The history of this financial crisis will show the pin that pricked the bubble was $4.50 a gallon gasoline. The era of cheap oil is over, the era of relying on the automobile for development is over, and every dollar we now place in our automobile infrastructure is more millstones around our collective neck.

Once the panic is over, reality is going to set in, and the change necessary is much bigger than everyone is contemplating. The problem is we may in this short period of time become so far indebted to the past, we will insure our decline.

quote:
Brown is demanding a greater role for government in the banks Britain is investing in and more taxpayer protections than Paulson. Some of the differences:

– The British government is buying ordinary shares, which carry voting rights, along with preference shares, which carry no voting rights.

The U.S. government is purchasing preferred stock with no voting rights, although it is also getting warrants to buy common stock at a set price. If it bought the common stock, it presumably would get voting rights, although this is not the goal. Rather, the government hopes the common stock will rise in value and the government can sell it at a profit.

– The British government is getting representation on the banks’ boards of directors. The U.S. government is not.

– Britain demanded that the chairmen and chief executives of RBS and HBOS resign. Paulson did not demand resignations.

– The British government’s preference shares will earn the equivalent of a 12 percent dividend.

U.S. taxpayers will earn 5 percent on their preferred shares for the first five years and 9 percent thereafter.

– The British banks agreed to stop paying dividends on ordinary shares until the government’s preference shares are redeemed. This is angering small shareholders in the United Kingdom.

The Paulson plan allows banks to continue paying common-stock dividends, as long as dividends on the government’s preferred shares are being paid.

– The British banks promised to maintain, over the next three years, the availability of competitively priced lending to homeowners and small businesses at 2007 levels.

Paulson extracted no such promises.

– Brown has banned cash bonuses for directors at the three British banks. Banks taking the U.S. investment could not make golden parachute payments to senior executives, nor could they take a tax deduction for more than $500,000 per year in compensation for top executives.

Why has Brown demanded more concessions from banks it is investing in than Paulson? Part of it is philosophical.

“The British government is happier living with banks,” says UC Berkeley economist Brad DeLong. “Paulson believes there is public and private. The government shouldn’t own shares or intervene in corporations.”

The business and conservative elements made an effort to discredit the auto industry to destroy the unions. And it worked.
Many have made fortunes by getting unions out of the way. The money that used to flow to the American worker now flows directly to them by using slave labor, like in China.

I’m having a hard time locating a good reference (so perhaps I am wrong), but an astonishing fraction — something like 5-10% — of the entire US economy is directly or indirectly linked to the making of cars. Is this something to be simply pushed off a cliff, in the name of ideological purity?

Perhaps a better way of asking the question: oxygen is supposed to recombine with the carbon in the wood of your house. Does this mean you will stand back and let it burn — permitting a new management to assert itself — or are you going to partake in some evil intervention in the completely natural market between oxygen and carbon and reach for a water hose?

Back to the original issue though with a question: cars are only about 1/10th the value of a typical house. Would it be unreasonable to expect a car loan problem to be about 1/10th the size of the toxic house loan problem?

But then it won’t be fair to us! Japanese will get nice japanese cars, Germans will get BMW and Mercedes, and what will we get? The garbage coming out of Detroit?

Unless of course, US car makers will be mandated to manufacture japanese or german cars. Then I’m fine with it.

People died to get you the 8 hour day and pension benefits. Now silly people spit in their faces.

We need decent jobs for people who are not white collar. That is why we are losing the middle class. The media used to champion the working classes. Now they laugh at them as they lose any decent jobs and feel superior. That is why they stopped voting Democratic.

Japan does not allow many car imports, thus they have a protected market to refine quality.
Every advanced country on earth but us is beefing up their auto industry with gov. help to compete.

This is group think. You! Out of the twilight zone!

Credit Card Debt
Student Load Debt
Auto Load Debt

The Dems will rewrite the bankruptcy laws so consumers can do a Chapter 7 again, When that happens all the above paper will be worthless.

http://www.bloomberg.com/apps/news?pid=20601109&sid=ad.3V32NVlA0&refer=news