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wtfwasithinking

Auto Bailout

I’m sitting here listening to some “experts” debate a potential Big 3 auto bailout. Here’s why we need to nix this whole idea and let the chips fall where they may.

I’m in my mid-thirties. For as long as I can remember, I’ve had a negative opinion of American cars. Not because they were American. That’d be silly. It’s because they suck. I remember my father agonizing over the decision to buy our first Japanese car: a 1982 Honda Accord. I also remember that after we bought it, we loved it. We’d say, “is it running?” after we turned it on, because it ran so quiet. It was fuel-efficient, problem-free, and cheap to maintain. You know what my family has done ever since 1982? We’ve bought Hondas. Too many to recall. In the mid-nineties I had a Ford Explorer for a few years. It’s the only car I’ve ever driven that I didn’t like. It’s also the only American car I’ve ever owned.

I’ve got 2 Hondas in my driveway right now. One has 114K miles and one has 175K miles on it. They both run like champs. I change the oil, keep up with regular maintenance and they reward me with reliability. They’re both paid for. I feel like I’ve gotten great value out of these cars.

So, when the Big 3 tell us their big plan is to release a hybrid electric in 2010, when the Japanese automakers are already there, it just reinforces my negative opinions. They tell us to give them tens of billions to play catch-up. No thanks. They’ve had close to 30 years to play catch-up and they’ve done nothing but fall farther behind. Releasing a hybrid vehicle in 2010 is going to do nothing to change my opinion. If the Big 3 can survive and make reliable cars for a number of years, then my opinion will change. But a single car just ain’t gonna do it.

Now, I do feel for the many people who would lose their job if the Big 3 collapsed. But, you know what? Nobody gets a job for life. Nobody gets to rest on their laurels. In my business (software development) if you rest on your laurels for even a couple months you’re gonna get burned. These people can expand their skillset. I’m sure they’ll get nice payouts that give them a cushion. Those that take advantage of that time to improve themselves will be fine. Those that sit on their ass waiting for a job just like the one they had are not going to be fine. I’ve been laid off. It sucks, but you get resourceful and you bounce back. That’s the American way.

Filed under  //   bailout   rants  
Posted December 2, 2008
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A regular joe on the banking crisis

My response to the 9/26/08 edition of John Mauldin’s frontlinethoughts.com, which was sent to me via email. I’d link to the article directly, but apparently Mauldin doesn’t just put content online like a good web citizen would. You have to subscribe to his email newsletter for that. Whatever.

Mauldin makes a lot of points that I don’t have the expertise to diagnose as accurate or inaccurate. And therein lies the problem. Very few people, including those within the financial industry, seem to know what the hell is going on. Every financial analyst gives you his theory, but you start to see a pattern when people like Jim Cramer are right about some things (we’re gonna have a huge mess on our hands) but wrong about others (Wachovia is in good shape). If these experts don’t know what’s up, then who does? Who do I believe? Who do I trust? Is Mauldin right that we have to save the banking industry from itself? Or is Ron Paul right that we let them go into bankruptcy, let the investors take the loss, and keep the dollar from collapsing? All these people are grandstanding and claiming they’re right, yet none of them agree. It all seems like a bunch of self-preservation to me. Which is exactly how not to lead people.

This whole thing happened within a shadow financial system (hedge funds and all) that sprung up, was never regulated, and has now apparently died, all within the space of 20 or so years. It’s the same kind of opaqueness and greed that led to the quick ascendency and ultimate utter failure of Enron, Arthur Andersen, et al. It’s rich people playing games behind closed doors. But the recurring pattern is that the game players get filthy rich and the regular joes of this country just get gamed. Did Enron execs take the hit? Hell no. They gamed themselves enough money to last many lifetimes. But the worker bees who were encouraged to put their meager life savings into Enron stock sure got screwed.

So, regular people are starting to put two and two together. They see the Enron debacle that made a few people very rich, then failed. They see a war that we were urged to support based on what we now know was at best gross misinformation and at worst a pack of lies. And now they see a banking and finance industry that somehow managed to squander away billions of dollars while the executives led platinum-card lifestyles. Hell, even Mauldin, in this article, ends up by telling us how he’s jetsetting all over the world as soon as he gets done telling us he’s the one we should really trust.

I could go on forever about this, but here’s the thing: regular citizens no longer trust the corporate executives and politicians that are running this country. (And I level that criticism at both parties.) They’re fed up and for good reason. They see that wealth is polarized more so than it’s ever been. They know that they’ve gotten lied to and screwed a couple too many times. And it’s about damn time that to draw the line. If this turns out bad for everyone, so be it. But for once it’d be nice to see the truly rich in this country bear some of the burden.

Filed under  //   bailout   rants  
Posted September 29, 2008
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