Where Do I Sign Up For My $15 Billion?

It's easy for most people to write about what they know, because they can come off as an expert on the field, and others will listen and feel enriched by their knowledge. That's what this blog has mostly been about for the past 3 years, from bears to movie reviews to deciphering all the complicated technical things Human Dynamo does. Well, it's time I take the plunge, and write about something I don't know much about at all: economics. Specifically, the car industy's proposed bailout. (SPOILER ALERT: For a much better and more factual and intelligent argument, check out Human Dynamo's "Car Talk." But keep reading this first.)

A couple of weeks ago, Yahoo reported the following: "General Motors Corp. said Friday it lost $2.5 billion in the third quarter and warned that it could run out of cash in 2009 if the U.S. economic slump continues and it doesn't get government aid." Aww, GM needs more money from the government so they can make more cars that nobody can afford, or so they can buy another company so they have more of a stranglehold on the car industry. Sounds like we should definitely bail them out. For many years, car companies in the US have not been producing fuel efficient cars, almost as if they were in league with gasoline companies and believed everyone would contine to be a douche and purchase a Hummer. According to fueleconomy.gov, a website I didn't make up, compact cars in 2000 were maxing out at 40 mpg on the highway, with many in the low- to mid-30s, while today, a car is touted as being "fuel efficient" if it can get 33 mpg on the highway. Even discounting the outliers, we've maybe gained 1 mpg in 8 years, tops.

It might be too late now for the car companies to turn things around. In a recent article in "Mother Jones", Ford said their car plants were not interchangeable; a plant designed to produce pickups could not be converted to make hybrids. Global economics work both ways. While corporations in America clamor to have market share, as well as factories, in other countries and pervade their culture, so too can Americans buy Japanese or European imports that are designed to not waste our money on gas. The "big three" car-makers have always been afraid of competition, however. In the early days of cars, when cable cars were still a viable public transportation option, some of the heads of car companies, using front corporations, purchased all the trolley lines and tore up the track. Their lobby was so powerful, they got the government to pay to pave roads and create highways, whereas the trolley and railroads paid for the tracks themselves.*

The "big three" would like $15 billion, in loans, so they can continue not making any real advancements in fuel efficiency and selling pieces of junk while moving factories and jobs overseas, all while the common man can't get a bailout or any financial relief. Corporations nowadays not only mistakenly have equal rights as people, they sometimes have more. This all dates back to when a court reporter defied his Chief Justice in a case involving railroad barons in the 1880s, and the memo the reporter wrote was basically turned into law and referred to in subequent trials, granting rights, rather than privileges, to corporations, but not other large groups of individuals (like unions, government, etc.). It's getting harder and harder not to get depressed.


*I think. In the interest of not being too misleading, I will admit I didn't research railroads or trolleys.