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America has not lost as many as 533,000 jobs since Dec 1974 (http://www.msnbc.msn.com/id/28067433/)

http://www.cleanmpg.com/photos/data/501/10_00_per_hour_job_seekers_lineup.jpgAP - Dec. 05, 2008

Maybe one of the edgiest CleanMPG commetaries, but while I favor an extreme makover of the American auto industry, it's liquidation along with 2.5 million jobs dependant on it will permanently damage the US economy and be a milestone in this nation's decline. This kind of displacement will take decades to recover if ever. -- Ed

Skittish employers slashed 533,000 jobs in November, the most in 34 years, catapulting the unemployment rate to 6.7 percent, dramatic proof the country is careening deeper into recession.

The new figures, released by the Labor Department Friday, showed the crucial employment market deteriorating at an alarmingly rapid clip, and handed Americans some more grim news right before the holidays.

As companies throttled back hiring, the unemployment rate bolted from 6.5 percent in October to 6.7 percent last month, a 15-year high. ... http://www.msnbc.msn.com/id/28067433/

I freely acknowledge sparks are going to fly from my OP/ED attached.

Letting 2-3 of the Big Three liquidate is serious structural unemployment when jobs are already hard to come by....anyone think all these folks in the auto industry are going to be fine five years from now?

I can go along with a pre-arranged Chapter 11, but the point is Detroit survive in another form - not liquidate and die.

If the economy were otherwise strong, I'd more readily accept the notion that Detroit should fail. However, given rising unemployment and the fact that it's unlikely for anything to take its place anytime soon (in terms of employment and revenue flow), I don't think we can afford to let Detroit die at this time.

Whatever way this turns out (bailout, bankruptcy, or failure) is going to be a bitter pill to swallow. I think the best bet is to reduce the long term damage as much as possible.

I look forward to whatever will rise out of Detroit's ashes. Small, independent automakers like Aptera? Companies designing and building Personal Rapid Transit, high speed trains to compete with Europe and Asia, or personal electric vehicles?

I am in favor of letting the market forces weed out the weak and let only the strongest survive... survival of the fittest... if that means the "big 3" become 2 or 1... so be it... I also don't care if it comes from merger or company collapse ... people still buy cars... millions of them every year ... even in 2008 ... I think ( could be wrong ) but I think the average American buys a new car every 3 to 5 years.... I don't see a problem with vehicles being durable enough to push the average closer to 8 to 10 years... but that will reduce auto sales volume to 1/2 or 1/3 of what it is now... still supply and demand... there is not enough demand for the vehicle product to fund all three companies...

I also think that fewer auto sales per year is a generally good thing... it means we are generally getting more use out of the products... It is also good for more people to go carless...

3 R's :)

Reduce ( how often you buy a car , how often you drive the car you have )
Reuse ( convert it to an EV , buy used cars instead of new cars, fix up junkers )
Recycle ( when the car is finally all spent recycle every bit you can. )

So ford will survive, GM and chrysler will become one and some start-up companies will arise putting a shock to the current auto companies....I will now get down off my soapbox.

I'd like something good to come from the 700 billion. Give them some money!! I'm sure that all this light is being shed on the problems, some good can come from the money they need/want.

I freely acknowledge sparks are going to fly from my OP/ED attached.

Letting 2-3 of the Big Three liquidate is serious structural unemployment when jobs are already hard to come by....anyone think all these folks in the auto industry are going to be fine five years from now?

I can go along with a pre-arranged Chapter 11, but the point is Detroit survive in another form - not liquidate and die.

Well, Delta Flyer, may I engage in a little pontification of my own?

To find our way out, I think we must figure where this mess that has befallen us, has come from. The way I see it our problems originated out of the unholy union the oil industry made with the auto industry decades ago to worship the golden idol of big cars and conspicuous consumption for greed & windfall profits. For the longest time it seemed to be OK. The cartel had its way. Restraint of trade, price fixing and violations of antitrust were their modus operandi and thru the special interest groups and lobbying from groups like the API, they had their way with our government. If they would not have been as greedy as they were, things would probably have gone on for a lot longer and they would not have upset the world applecart as bad as they have.

But having Bush in the pole position for the last 8 years gave them new found power and new opportunities for unbelievable profits. So a few years ago they started raising the cost of gasoline and diesel fuel, giving us a whole plethora of "free market reasons" as to why the cost of oil has to go up. With trade of high MPG European cars kept off our shores and with the protection of our own government, America found itself with low MPG cars and gasoline at $4.50 a gallon. And the cartel had us just where they wanted us. No one saw coming what came.

No one really had any idea how devastating it would be to raise the cost of gasoline to $4.50 in a year and a half. At first, when things like foreclosures and sub prime loans started, everyone said it was the fault of the lenders making loans or people who should not have been buying houses due to inadequate income. But then banks started teetering, and world markets started acting very unstable. Our stock market and other markets began to swing wildly.

Raising the cost of gasoline so fast increased the cost of living like this country had never before experienced and this action precipitated all of the woe we now see around us. I believe it is at the heart of the depression we now face.

And so, should we bail out those whose policy was "what is good for us is good for America? Should we bail out companies that saw years ago that their greed was at the very least immoral and unethical, and knew full well the lengths we were going and the things our country was doing for oil to fuel their obscene profits? Now that Americas wealth has been sent to OPEC and our dollars worth is pathetic, now that America's standard of living is going down like the Titanic, now that we have all swallowed hook line and sinker their tripe that driving big powerful cars fast and aggressively is manly and the American way, now that we are barreling at breakneck speed down the road to depression, now do you think we should give those who I feel are the most un American companies in America's history 34 BILLION DOLLARS? How bout if they price fix the cost of gasoline back down to $1.75 a gallon? How bout if they don't come begging for money in their corporate jets?

I think not.

We are not going to get out of this mess without some real power OUT OF THE BOX thinking, alla Franklin D. Roosevelt. We are going to have to institute WPA job corps, and we as a country are going to have to fund companies to produce what this country needs to get out of this mess. Don't fund those who put us here, fund those who will help us get out! Fund Tesla and other companies actively working on alternatives to FSP's. Fund Ener1 and other companies working hard on battery technology. Put the workforce now making hybrid Tahoe's to work with companies working hard to make America independent of oil.

That is what I believe we need more than anything else. We need to end our addictive dependence on oil. We need energy efficient cars NOW and we desperately need to be told WHY we can no longer go down the machismo muscle car road we have beed sold by the unamerican big 3.

That is why I hypermile. It is the most important morally ethical thing any American can do for his country, for it keeps us on the wagon and away from the dealers.

Bob. :flag:

The unemployment picture is worse than "just" 533,000 jobs lost last month. CNN reports it adds up to 1.9 million lost since December 07, in a time when we SHOULD have added another 1.1 million "just to keep employment at the same level". There's another 500,000 who just dropped out, and gave up looking for jobs.

Translation: we are now missing 1.9mm PLUS 1.1mm or 3mm jobs below where we should be.

Time to hold our nose, and look at the least stinky bailout package. With better oversight.

Folks think all of this is bad. Its nothing compared to the great depression. Not even close.

Let the doom and gloom folks rock and roll....

now there's a LOT more unemployment checks going out...yeah...this is definitely getting worse by the hour...

I think we should also consider we don't know how long or deep this is going to be - that has me worried.

The working population could not provide enough revenue to cover gov't spending
The value of the dollar drops
Trading with other countries becomes expensive as their prices are "too high"
The price of oil goes up creating an even further reduction in demand
The working population got reduced due to increased expenses.
Unemployment issues more taxpayer money driving us deeper into a deficit.
Automotive companies with large SUV's see sales plummeting due to a "national deficit"
A tax cut on the middle class means less money into the federal hand and more to those still employed.
The budget deficit increases
Federal has to cut spending on programs that are not necessary so as to sustain the economy.
The war becomes overwhelmingly expensive
We cant pull out because bush signed us in for three more years.
Taxes are increased to pre-bush levels on those making over 250k
Taxes are increased again on those making over 250k
This produces enough revenue to ride out the costly war
The war ends, gas prices increase as the global economy gets better
At the end of the next four years, a decent economy and high gas prices as garages begin to look more refreshed with hybrids and newer domestic cars that meet consumers needs.

To find our way out, I think we must figure where this mess that has befallen us, has come from.


I agree with that part...

But, I disagree with where you think the root cause of the problem is.

My 2 bits follows
;)

We live in a quick fix instant oatmeal society.

Spending does drive the economy, not debt.

When a person goes into debt in order to spend more money... they then have to pay the interest of that debt which means they will ultimately have to spend more money to get less.

As people borrow more and more money they can spend more... so the economy seems to be doing well... but it is really robbing economic growth from the future for the present... you can't go infinitely into debt you reach a point where you have to start paying it off... at that point you then have to spend significantly less for years thus hurting the present economy in order to pay back what you borrowed.

Over the long run ( several years ) the personal losses would hurt businesses that sell to those people that have to cut back... but the debt business would normally compensate with additional profits, just not in the same fields / sectors of the economy... so sears or GM go under because few people buy from them... but Visa and other debt companies expand and grow.

The Debt businesses get hurt when those in debt file for bankruptcy and such... on paper the debt goes away... but all that means is that the borrowed economy from the future never gets repaid... which will eventually catch up with everyone...

The Debt businesses wanted to make more money so they started giving more people larger loans that those people were less likely to be able to handle ( higher risk )... when the debt businesses had losses from for-closers and such they didn't want to make less money that year, so they pushed further for larger loans with more risk...

The instant gratification people took the debt because they didn't want the type or house they could actually afford or they wanted that new car when they didn't need it, or a $20,000 car when they could only afford a $10,000 or $5,000 car ... etc..etc...

repeat the above for many years... then people start defaulting too much on mortgages and other loans... or to avoid it they start cutting back to keep that overly large house ... either way the debt businesses suffers horribly... we pass $700 Billion to try and prop it up for a little while ... but that $700 Billion is just future tax dollars that now won't be spent on other things... to the tune of about ~$2,000 for every person in the U.S.

Those people who were cutting back reduced their purchases so the Sears and the GMs all suffered... As businesses suffered they fired people or cut pay ... so people cut there spending even more , and more bad debts defaulted.

We are now paying for the instant gratification we wanted for so many years... the government is just doing the same flawed logic that got us into this mess by borrowing more from the future.

The solution is that you borrow as little as you possibly can from the future and live within your means today... we still have to dig our selves out of the hole we dug for ourselves... but digging a bigger hole to fall into latter is not a good solution.

The loans the government is giving are flawed loans because they do not pay back the full value of what is lost/borrowed .... $100 in 1920 is not worth the same as $100 today... just to recover the loss due to inflation you have to charge a minimum % interest... allot of government loans charge bellow this % of interest... thus the money repaid does not repay the total value of what was borrowed... even if you charge enough to break even with inflation you are still getting back less because... it cost money to process the payments, and other things ... the loan itself has operating expenses ... so just to break even you have to charge enough interest to compensate for Inflation, Operating expenses, insurance in case the debt defaults, etc...etc... that total interest rate is allot higher than what government loans like these charge.

Folks think all of this is bad. Its nothing compared to the great depression. Not even close.

Let the doom and gloom folks rock and roll....

And so far, its not even as bad as the Carter years (late 70's/early 80's) when we had unemployment in the low teens and interest rates in the low 20's.

I agree with RobertLastic that we do need WPA type work efforts started now. Putting unemployed to work in needed infrastructure programs keeps our country's human resources productive.

I do think the govt should favor (yes pick winners) the startup EV makers Tesla and Aptera with $$ versus just the big three. They are already working hard to make PHEVS a reality.

I, For one, wholeheartedly agree with Robert. The Bush Administration got his Big Oil friends rich beyond all knowing by draining the coffers of the middle class. It wasn't just gasoline that went up in price. Food, heating, and shipping all went through the roof. It's easy to get behind on a mortgage when the heating bill comes and it's a thousand dollars (and it used to be $275). It's easy to get behind on a car payment when a fillup costs $100 and it used to cost $30.

Bush showed absolutely no mercy to the middle class. He even made sure that bankruptcy was no longer an option for all but the wealthiest Americans (who get to keep all their stuff on Chapter 13).

And the Detroit-3 are in the trouble they are in only *partly* due to unions. They could have been competing with the Prius, Camry, Corolla, Civic, and Accord *years* ago, but they simply chose not to.

I *don't* find it co-indidental that we get a Big Oil Man for President in 2000 and oil prices go through the roof. I also don't find it co-incidental that once it looked like the Republicans were going to fall from power that oil prices fell back to something approaching 2000 levels (adjusted for modest, sane, non-price-fixing inflation).

It's time for Bush to have a new photo op: get him to stand between a bankrupted business and a foreclosed home, and drape a big banner inbetween that reads "MISSION ACCOMPLISHED!"

I agree with that part...

But, I disagree with where you think the root cause of the problem is.

My 2 bits follows
;)

We live in a quick fix instant oatmeal society.

Spending does drive the economy, not debt.

The Debt businesses get hurt when those in debt file for bankruptcy and such... on paper the debt goes away... but all that means is that the borrowed economy from the future never gets repaid... which will eventually catch up with everyone...

The Debt businesses wanted to make more money so they started giving more people larger loans that those people were less likely to be able to handle ( higher risk )... when the debt businesses had losses from for-closers and such they didn't want to make less money that year, so they pushed further for larger loans with more risk...

The instant gratification people took the debt because they didn't want the type or house they could actually afford or they wanted that new car when they didn't need it, or a $20,000 car when they could only afford a $10,000 or $5,000 car ... etc..etc...

repeat the above for many years... then people start defaulting too much on mortgages and other loans... or to avoid it they start cutting back to keep that overly large house ... either way the debt businesses suffers horribly... we pass $700 Billion to try and prop it up for a little while ... but that $700 Billion is just future tax dollars that now won't be spent on other things... to the tune of about ~$2,000 for every person in the U.S.

Those people who were cutting back reduced their purchases so the Sears and the GMs all suffered... As businesses suffered they fired people or cut pay ... so people cut there spending even more , and more bad debts defaulted.

We are now paying for the instant gratification we wanted for so many years... the government is just doing the same flawed logic that got us into this mess by borrowing more from the future.

The solution is that you borrow as little as you possibly can from the future and live within your means today... we still have to dig our selves out of the hole we dug for ourselves... but digging a bigger hole to fall into latter is not a good solution.



Thanks for the input, Iamian. I agree with you that many Americans have been living for years on what you called "instant gratification", or using their credit to buy beyond their means. Living close to the wire like that is quite dangerous for if the cost of living goes up then keeping solvent becomes more and more of a problem.

I would like to modify my statement that the oil/auto cartel was responsible for our melt down. Your response is correct. A root cause of a forest fire is not a carelessly flipped match but rather a long period of dry conditions that makes a careless act a disaster. For years and years we have been living close to the edge because of what we want. When the cost of gasoline skyrocketed, our cost of living did likewise. That was probably the "spark" that has resulted in the conflagration we now find ourself in.

Thanks again for the insight, Iamian!

Bob. :flag:

Thanks again for the insight, Iamian!

Bob. :flag:

:woot:

go me

:)

thanks... that's very rare to read a compliment like that.

-----------------------

I think the saddest part of the whole thing is ...

How many people have learned anything from this?
How long will this lesson stick with those who did learn something?
Is there any real chance for this lesson to be passed on and embraced by future generations?

Sadly I expect like those lessons learned in the great depression... few will learn from this .... fewer still will remember the lesson for very long... and in a generation or so nothing will have changed.

:(

My younger brother (20) called me up today and said. No need to drive cheap anymore Rick! gas prices are down!....:(

What do I tell him?

You tell him this is a temporary over correction of the market that can't last as the economy improves and it becomes increasingly obvious that rising demand cannot be met.

My younger brother (20) called me up today and said. No need to drive cheap anymore Rick! gas prices are down!....:(

What do I tell him?

Let him know that we are not hypermiling to save money but rather to save our country. It is the only ethical thing to do!

Bob.

Out of the big three from looking at the MPG ratings on www.fueleconomy.gov Ford is at least making 30 MPG SUV hybrids. As for GM... ... ... Ford is also more diversified having owned shares in Mazda and purchasing Volvo. GM sold out so they're getting their just desserts.

Sean, Robert Lastick:

Thanks, I was a bit speechless when he said that. He's a smart kid, however it does give me insight as to how the rest of my family feels along with most of society. I'll be sure to let him know!

I am in favor of letting the market forces weed out the weak and let only the strongest survive... survival of the fittest... if that means the "big 3" become 2 or 1... so be it... I also don't care if it comes from merger or company collapse ... people still buy cars... millions of them every year ... even in 2008 ... I think ( could be wrong ) but I think the average American buys a new car every 3 to 5 years.... I don't see a problem with vehicles being durable enough to push the average closer to 8 to 10 years... but that will reduce auto sales volume to 1/2 or 1/3 of what it is now... still supply and demand... there is not enough demand for the vehicle product to fund all three companies...

I also think that fewer auto sales per year is a generally good thing... it means we are generally getting more use out of the products... It is also good for more people to go carless...

3 R's :)

Reduce ( how often you buy a car , how often you drive the car you have )
Reuse ( convert it to an EV , buy used cars instead of new cars, fix up junkers )
Recycle ( when the car is finally all spent recycle every bit you can. )


I'm with you. We'll manage either with the big 3 or without the big 3, but subsidizing bad behavior leads to more bad behavior.