1. The Auto bailout is in the form of short term loans, the financial bailout is largely in the form of the government taking equity in the companies.
2. The financial firms proportional labour costs are clearly not taking into account the cost of the capital required to operate.
3. The financial firms losses are not due to the high cost of labour in subset A compared to subset B.
4. The financial industry has already begun a process of laying off huge numbers of people, and is ruthless and competitive enough that the necessary restructuring is already occurring. In many ways, the current problems facing companies in obtaining loans commercially are a direct result of this restructuring. The TARP is being used to slow this down.
Both the Republicans who were blocking the deal and the Democrats who were pushing it are doing so for their own political interests. Neither is really helping to do much about the fundamental problem with the big 3: they make cars that too few people want at a unit cost that is too high.
Comparing it to it to the partial nationalisation of the financial services industry is just plain wrong headed. The issue is much more complicated than Republican Financiers Bad, Democrat Car Manufacturers Good.
On a different note, the UAW is a horrible example of unionisation gone wrong. It functions as a labour cartel, often in it's own interests and against those of it's workers. This is common across many American unions.
At least British union nutters like Bob Crow have a political ideology behind them. ;)
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timeasmymeasure
AAPL vs ORNG
Date: 2008-12-21 11:50 pm (UTC)1. The Auto bailout is in the form of short term loans, the financial bailout is largely in the form of the government taking equity in the companies.
2. The financial firms proportional labour costs are clearly not taking into account the cost of the capital required to operate.
3. The financial firms losses are not due to the high cost of labour in subset A compared to subset B.
4. The financial industry has already begun a process of laying off huge numbers of people, and is ruthless and competitive enough that the necessary restructuring is already occurring. In many ways, the current problems facing companies in obtaining loans commercially are a direct result of this restructuring. The TARP is being used to slow this down.
Both the Republicans who were blocking the deal and the Democrats who were pushing it are doing so for their own political interests. Neither is really helping to do much about the fundamental problem with the big 3: they make cars that too few people want at a unit cost that is too high.
Comparing it to it to the partial nationalisation of the financial services industry is just plain wrong headed. The issue is much more complicated than Republican Financiers Bad, Democrat Car Manufacturers Good.
On a different note, the UAW is a horrible example of unionisation gone wrong. It functions as a labour cartel, often in it's own interests and against those of it's workers. This is common across many American unions.
At least British union nutters like Bob Crow have a political ideology behind them. ;)