Saturday, November 15, 2008

More Bailout Follies

Unable to get anyone else to invest in their lousy operations, auto manufacturers are now hitting up Uncle Sam. The main issue is that these large companies have unresolved labor issues which will still be unresolved after they soak up a couple billion dollars, and so they will need a couple billion more sometime in the not too distant future in order to put more patches on the sinking ship. What's worse is that the big three have spent the past ten or so years exporting their issues into the U.S. economy by using their largess to extort ridiculous terms from dealers and near (and beyond near) bankruptcy level pricing from suppliers.

Since the trough was opened up after AIG, everyone has been looking a for a piece. I wonder myself if it's not too late to form the 'Sandmich Saving and Loan' so that I can get a 1% loan with a 500 year payback timetable.

Inevitably, poorly managed areas have come to the fore looking for goodies which will inevitably be paid off (if they ever are) by the better managed locations:
The three mayors proposed providing loans to help cities pay pension costs. They also want $50 billion in loans for investment in infrastructure, and additional one-year loans to cities unable to borrow cash because of the tight credit markets.
The pension issue is related to the fact that these gutless politicians refuse to stand up to their government unions and demand compensation levels that, you know, they can afford. The last I checked, roads (i.e. "infrastructure") don't pay taxes, buy washing machines, or pay for their own maintenance. And the reason these cities can't get money? The same reason GM and Ford can't, they suck.

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