There's no quick fix. There, I said it! There is no quick fix for the economy. We can't just do a stimulus package here, ship a dollar to this bank or that bank, whatever silly idea our little hearts desire. This isn't something we can get out of by printing more money and hoping that the economy holds together with bobby pins and glue.
It takes years to get into the kind of economic mess we are in. It will likely take the global population of the world at least a decade to pull everyone out.
By the way, I am for letting some of the institutions that have imperiled the economy go down the toilet. I've already seen many abuses of the so called "bailout" funds at AIG and others.
And let's talk about Detroit. I was born in Detroit and I grew up just outside of Detroit. I know just a little bit about auto companies; many of my family members work for them, my family sold products to them and I grew up with "auto brats". Most of the kids I grew up with had parents that were executives in Ford, GM and Chrysler. We went on field trips in my school to the Ford Rouge River plant almost every year. At my high school graduation party my gift bag was from my friend's at General Motors. Most of the people that I graduated with attempted to work for auto companies. My first car was an Chrysler Omni Horizon (which I rebuilt several times with junk parts bought in Detroit Junk Yards near 8 mile road off of Woodward Avenue). Am I an expert? No. Do I have much more experience with American car companies than many or most? Well, yes.
American car companies have been going out of business for almost 35 years. They've been consistently behind the times with some bright exceptions like Lee Iacoca and the K-car and the Ford Taurus. Even with those successes, they let them (the models) linger far too long and tend to fall back on automobile comfort food; big cars with bad milage and mediocre customer service. I can tell you about one of my relatives that has worked for Ford for 40 years and for 30 of them he's been shuffled around, had his hours cut and had his pay fiddled with consistently. He is great at what he does and I can tell you he knows one heck of alot about building cars. Whenever I've asked him about restructuring in Detroit he's told me the same thing: wait until the spotlight is off of the auto companies and everything goes back to business as usual; bad quality, products that are out of touch and executive pay that is inconsistent with performance.
Here's my point: the same guys that have presided over the last 35 years or so of Detroit mess are still there. After years of high gas prices, these people are just figuring that the world might need more fuel efficient automobiles? Or people might be sick of paying the Saudis for oil and want electric cars? Or that Toyota is now bigger than all 3 American car makers combined?
The Detroit Executives are just figuring out now that they need cash, coincidentally at the same time the banks seem to be out of cash?
Here's something to think about when you hear about how we should bail out the auto companies: all American cars get most of their key components from another country. My first car that I mentioned? The 1979 Omni Horizon had a motor by VW. That was almost 30 years ago. And if you are lucky enough to be able to afford a Ford, GM or Chrysler product in this economy, check out where the American car was made. My American car was made in Canada.
Make no mistake, I am for American workers. I am an American worker. But I am not for Auto Executives that make bad decisions consistently over decades and still get a huge paycheck. I don't want to bail out rich people. I want the people that really do the work to keep their jobs. And I can guarantee one thing: auto workers jobs ain't cushy. They aren't easy and they shouldn't be treated with such a lack of respect or honesty. Auto workers should be treated with as much respect and integrity as any Vet coming back from war. These people do hard jobs and shouldn't be at the whim of the "quick fix".
Thus the point of this: there is no quick fix. There's no quick fix for banks that bought mortgage backed securities based on nothing, there's no quick fix for insurance companies that were insuring mortgages based on nothing and there's no quck fix for auto executives that build huge cars and trucks while the price of gas is widely fluctuating and consumers are opting for hybrids, electric cars and product that is reliable and inexpensive. There's no quick fix for greed and stupidity. I am leery of looking at any politician as a potential fix for this. It has to come from the people.
The banks are still trying to make huge amounts of money off of mortgage backed securities and the auto companies are still trying to sell huge lots of SUV's. I just saw a new commercial for the Escalade Hybrid. The theme of the commercial was "game set and match". At $72k plus per car and at 20 MPG on the highway, is this a company that really needs tax dollars?
Marc
