Dirty little secret... sh-h-h-h-h!

[Steve A.]

The national debt keeps getting larger and larger, by huge leaps and bounds, which brings up the question "How are we ever going to pay it off?"

The answer is quite simple: print more money. Whenever you bring that up there is always a Pavlovian response "but look what happened to Germany in the 1920's!"

But the question we need to ask is who would suffer the most if our dollar was devalued considerably. If I owe $100,000 on the mortgage for my house and it is suddenly worth twice as much as it was before (because of the devaluation of the dollar) am I not making out like a bandit? Woohoo! For those of us struggling to get by, the devaluation of the dollar might not be that bad: "when you don't have nothing, you have nothing to lose."

But for those people who are obscenely wealthy- their millions and their billions are going to be worth a lot less. We don't have to rob the rich people to spread the wealth to the poor- we can let devaluation do the job for us!

Of course the people with money who run our country do not want us to figure this out so they try to keep it as... their dirty little secret! Plan ahead now and get a wheelbarrow while you still can for bringing your money to the store to buy a loaf of bread. But remember- as much as the devaluation and rampant inflation is hurting you, it is hurting the rich people even more!

Steve Ahola

P.S. If someone can punch holes in the logic of this argument- great! I think it is sad that I am wishing doom upon our rich brethren to bail us out of these economic problems but isn't that why God put them on earth? Besides, under my plan we would be rewarded for pissing our money off buying guitars and amps and effects. It would be the people who scrimped and saved who would be punished. The story of the Grasshopper and The Ant- with a 21st century twist to the ending...

[Chuck H]

The only trouble I can see in your logic is that if the rich suddenly find the need to hang on to their money they won't put any of it back into the community. Example:

I am a painting contractor. If Mr. Gotrocks is pinching so tight that Honest Abe starts squealing he's certainly going to let that paint job go for another few years. If everyone who could afford a paint job before devaluation does this there will be fewer paintjobs being done and/or these jobs will have to be done cheaper but with higher materials cost. Such an economy simply won't support the number of painters it use to. So I lose my job and end up pushing a shopping cart with all my $h!t in it or at best I get to wear a paper hat.

Same goes for tech jobs and crossover jobs like amplifier repair. More tech jobs will be shopped overseas and amp repair shops will have stiff competition from leftover, out of work souls just trying to scratch out a living. I know this for sure because I lived in the Silicon Valley through the dotcom crash. All these out of work guys who did a little painting in college started popping up in spades to under bid me on jobs.

Let's devalue a quart of milk. You start with 4 glasses. But then 4 more people show up. Now 8 people get a half glass. If anyone else comes over we're all going to starve.

And what good is double value on your home if no one can afford to buy it? The banks won't give anyone a loan and your house just sits there in dire need of a paintjob. Eventually property values decrease but the dollar fails to increase and then your broke too.

In such an economy if Mr. Gotrocks is broke it means he can't afford to go on vacation this year. If I'm broke it means I have to do without luxuries like food, heat and medical insurance for my family.

Chuck

[Steve A.]

Originally Posted by Chuck H

The only trouble I can see in your logic is that if the rich suddenly find the need to hang on to their money they won't put any of it back into the community...

Isn't that exactly what is happening right now- but without the massive devaluation of the dollar that I proposed as the cleansing fire from above to clean out the sin and iniquity in our society? (Or did I not mention the part about the "cleansing fire" in my earlier post? )

Actually the dollar has been devalued continually but on a more gradual basis ever since we moved on from the silver certificates: there is nothing backing our money other than the good word of the government. (Cough! Cough!) And I do believe that I read in the news that the Treasury Department has been cranking out even more money 24/7 ever since the $700 billion bailout was approved.

In the past 8 years since the "tax'n'spend" Democrats were ousted from the White House, the national debt has grown from 5.7 trillion dollars in September 2000 to $10,661,685,679,194.57 as of today November 30, 2008, which works out to $34,934.79 per man, woman and child.

Do you actually see a way of paying off that debt other than printing more money? Please share it with us!

Yes, I think I did exaggerate my point a bit but I do think that devaluation is not quite as bad as everyone would have us believe... with your money in a wheelbarrow it's not like you'd have to remember where you put your wallet!

Thanks for replying!

Steve Ahola

[Chuck H]

Originally Posted by Steve A.

Actually the dollar has been devalued continually but on a more gradual basis ever since we moved on from the silver certificates: there is nothing backing our money other than the good word of the government. (Cough! Cough!) And I do believe that I read in the news that the Treasury Department has been cranking out even more money 24/7 ever since the $700 billion bailout was approved.

I noticed. And haven't you noticed some of what I told above comming to be. The banks are beginning to foreclose on these "no interest" loans, just as they suspected they would from the start, but they didn't expect property values to be THIS low. Some are going under. Top that off with Uncle Sam (brother of Uncle Simeon) taking full control of the most powerful lending institutions. I don't like to think where it's all going.

Originally Posted by Steve A.

Do you actually see a way of paying off that debt other than printing more money? Please share it with us!

No I don't. But I don't think printing more $$$ is the answer. Better would be to simply say "We're not paying it." Let's just stiff our foriegn lenders and forgive whatever we owe ourselves. "What?!? You wanna fight about it?" Crappy I know. But it could work.

Seriously though, we could start by ammending the crap out of NAFTA and get some labor going back in our own country. Let's tax imports so they cost the same as domestic products. Let's face it. I don't want to pay $300. for a DVD player or $2. for a box of thumb tacks. But I will. Because I don't want to live in China or work a ten hour day for a bag of rice and a fish head. This can only lead to better things, and eventually more moderate price structures for all goods and services. We could use the extra taxes on imports to pay down the debt. And FWIW it's mostly corporate america that will pay those taxes. These fat cats getting rich by selling imported crap. Mo chepa mo betta. You like you buy. Let's make it so companies of this mind aren't making the same profits they have been. That'll distribute the wealth a bit. Make it so corporate america is just as well off to hire american contracts and labor. That would be a place to start.

The question shouldn't be "How can we pay the national debt?" As if we just got the bill and need to pay it. It should be how can we strengthen our economy. I carry plenty of personal debt. I am not expecting a bag of $$$ to fall out of the sky so I can pay it off. Nor do I think the lenders will accept Monopoly $$$. Which is the equivelent of simply printing more $$$. But if I can improve my personal income and budget carefully I may be able to chip away at it. Simply not going further into debt would be a step in the right direction. Though I must admit that if I thought I could simply print some money and pay off my debts I would be tempted. I'd probably do it if I KNEW I could get away with it

Chuck

[hasserl]

Wow, some wacky economics going on here.

[Steve A.]

Originally Posted by hasserl

Wow, some wacky economics going on here.

Yeah, if you thought that my politics were strange most people think that my economic theories are even weirder... maybe I better not mention my religion!

Steve Ahola

[Steve A.]

Originally Posted by Chuck H

... Though I must admit that if I thought I could simply print some money and pay off my debts I would be tempted. I'd probably do it if I KNEW I could get away with it

Those new color laserjets do a great job of printing out bills- I figure that if it is legal for the government to print money, it should be legal for me to do it, too. What is good for the goose is good for the gander...

It seems that whenever money is needed for social programs to improve the lives of people less fortunate than ourselves, the cupboard is bare. But for funding a war or bailing out their buddies on Wall Street, no problem- how much do you want- do you have change for a trillion dollar bill? Its like one of those trendy nightclubs where only the cool people are admitted- everyone else is turned away.

Let's just stiff our foreign lenders and forgive whatever we owe ourselves.

Well, that's even better than my suggestion because I won't have to go out and get a wheelbarrow! And of course it is the rich people getting the shaft for a change since they are the ones that we generally owe the money to.

I believe that accumulated wealth is a recent development in the evolution of mankind from the cave dwellers of prehistoric times. How many bear skins did one person really need? I believe that there have always been people seeking power, but that was not the same as wealth back then. I think that power was defined by the size of your club...

Steve Ahola

[Enzo]

Steve, there are so many holes in that it almost isn;t even a "that."

YOur idea that the rich people with billions of dollars will lose it all is silly. When the value of a dollar drops, people turn their dollars into other things - like gold for example. Then they buy a million dollars worth of gold, and when the dollar bottoms out at 1 cent worth, they sell the gold for $100 million and have exactly the same wealth they had before. You on the other hand, lacking the wealth to convert, are stuck with the same income and assets whose appreciation will not hardly keep up with the inflation, so you will now be spending $16.90 for a loaf of bread instead of $1.69.

And there are inflation tracking investments, even US bonds, are they still selling I-bonds? Plenty of ways to convert cash to some other durable investment.

Your house will be worth less ON THE GLOBAL MARKET because the dollar is worth less, but the dollar amount will be the same. SO a guy from Japan could buy it for half what it was before in Yen, But here, dollars are dollars. Your $100,000 house will still be worth $100,000, and your taxes will still be what they were in dollars. It just won;t be worth the same in EUros or Yen as before. Are you expecting your income to turn into millions because the decimal points are moving? Ask your employer how often he changes your wages based on international currency exchange rates. And chances are your taxes will go up, since the local government will be paying ten times what it did before for everything.

The whole printing money thing is missing the larger picture. How many of us take our income in cash? How many make our payments in cash? Most of the "money" in this country is not cash. You get a paycheck that deposits in the bank, from that you write checks to the local utilities and other creditors. or you arrange EFT payments - same difference. (I mostly use EFT anymore - I only write checks to suppliers like Peavey or Fender, my business rent, and one of the phone companies) Ever use credit cards? There is more cashless cash. Printing more bills doesn't change that. Most of the money in this land never gets folded in a pocket. DO you hand over the rent or mortgage in cash? Car payment. When I pay my dentist $1500 for a crown, I don;t count out a pile of $100s.

But how does printing extra cash help you even in your plan? The government could print tons more cash. You expect them to mail you a big box full once a month? How are YOU expecting to get all these more dollars? Giant raise at work? Or will you charge ten times more for your amp work? OF course the stuff you have to buy for amp work will have gone way up as well. SO 30% profit or whatever you enjoy now would be more or less the same, jist results in a larger number of dollars, but then, so does everything else.

Who would suffer most? You would. As to dollar collapses, anything we import becomes that much more expensive. When oil was $140 a barrel, if the dollar would have been worth half as much, then we would be paying $280 a barrel. I sometimes buy grapes at the grocery store. I can buy them in the dead of winter for maybe $2 a pound. Half rate dollars makes that $4 a pound, because around here winter grapes come from South America. Look at the clothes you wear. What tiny percentage of them are made in America? All that will go up. Tubes, capacitors, resistors? Halve the dollar, double the cost of those, they're imported.

WE will see an increase in exports as our goods become cheaper on the world market, so corn. wheat, soybeans would increase exports. Perhaps iron ore and lumber, maybe coal. What manufactured goods do we export in any volume? Of top of my head, can't think of something. I know we do though. Those would increase. But when we send iron to Japan, the goods it turns into to come back will cost a lot more. We send lumber to Canada and buy the resulting plywood in return, but that plywood will go way up. They bought the wood in US dollars but sell the plywood in (now worth more) Canadian dollars.

Do I see a way to pay off the huge national debt? Hard to say, but without getting into who should get the credit or blame and all that, during the CLinton years we were running a surplus on the annual budget. We can't take a snap shot of today and define th world with it.


And what was the last "all we have to do..." solution to a serious problem that actually worked out?

All we have to do is "make" the gas stations sell gas for 50 cents, and then...

[Enzo]

How many bear skins did one person really need?

Yep, everyone should take only as they need, and produce as much as they can.

That was the communist manifesto, read up on it. How well did that work out.

[Steve A.]

Originally Posted by Enzo

Yep, everyone should take only as they need, and produce as much as they can.

That was the communist manifesto, read up on it. How well did that work out.

The fact that the communist manifesto did not work in Russia, China or Cuba does not really prove anything. And the US has been moving towards the tenets of communism and socialism ever since the New Deal, and I believe that it has made this country a better place to live in.

Okay so you don't like the idea of devaluing the dollar- how about the humorous suggestion of stiffing everybody for the money that we owe them? Or we could print up a bunch of these to give to them:

http://en.wikipedia.org/wiki/Image:U...illobverse.jpg

Steve Ahola

[Enzo]

the US has been moving towards the tenets of communism and socialism ever since the New Deal

Only around the edges. Communism is where the state owns. Just how many industries - better said, what percentage of industry/commerce is owned by the state in the USA? Damned little. Does it regulate it, in many places yes, but it doesn;t own it. And state used to tolerate certain monopolies as public utilities, but those went away. Remember breaking up AT&T? Instead of THE power company we now have "competing" power companies. Same power, just different companies trying to market it to you. Others want to go further and break it down to power generating companies who sell to power providers who them market the power to consumers. That all is going away from socialism, not towards.

We do like some socialist things like a national highway system, a national food inspection system, a national air traffic control system. We even have a national electrical code.

Social security is there as a small income for those who find themselves old with no income so they don;t wind up on the street. And while some do use it is a retirement plan, that is not what it is. REmember not long ago when they were fighting to privatize that into stock market investments? Good thing they didn't it turns out, at least in the short run. That effort is also away from socialism.

Having said all that, I am not an anti-socialism ranter. I think we are measured by how we treat the less fortunate among us.

The fact that the communist manifesto did not work in Russia, China or Cuba does not really prove anything.

You're right, it proves nothing. But can you cite any examples of a command economy that DID work? Russia collapsed of its own weight. CHina finds themselves growing in leaps and bounds as they embrace a more western economic model and drift away from communism. CUba isn't a good example of most anything. between Castro and the US being pig headed, nothing good was going to come of it down there. Once Castro is dead, and lacking a right wing dominated Washington, I think CUba may still have a bright future. (Look at the difference between Haiti and the DOminican Republic on the same hunk of real estate. Only diffference is the government.)

Defaulting on our obligations doesn't stike me as a very effective approach. We need to borrow money from the rest of the world every day to continue on. As soon as we start defaulting, that stops immediately. if we could be self sufficient somehow, then those lenders might not be so critical, but we have no plan in place to assume such a posture.

[Steve A.]

It seems like the consensus here is that the national debt is not an issue so I guess that it can't be used an excuse when it becomes necessary for the government to bail out those people who have lost their job and their home through no fault of their own. The government used to provide a safety net so that people would not starve to death or die homeless in the streets. I believe that it was in 1996 that they put time limits on many of those programs, to encourage those people on welfare to go out and get a job. In California if you are mentally ill or otherwise disabled you can get some money from the SSI program, but I don't believe that there is any sustained assistance for people able to work other than food stamps.

Even before the current problems began, there has always been a shortage of jobs- it is like musical chairs and there is not a "chair" for everyone. I have always been of the opinion that the government should create some kind of job so that everyone who wants to work can work. In California there is the state conservation corps, but that is only for people aged 18 to 23.

There is really no telling how bad things will get before they start to get better again. I happened to end up in a pretty good place myself so I can't complain but I really feel sorry for the people who have lost their jobs or will lose their jobs. Or their homes.

In any case, with the Federal government bailing out the banks and so many other companies on Wall Street they will have a hard time explaining why they cannot provide a safety net for those people who really need it to survive. Or have they all received a death sentence from the people who ran Wall Street into the ground (not that I am naming any names or any parties- I think that practically everyone had a finger in that pie!)

Steve Ahola

[Chuck H]

I just want to say for the record that my notion of stiffing our debtors as a solution was a joke that I never took seriously. If I'm going to be quoted I don't want my intentions to be out of context.

And FWIW I don't think the prosperity we enjoyed during the Clinton years was because of any governing agency whatever. There were alot more social and cultural influences. So in case anyone ever thought the dot com/ information tech industries could have sustained if we had kept a Democrat in office, I'm here to tell you otherwise. If you just want to show stats I suppose you can present it any way you want. But if we keep it real I think we all know that our economy during the Clinton years had little to do with his presidency. In fact the signs were all pointing in the wrong direction before Clinton was halfway through his second term. NAFTA was the final nail in that coffin. And that was all Bill.

Also for the record, I'm not a Republican. I just call 'em like I see 'em.

Chuck

[Steve A.]

Originally Posted by Chuck H

I just want to say for the record that my notion of stiffing our debtors as a solution was a joke that I never took seriously. If I'm going to be quoted I don't want my intentions to be out of context.

You were kidding? I thought that it was a great idea... I edited my post to remove your name and to indicate that the idea was suggested in jest. My apologies for assuming that you were being serious...

And FWIW I don't think the prosperity we enjoyed during the Clinton years was because of any governing agency whatever. There were alot more social and cultural influences. So in case anyone ever thought the dot com/ information tech industries could have sustained if we had kept a Democrat in office, I'm here to tell you otherwise. If you just want to show stats I suppose you can present it any way you want. But if we keep it real I think we all know that our economy during the Clinton years had little to do with his presidency. In fact the signs were all pointing in the wrong direction before Clinton was halfway through his second term. NAFTA was the final nail in that coffin. And that was all Bill.

Also for the record, I'm not a Republican. I just call 'em like I see 'em.

Chuck

I agree with all of that- the financial state of our nation is largely like the weather: it is what it is. For a president to take credit for, say, economic expansion would be like taking credit for having enough rain to end a drought.

As for NAFTA (or Tratado de Libre Comercio de América del Norte, as we like to call it here in Upper Mexico, er, California) it was originally promoted by President H.W. Bush although as you suggest it was Slick Willie who pushed it through Congress.

FWIW a lot of people have been blaming the Community Reinvestment Act for the whole mortgage meltdown. I would really like to see figures on that because most of the poor people I know work 4 or 5 jobs between them because they are proud that they own their own home. It seems to me that it was the middle-class people who kept refinancing their mortgages to squeeze out all of the equity that have contributed more to the problem than the poor people who were helped by the Community Reinvestment Act.

If I was to point my finger at one thing as being the main cause for the whole economic melt-down it would be excessive executive compensation and the whole culture that encouraged that...

Steve Ahola

[Enzo]

That is why I said I wasn't going to get into who was to blame or credit. The point was that during the CLinton era -FOR WHATEVER REASON - we ran in the black. I specifically said I was not assigning credit or blame. It was just at the time he was in office. SO taking a snap shot of today ignores that things change. Because we run a trillion dollar deficit today doesn;t mean that is permanently the case.

SOme middle class people for sure overborrowed. Unfortunately the banks lent to them. It takes two to tango. People making 25,000 a year shouldn't expect mortgages on $500,000 homes. Likewise banks should not be lending mortgages that take 75% of a persons income to pay. In a less greedy time, the banks were not willing to take such risks. All it takes is an economic downturn, and those people find themselves unable to make the payments.


They like to put time limits on welfare because there will always be a story in the news of a welfare Cadillac or somebody gaming the system. There are indeed third generation welfare families. Or someone sells his food stamps to buy drugs. The public fixates on those stories as if they were typical, and the news media sell them daily. But those stories are exceptions, a very small percentage. Here in Michigan, the average stay on welfare is less than two years. You get a million people on welfare, and 1000 of them is a very small percentage, but in the news, you come up with 1000 cheaters on a list it looks huge. Do we want 1000 cheaters? No, of course not. But do we then make life harder for 1000 times that many just to beat them? I don't.

Steve, if you like the idea of the state making jobs, conservation corps or whatever, then you should like Obama's proposal to invest heavily in the infrastructure and the nation at large.

If I was to point my finger at one thing as being the main cause for the whole economic melt-down it would be excessive executive compensation and the whole culture that encouraged that...

That is interesting, I hear it a lot here in town, Lansing being a large General Motors plant town. Let us say they pay the CEO $100 million a year while losing $6 billiion a year. How would their books look if the guy worked for one dollar?

[madialex]

I agree with all the posters here on a lot of their points. Great discussion, thanks!

Personally I think that the NAFTA thing should be taken away, don't give these companies an option to move jobs over seas then import the stuff back at an even higher price to the buyer while some guy works for said company for peanuts. Tax the ass off them for their imports and like one poster here said, make it so it costs just as much to move away and send it back.

Secondly, and I hope this doesn't offend anyone in a union, I was once and I saw both sides. Unions used in the ways they are used today are the partial problem to companies like the big 3 auto makers. It's no wonder it costs them over 40 bucks an hour to produce 1 car while Toyota's, Honda's etc.. can make cars for a lot less, even the ones being built here costs less to build than American made unionized ones.

The way I see it, if a plant is getting ready to go down the tubes due to costs, why the hell wouldn't the workers who will lose those jobs say wait just a minute, I'd rather take a cut in pay and keep my job rather than let the union say we wont budge and everyone end up without a job. I just don't get the unions these days.. Of course I also don't expect an employee to take cuts and the upper management fat cats keep what they have either.. I am not for coperate America don't get me wrong, it's just a lot of things everyone in America needs to change...

[Enzo]

If you have ever spent time in a plant town you'd know, the absolute LAST thing they think is "I'd rather make less but keep my job." They will go on strike and stay out until either the plant OKs a raise or goes under. Plenty of places here in mid-Michigan that struck (striked?) themselves out of jobs.

And when the plant closes, they thoroughly expect to find new jobs at the same exagerated pay scales.

[madialex]

Originally Posted by Enzo

If you have ever spent time in a plant town you'd know, the absolute LAST thing they think is "I'd rather make less but keep my job." They will go on strike and stay out until either the plant OKs a raise or goes under. Plenty of places here in mid-Michigan that struck (striked?) themselves out of jobs.

And when the plant closes, they thoroughly expect to find new jobs at the same exagerated pay scales.

yEP, SPENT MOST OF MY LIFE IN A FACTORY TOWN, EVEN WORKED AT A FEW. lAST ONE WAS gOODYEAR TIRE AND RUBBER PLANT. wE MADE HEAVY TRUCK AND AIRCRAFT TIRES. wAS IN THE UNION THERE, NOT BY CHOICE i MIGHT ADD. wAS TOLD BY OTHER PEOPLE THERE THAT IF I DIDNT JOIN THE UNION i WOULD BE HARRASED OR THREATENED DAILY. Crap, caps lock was on, sorry not yelling... I just visited there last weekend and from what i'm told they are working a week and off a week and that the plant may shut down completely after Christmas and the union just negotiated a new contract last year for more money and more retirement and were striking for a while... Ha, what will they do with no jobs at all. That was the only high paying factory job there, all the textile mills went to mexico. So far there have been about 15,000 jobs lost in the last 5 years or so and if Goodyear goes under there will be another 3800 to 4000 jobs gone.. I bet they will then sit back and wish they made half of what they were making and be happy about it.

I personally feel those people who bought houses knowing that in 2 years the rate would go way up and they could not afford such a home should lose their houses. On the other hand the preditors that did the shady lending knowing they were not being up front with people and knowing they would be getting the homes back after the owners could not pay and then re-selling them againg should all go to jail.

This whole thing is a big ass mess and we, the average Joes of america are once again left to pay for the most wealthy people in Americas mess ups... That pisses me off to no end.

Now to the auto makers, they should not be bailed out nor should we have bailed out wall street. Why should we pay for their screw up? 99% of their problems are mis management and unionized work force gutting the Company. I have no problem buying a Honda and I drive one now. It is an 87 Accord, all i have ever had to do to it is put in a fuel pump. The thing as great on gas, have never even had an alignment done and tires last until they dry rot with little wear. Has any American maker built a car like this? Hell no, theres the problem...Or one of them anyway. I'll buy American cars when they can make one that will impress me as my Honda has.. Ok Rant over

[Enzo]

I was looking at a couple cars, Honda Accord and CHrysler PT Cruiser a while back. GUys are telling me to buy the American car. SO I looked into it.

At the time:
CHrysler was a German company.
The PT Cruisers were built in Mexico
The PT had 60% domestic content (US made parts)

HOnda was a Japanese company
The Accords are built in MArysville, Ohio
The Accord had a 95% domestic content.

Seems to me that "Japanese" Accord is more American than the "American" PT Cruiser. It represents more US jobs than the Cruiser did.

Next car story. My Ford Ranger small pickup finally caved in a few years back. 150,000 miles and it was ready to retire. I liked the truck well enough. Called a friend of mine who was a fleet sales manager at a local Ford dealer and told him I needed a new truck. He said he'd set me up with a deal, told me to call so and so salesman and off we'd go. SO I walked into the dealership and met with the salesman, who was expecting me. This was a guaranteed sale for him - didn;t have to convince me of anything. I wanted a basic small truck. Ford Ranger, two-wheel drive, not 4x4, 4-cylinder engine. Manual transmission, extended cab for storage behind the seats. Same thing I had been driving. Nice American truck.

They had none on the lot, they checked around the state, they checked the entire 8 state Great Lakes region (or whatever it was). There was not a single truck available in this form. 4x4s galore, plenty of automatics, lots of 6-cylinders, but not my basic truck. I told the guy to work on it. He tried, but after a week, he still could only offer me the option of ordering one to be built. My old truck was not going to last another 8-12 weeks through a tough Michigan winter.

SO I went to the local Toyota dealer. DEscribed what I wanted. Guy said, "What color you want? I got three on the lot now." I didn;t care, the red looked nice. Toyota had three on the local dealer lot of something Ford couldn;t find in the entire midwest. I bought the Toyota, nice little truck. Not only that, the Toyota cost about $4500 less than the Ford.

The Toyota was built in California by American workers.

[Chuck H]

Originally Posted by Enzo

The Toyota was built in California by American workers.

Now how is it that a Japanese company can turn an acceptable profit in an American factory but Ford has half their $h!t made in Mexico?!? Too many people on the Ford payroll getting paid for simply being in the money path.

Interesting info on the auto industry. I'm agast. The last vehicle I bought was a ford E-150. Best utility van going. But I wonder if I didn't go against my own intent to "buy American" by buying Amrican. I'll have to look into where it was made now.

Should I find it was made in Mexico, what is an appropriate punishment for ignorance

Chuck

[Enzo]

The Japanese company didn't just build a factory here, they built a business. That 95% domestic content tells a story. They also are a lot more efficient than the US companies at building the cars. Fewer man-hours per car are needed. They are not exporting cars to the USA, they came over here and got in the car building business here.

And look at GM, even with Oldsmobile gone, they still have a ton of brands, and some lines share the basic bodies and drive trains and stuff. But to take the same vehicle and call it a Chevy here, and a GMC across the street means there are two parallel lines of organization. Two sets of marketing, two different lines of dealers, etc. And why? So they can have more dealers. The Chevy dealer will get bent out of shape if another dealer nearby can sell Chevy, so the factory makes GMC trucks, which are the same but technically not Chevy so all the franchisees can feel better. GM has too many dealers and too many brands. And that whole SUV thing, all of a sudden every brand needed to have an SUV line, so we saw more or less the same SUVs, and some were GMC, some were Oldsmobile, some Caddy, some Buick, some Pontiac, etc. There is now talk I guess of GM maybe trimming down to just GMC, Chevy, Buick, and Cadilac. Not a bad idea, I'd say.

Chrysler figured it out a long time ago. They had Dodge and Plymouth making essentially the same thing, so they dropped the Plymouth name. That PT Cruiser was a clever idea too, they sold a ton of them, and all they are is a repackaging of their Dodge Neon. Slap a cool body on the Neon chassis and you have a whole new thing to market without designing a whole new car.

Ford has duplication in the Ford and Mercury name plates.

I think also the AMerican companies need to wean themselves from the idea a whole new car has to come out each year. Design a nice car, then make it for a few years. You can still upgrade the motor or improve the pollution stuff or whatever without retooling the whole body annually. Look at guitar amps, Fender doesn;t make a new BLues Junior each year - there have been board revisions inside, but the Blues Junior has been on the market and will stay until people quit buying it. How long has the PV Classic 30 been around? They don't redress all the current models every October.

[madialex]

Originally Posted by Enzo

The Japanese company didn't just build a factory here, they built a business. That 95% domestic content tells a story. They also are a lot more efficient than the US companies at building the cars. Fewer man-hours per car are needed. They are not exporting cars to the USA, they came over here and got in the car building business here.

And look at GM, even with Oldsmobile gone, they still have a ton of brands, and some lines share the basic bodies and drive trains and stuff. But to take the same vehicle and call it a Chevy here, and a GMC across the street means there are two parallel lines of organization. Two sets of marketing, two different lines of dealers, etc. And why? So they can have more dealers. The Chevy dealer will get bent out of shape if another dealer nearby can sell Chevy, so the factory makes GMC trucks, which are the same but technically not Chevy so all the franchisees can feel better. GM has too many dealers and too many brands. And that whole SUV thing, all of a sudden every brand needed to have an SUV line, so we saw more or less the same SUVs, and some were GMC, some were Oldsmobile, some Caddy, some Buick, some Pontiac, etc. There is now talk I guess of GM maybe trimming down to just GMC, Chevy, Buick, and Cadilac. Not a bad idea, I'd say.

Chrysler figured it out a long time ago. They had Dodge and Plymouth making essentially the same thing, so they dropped the Plymouth name. That PT Cruiser was a clever idea too, they sold a ton of them, and all they are is a repackaging of their Dodge Neon. Slap a cool body on the Neon chassis and you have a whole new thing to market without designing a whole new car.

Ford has duplication in the Ford and Mercury name plates.

I think also the American companies need to wean themselves from the idea a whole new car has to come out each year. Design a nice car, then make it for a few years. You can still upgrade the motor or improve the pollution stuff or whatever without retooling the whole body annually. Look at guitar amps, Fender doesn't make a new Blues Junior each year - there have been board revisions inside, but the Blues Junior has been on the market and will stay until people quit buying it. How long has the PV Classic 30 been around? They don't redress all the current models every October.

Very well said Sir.......

[hasserl]

Toyota is famous for lean manufactoring. The Toyota System is world renown for efficiency. Japanese companies follow a practice of "kaizen", continuos improvement. As systems are improved and streamlined and human performed jobs are eliminated the people retain their jobs, but they go to work helping to further improve the system and streamline processes. Everybody works to reduce costs and improve efficiency. The result over several decades has proven to be superior to common Western business practice. Funny that it was basically an American that showed the Japanese how to do this. He tried to show the Americans, but they weren't interested. http://en.wikipedia.org/wiki/W._Edwards_Deming

I work in the equipment maintenance business. I can walk into just about any company and find where they are wasting dollars all over the place in their maintenance practices. It's rather easy actually. getting them to trust me and make changes is very difficult. People hate to change, people love to cling to their old ways of doing things, they refuse to see how it is costing them money. But those that do see their maintenance costs drop drastically, their equipment uptime and availability and equipment service life go up tremedously. When I first got into the business over 25 years ago, we thought that if an engine reached 10,000 hrs of use we had gotten satisfactory service out of it. Now companies I work with expect to get >24,000 hrs service life from an engine. And it actually costs them less to maintain it over that time frame. But for most companies 10,000 hrs is still acceptable performance. As times get tough and competition forces tighter margins, it's the companies that are willing to change and improve that survive, the others will die off.

And that's how I view the auto industry. American car companies have to change to become more efficient and more competitive, or they will not survive. It doesn't matter how much money we pour into them, we're only delaying the inevitable. And we'll be wasting American taxpayers money in the process. It may be a bitter pill to swallow, but we have to let the market forces work, and if the American car companies can't survive so be it. We'll still have a thriving automobile industry in the US, it just will be in places other than Detroit.

For some very good information on economics and on topics discussed in this thread please check out the website of Dr Walter Williams: http://www.gmu.edu/departments/economics/wew/ His syndicated columns deal with a lot of these issues, in particular I recommend http://www.gmu.edu/departments/econo...ackonomics.htm and http://www.gmu.edu/departments/econo...20Angst%20.htm Lot's of good stuff there.

[madialex]

Originally Posted by hasserl

Toyota is famous for lean manufactoring. The Toyota System is world renown for efficiency. Japanese companies follow a practice of "kaizen", continuos improvement. As systems are improved and streamlined and human performed jobs are eliminated the people retain their jobs, but they go to work helping to further improve the system and streamline processes. Everybody works to reduce costs and improve efficiency. The result over several decades has proven to be superior to common Western business practice. Funny that it was basically an American that showed the Japanese how to do this. He tried to show the Americans, but they weren't interested. http://en.wikipedia.org/wiki/W._Edwards_Deming

I work in the equipment maintenance business. I can walk into just about any company and find where they are wasting dollars all over the place in their maintenance practices. It's rather easy actually. getting them to trust me and make changes is very difficult. People hate to change, people love to cling to their old ways of doing things, they refuse to see how it is costing them money. But those that do see their maintenance costs drop drastically, their equipment uptime and availability and equipment service life go up tremedously. When I first got into the business over 25 years ago, we thought that if an engine reached 10,000 hrs of use we had gotten satisfactory service out of it. Now companies I work with expect to get >24,000 hrs service life from an engine. And it actually costs them less to maintain it over that time frame. But for most companies 10,000 hrs is still acceptable performance. As times get tough and competition forces tighter margins, it's the companies that are willing to change and improve that survive, the others will die off.

And that's how I view the auto industry. American car companies have to change to become more efficient and more competitive, or they will not survive. It doesn't matter how much money we pour into them, we're only delaying the inevitable. And we'll be wasting American taxpayers money in the process. It may be a bitter pill to swallow, but we have to let the market forces work, and if the American car companies can't survive so be it. We'll still have a thriving automobile industry in the US, it just will be in places other than Detroit.

For some very good information on economics and on topics discussed in this thread please check out the website of Dr Walter Williams: http://www.gmu.edu/departments/economics/wew/ His syndicated columns deal with a lot of these issues, in particular I recommend http://www.gmu.edu/departments/econo...ackonomics.htm and http://www.gmu.edu/departments/econo...20Angst%20.htm Lot's of good stuff there.

Thanks for those links, that stuff is right up my alley in terms of good reading.

[DCinDC]

Originally Posted by Steve A.

But the question we need to ask is who would suffer the most if our dollar was devalued considerably. If I owe $100,000 on the mortgage for my house and it is suddenly worth twice as much as it was before (because of the devaluation of the dollar) am I not making out like a bandit?

No. You misunderstand the concept.

If the dollar were devalued, that is the same as inflation. If your house is suddenly worth twice as much as it is now, then inflation has shrunk ALL the dollars. You will not be "making out".

If you were to sell, you would get a big pile of cash, but it probably wouldn't buy any more than the original (static, now) value would.

We're fucked. Buy lots of toilet paper, flour, rice, powdered milk, and sugar. Now. While you can.

[madialex]

I Just read about a Factory that laid off all it's employees and closed their doors. Gave the workers 3 days notice. The CEO said Bank Of America who by the way got 25 billion in the bailout deal told the company they were not going to extend them credit anymore to make payroll so the factory had no choice but to close the doors. Pardon me if I'm wrong here but is not that what the bailout was for, to get banks lending again and unfreeze credit???? So now they have this money and are just sitting on it, which by the way is what I predicted the banks would do in the first place... So lets give all these fucks in these banks and mortgage companies all these billions to sit on and wait out the economy. What fucking good did it do for the Gov to bail out these pricks with our Tax Dollars and they wont lend, causing us, the payors of this bail out to lose our jobs??? Now what????? I say, stop the bailout money flow, take back what has been lent to these assholes and let them sink into oblivion, either way they wont lend any money, we are fucked, our economy is in the shitter, people closing up shop all over the country and people out of work. Seems a pointless effort and a big waste of our money to help these low life fucks!!!!!!

[Enzo]

Before we call people names, what are the particulars of the case? Just because the bank has more money to lend now doen't make that company a better risk. The bank still has to determine if they will be able to repay the loans. The bank won't make money until it loans it out, but they also don;t want to make more bad loans.

If a couple drunk college kids walk into a bank and ask for a loan to start a pizza joint and dance bar, should these fucks and pricks be obligated to loan it to them?

[madialex]

Here ya go

http://www.chicagotribune.com/news/c...,1928458.story

Yeah the bank may well have had reason to not lend to them which is perfectly fine with me if it was actually for a good reason, but we have seen what the banks are doing with the bail out money, exactly nothing. This is why I question any bank when I hear of something like this.

I know of of at least 4 places here in my area of which I know 3 of the 4 CEO's and know their business and know, not for a fact but kinda know that they were all very stable companies and the banks just decided not to make loans to them anymore, now they are closed down. I work in my Fathers business and it is a seasonal business and we do well during the busy season but depending on economic conditions some years we do better than others. I am very afraid that we too will not be extended the credit we once used to get, to get us through the slow months. So far we have all our bills paid and have been working the employees as much as we can with the little bit of business we are getting but this will come to a stop soon. I am going to close the service dept down starting next week to working only 3 days a week. It wont save a lot but it will save 5 vans gas running for 2 days and 8 employees being on the clock far at least an hour each of those days. If they come in they get 1 hour minimum no matter if they have work or not. So that will save 16 hours payroll and the other associated costs along with that.

These are very scary times and the Banks need to start lending again or we are all going to be in a world of hurt!

[Enzo]

And isn't the bailout money intended for mortgage relief? As opposed to business loans? I really don't know.

[Mark Ingram]

seeming completely naive or out of touch with reality:

Originally Posted by madialex

not going to extend them credit anymore to make payroll so the factory had no choice but to close the doors.

Isn't there something fundamentally wrong with a business built on its ability to borrow? Shouldn't the business be built on its ability to make a profit? If a business uses a loan to start up, shouldn't it be a goal of that business to pay off the loan and learn to operate on its own revenues? Instead of (forever) paying a portion of those revenues to pay a banker to use the bank's money?

[hasserl]

It all depends on too many factors to try to list here; but for many companies there is a period of time when they have anticipated funds in accounts receivables but not enough cash on hand for things like payroll or accounts payable, so they rely on short term credit to cover that period, then pay off the loan as their accounts receivable come in. If they cannot get short term credit it really hurts their operation.

I think Mark's point seems reasonable that a company over time should compile enough cash reserves to cover these periods without needing short term credit, and so save the added cost of borrowing. But for some companies that may be difficult just because of the nature of their business or the industry they work in; for others they may be so screwed up that is the least of their concerns (and may be why they have difficulty getting credit in a tight market); and for others it may just be more cost effective to use other people's money, depending on the cost of borrowing and the cost of maintaining and using cash.

[Enzo]

Farmers have long borrowed for seed to plant in the spring, and anticipating the harvest in the fall. The operation may be profitable, but not necessarily enough to have sufficient seed money left at the end of winter and pay living expenses. What credit does is act like a filter cap. It smoothes the cash flow. Imagine you made $50,000 a year, but got only one paycheck. You might use a credit card for interim purchases.

[Mark Ingram]

Originally Posted by Enzo

Farmers have long borrowed for seed to plant in the spring, and anticipating the harvest in the fall. The operation may be profitable, but not necessarily enough to have sufficient seed money left at the end of winter and pay living expenses. What credit does is act like a filter cap. It smoothes the cash flow. Imagine you made $50,000 a year, but got only one paycheck. You might use a credit card for interim purchases.

Point taken. But it seems like, over time, for the smart business owners and managers, a company should be able to wean itself off the credit-udder and stand on its own two feet. Having no plan to wean a company off of credit (especially a company that has operated 100 years or more) is alot like my deceased uncle who never moved out of him parents' house. And it seems as greedy and irresponsible as making loans to people who have no way to repay just so you can collect exhorbitant interest for a while.

[Earl Norton]

One of the factors in all this that the media is not talking about is the effect of cheap money. Yesterday the treasury sold notes at no interest. Banks can't lend money and not make a return so money is not being lent. These are strange times. I wonder if we have not been told the entire truth in this mess.

[Mark Ingram]

Originally Posted by Earl Norton

One of the factors in all this that the media is not talking about is the effect of cheap money. Yesterday the treasury sold notes at no interest. Banks can't lend money and not make a return so money is not being lent. These are strange times. I wonder if we have not been told the entire truth in this mess.

I have absolutely no doubt that we are not being told the whole (or *any*) truth about this mess.

Kinda makes me glad to have guns (and Bibles) to cling to: at least, when if economic woes cost me my job I will be able to hunt for food to eat.


Slight divergence:
Has anyone besides me noticed that politicians tend to be lawyers, not business-people? How do we realistically expect that those people can manage the business that is the US economic system? Its like asking Joe The Plumber to build a rocket for a mission to Saturn. He might be very good at what he does, but what he does is only part of what we need.

And how masochistic/stupid are we to keep refusing to elect people who have the skills what we need?