Comments on: Why the U.S. Automaker Bailout is a VERY bad idea… http://www.icekreamkoan.com/2008/12/10/why-the-us-automaker-bailout-is-a-very-bad-idea/ Flying and other stuff - Peter Braswell Fri, 13 Aug 2010 22:27:30 -0700 hourly 1 http://wordpress.org/?v=3.0.1 By: glasnost http://www.icekreamkoan.com/2008/12/10/why-the-us-automaker-bailout-is-a-very-bad-idea/comment-page-1/#comment-1555 glasnost Fri, 19 Mar 2010 23:40:09 +0000 http://www.icekreamkoan.com/?p=154#comment-1555 Well Done! I Like it! Well Done! I Like it!

]]> By: David Dorf http://www.icekreamkoan.com/2008/12/10/why-the-us-automaker-bailout-is-a-very-bad-idea/comment-page-1/#comment-1486 David Dorf Fri, 09 Jan 2009 19:18:54 +0000 http://www.icekreamkoan.com/?p=154#comment-1486 I agree with some of your comments, like using taxes to keep gas prices high, as they often do in Europe. But only if those taxes are used to subsidize mass transit and other solutions for lessening our dependence on oil. I don't want that additional revenue going to pork-barrel projects. But I disagree with your take regarding CAFE. Your comments imply that CAFE standards impose hardships on the big-three when in fact they are applied equally to all car manufacturers. Laws and regulations, when applied to all competitors, are a good thing. Free-market only works when guard-rails are put in place. Lastly, the big-three have two burdens that continue to hinder their success. First, they still wear the stigma of bad quality from the '70s and '80s. It takes time to wash that off. Second, they must bear the ongoing cost of the ridiculous benefits they pay their retired workers. I think their current labor costs are in the ball park of Toyota and Honda, but the cost of past workers eats into profits. Overall, I'm against the bailout because I think it just defers the inevitable at a substantial cost to taxpayers. But I understand why it was done, and can't complain about the motivations. I agree with some of your comments, like using taxes to keep gas prices high, as they often do in Europe. But only if those taxes are used to subsidize mass transit and other solutions for lessening our dependence on oil. I don’t want that additional revenue going to pork-barrel projects.

But I disagree with your take regarding CAFE. Your comments imply that CAFE standards impose hardships on the big-three when in fact they are applied equally to all car manufacturers. Laws and regulations, when applied to all competitors, are a good thing. Free-market only works when guard-rails are put in place.

Lastly, the big-three have two burdens that continue to hinder their success. First, they still wear the stigma of bad quality from the ’70s and ’80s. It takes time to wash that off. Second, they must bear the ongoing cost of the ridiculous benefits they pay their retired workers. I think their current labor costs are in the ball park of Toyota and Honda, but the cost of past workers eats into profits.

Overall, I’m against the bailout because I think it just defers the inevitable at a substantial cost to taxpayers. But I understand why it was done, and can’t complain about the motivations.

]]>