lying loan salespeople who advised people to break the rules, politicians buying votes with money they didn,t have to spend.

I learned to work hard, manual labor in trades that were recession proof and even depression proof. Now I watch as Washington decides to risk my financial future in an admitted 70% gamble to "fix" what they broke to begin with. Their odds of success are much worse than their own predictions, probably 100 to 1 against.

Lethargy, lack of work ethic, the perception of honesty as a weakness. My handshake was always as good as any written contract.

Here is the rub most DEMOCRATS don't understand. The rules haven't changed in 200 years or in 2000 years. The land of opportunity has become the land of entitlements, the land of "What's in it for me". The land of a lie is justified if it is profitable, or gets me on the dole so I can sit on my behind and do nothing.

One of the most amazing things I have ever seen in my time on this planet was a young black man who was blind. He learned to walk down a street and make a clicking noise and he could see by listening to the sounds bouncing of of objects, like a bat.

That determination to succeed is lost in this new society, he should be beging for a handout and sitting at home feeling sorry for himself.

Sure a lot of liquidity has been sucked out of the economic power of this country, but the old hands, like me, are not short term players.

We bought a new car in January, wrote a check for it. Lived below out means for the first decade of our marriage, and only went in debt when we knew the return on the money would be a hell of a lot better than any piddling 4%.

Your lords in Washington are lending money to the banks at 11%, and if they fail that money is gone.

Why don't the imbeciles give me 11% on my money and guarantee the return. You would see more damn money flowing than you could ever imagine, probably 20 trillion dollars.

regards
gary

[Snax]

'The Rich' in this country that are the target of most of my ranting are the top 1%. Those who earn more than the net worth of the top 13% in a single month off of nothing more than dividends - even if those dividends are at the expense of corporations selling out their future success.

The only thing I disagree with in your post is the point about the rules. Not the basic rule that debt is a trap, but rather the aspects of life that drive people into it - and how the top 1% have relentlessly worked to that end.

[bowtieguy]

Snax,

florida, for one, depends on the trickle down.

good point about gov't jobs and trade.

personal debt? PRECISELY why i'm against taxing(more) me or the rich to subsidise bailout spending on illadvised purchases. and that goes for lifetime welfare recipients as well!

you want to fix our healthcare issues? educate and give tax credits for eating right, exercising, and getting OFF prescription drugs. oh, yea, almost forgot the pharm industry is in the pockets of our politcians. BTW, www.mercola.com is a fantastic place to start for anyone that wants to maximize their quality of life.(NOT an ad, just FYI).

[bowtieguy]

Originally Posted by R.I.D.E.

The pocketbook has been controlled by Democrats for the last two years, in case you forgot.

Spending our way out of a recession, scare tactics using the word depression...the last 8 years have been very good for me and many I know.

What got us here was vote buying, lying loan salespeople who advised people to break the rules, politicians buying votes with money they didn,t have to spend.

Here is the rub most DEMOCRATS don't understand. The rules haven't changed in 200 years or in 2000 years. The land of opportunity has become the land of entitlements, the land of "What's in it for me". The land of a lie is justified if it is profitable, or gets me on the dole so I can sit on my behind and do nothing.

super post!

the past 2 years of broken promises BTW.

scare tactics is what the other side was accused of. good point. the last 8 years were VERY good for us as well.

biggest buying of votes in history!

remember JFK's famous quote? it's all about what this country can do for me!

[Snax]

I'd just like to make this one non-partisan point, regardless of what one considers the solution or the cause of getting us here: We are in a recession now, but it will become an outright depression very soon.

Things to consider in support of that statement are:

• The Bush administration stopped reporting jobless figures for those who have either given up looking for work or have accepted part time labor instead, often at reduced wages. Ergo, the real rate of unemployment as it used to be measured before GW is nearly double the currently reported number.
• Families are having to rely on two wage earners to maintain the same standard of living that one wage earner could support before.
• Easy credit has destroyed the net worth of the majority of our citizens and imperilled them to be entrapped for a very long time in their debt - unless they resort to the extraordinary means of filing for bankruptcy and or allowing foreclosure.

Think about this seriously. There are literally millions of homeowners out there who can continue to pay their mortgages, just barely, with little or negative equity, struggling to pay other bills, who are in a win-win position to allow foreclosure. Their credit is already hosed. They can't afford to pay for emergencies. And "The Mortgage Forgiveness Debt Relief Act and Debt Cancellation" of 2007 allows people to walk away without owing a deficiency in most cases where non-judicial foreclosure is the norm. (Which it is in most places.)

So in those areas where people can walk away without penalty to nothing more than their credit, there is about to be an exodus from home ownership, even greater hits to the balance sheet of the banks, and millions more laid off in the process of all this crap hitting the fan at the same time.

This is the 'perfect storm' and most of us are sitting in downtown New Orleans financially. Be prepared.