Not a fair bailout for all?

[Flipx99 5,000+ posts]

Should the government pay for their reorganization? Either way the auto companies go, it's going to cost the taxpayers. Ford has been doing a good job turning around the culture of their company. They announced the release of the Fusion Hybrid that is suppose to get 41 MPG. The problem is, the Big 3 has been slow to react. In the 70's and 80's the japs rolled out the fuel efficient cars, and the Big 3's answer was the Pinto. Then the Big 3 got caught up in the SUV's, and were slow to answer with the hybrids.

It doesn't have to cost the tax payers, but it will.

 

[duece212 5,000+ posts]

Should the government pay for their reorganization? Either way the auto companies go, it's going to cost the taxpayers. Ford has been doing a good job turning around the culture of their company. They announced the release of the Fusion Hybrid that is suppose to get 41 MPG. The problem is, the Big 3 has been slow to react. In the 70's and 80's the japs rolled out the fuel efficient cars, and the Big 3's answer was the Pinto. Then the Big 3 got caught up in the SUV's, and were slow to answer with the hybrids.

So either way its going to cost the taxpayers should we just take our medicine now and let them go chapter 11? Or should we pump them full of taxpayer money only to have them go chapter 11 in the future because the "car czar" didn't strip the companies as lean as chapter 11 would have in the first place?

 

[newusername 10+ year member]

I don't really remember the time-inconsistency problem. It's something about having to commit to a policy without knowing if it will succeed. If they don't commit to the policy, inflation rates will be higher, but if they do commit to the policy, they run the risk of choosing the wrong one? Something to that extent.

 

[duece212 5,000+ posts]

I don't really remember the time-inconsistency problem. It's something about having to commit to a policy without knowing if it will succeed. If they don't commit to the policy, inflation rates will be higher, but if they do commit to the policy, they run the risk of choosing the wrong one? Something to that extent.

Sounds alot like the Iraq war, which turned out awesome

/tangent

 

[newusername 10+ year member]

A necessary paradigm shift is a necessary paradigm shift. Perhaps the transition would be slow or challenging, but it may be necessary.

I don't agree with all the Austrian stuff, but some of it is intelligent and logical.

 

[newusername 10+ year member]

Sounds alot like the Iraq war, which turned out awesome
/tangent

Yes, the argument is similar.

Bush has to commit to attacking Iraq, because terrorist activity may increase if he doesn't. Once he's committed, he can't change the plan because of the circumstances.

Something to that effect. Flip will correct us, if necessary.

 

[Flipx99 5,000+ posts]

I don't really remember the time-inconsistency problem. It's something about having to commit to a policy without knowing if it will succeed. If they don't commit to the policy, inflation rates will be higher, but if they do commit to the policy, they run the risk of choosing the wrong one? Something to that extent.

Pretty much.

Essentially, they should commit to a policy. The data is not known fast enough to react quick. A delayed reaction is worse than the "wrong" reaction. Furthermore, a consistant policy creates confidence in the markets.

What I am afarid happened though is that the market doesn't care about the Fed anymore.

 

[Flipx99 5,000+ posts]

A necessary paradigm shift is a necessary paradigm shift. Perhaps the transition would be slow or challenging, but it may be necessary.
I don't agree with all the Austrian stuff, but some of it is intelligent and logical.

I am more of a financial and mirco guy anyway. I dislike the ability to "test" in macro.

Physics may be harder, but at least you can have experiments that control for factors. Economists have to create a plan, implement a plan, and then hope for the best.

 

[newusername 10+ year member]

Pretty much.
Essentially, they should commit to a policy. The data is not known fast enough to react quick. A delayed reaction is worse than the "wrong" reaction. Furthermore, a consistant policy creates confidence in the markets.

What I am afarid happened though is that the market doesn't care about the Fed anymore.

Same thing as what happened with the Nikei: all the work the Japanese government did to stimulate the market did nothing. I think you might be right.

 

[Flipx99 5,000+ posts]

Same thing as what happened with the Nikei: all the work the Japanese government did to stimulate the market did nothing. I think you might be right.

Then what is the answer?

To be honest, I don't know. I hate that.

 

[Flipx99 5,000+ posts]

It reminds me of the terrible teens that are on mid day TV shows. The teens act out and the parents are basically helpless in controlling them.

 

[duece212 5,000+ posts]

Then what is the answer?
To be honest, I don't know. I hate that.

Thats where I'm at, and throwing money around willy nilly doesn't seem to be the answer. The only answer I have is we have been running at a non-sustainable level for some time here, and shits about to take a big downhill change, long term. I don't see an answer that will get us back to where we were and keep us there long term.

It reminds me of the terrible teens that are on mid day TV shows. The teens act out and the parents are basically helpless in controlling them.

Or like the weather, we can halfass predict it, we can see it coming, but we can't change it...we just ride it out and hope for the best.

 

[dcole18 5,000+ posts]

in my next econ class when we discuss the bailouts i think im just gonna print out Neal and Flip's poasts and read them out loud to the class...

 

[Flipx99 5,000+ posts]

Thats where I'm at, and throwing money around willy nilly doesn't seem to be the answer. The only answer I have is we have been running at a non-sustainable level for some time here, and shits about to take a big downhill change, long term. I don't see an answer that will get us back to where we were and keep us there long term.

Unless we have the rough equivalent of the Great Depression, something long and deep, people won't change. I was hoping the gas prices would stay high long enough to create change, but like I thought...the bottom fell out and "energy effeciency" goes to hell.

 

[Lugnutz 10+ year member]

in my next econ class when we discuss the bailouts i think im just gonna print out Neal and Flip's poasts and read them out loud to the class...

Hopefully you don't lose them like tracking numbers.