Auto Bail Out?

[Balloon guy 158]

What if we just add huge tarriffs to foreign cars?I mean shouldn't the business of the government be to help American car companies first?Why should we allow our markets to help Japan in exchange for hurting ourselves?We could let the companies like Toyoto that have plants in America continue, but any foriegn made cars that are shipped in get HUGE taxes placed on them.This country is going to buy x amount of new cars this year.Tariffs would make the market share go American.Also force other manufacters build new plants in America, more American jobs etc.As an alternative to bailing them out

[CaneBrain 95]

What if we just add huge tarriffs to foreign cars?I mean shouldn't the business of the government be to help American car companies first?Why should we allow our markets to help Japan in exchange for hurting ourselves?We could let the companies like Toyoto that have plants in America continue, but any foriegn made cars that are shipped in get HUGE taxes placed on them.This country is going to buy x amount of new cars this year.Tariffs would make the market share go American.Also force other manufacters build new plants in America, more American jobs etc.As an alternative to bailing them out

because free trade is good. pretty sure that has been part of the bush mantra.

[copernicus 0]

What if we just add huge tarriffs to foreign cars?I mean shouldn't the business of the government be to help American car companies first?Why should we allow our markets to help Japan in exchange for hurting ourselves?We could let the companies like Toyoto that have plants in America continue, but any foriegn made cars that are shipped in get HUGE taxes placed on them.This country is going to buy x amount of new cars this year.Tariffs would make the market share go American.Also force other manufacters build new plants in America, more American jobs etc.As an alternative to bailing them out

if you dont have a better product to sell, protectionism ultimately just raises the price for both domestic and foreign goods.

[Balloon guy 158]

because free trade is good. pretty sure that has been part of the bush mantra.

I've never been a huge free trade guy, at least not unfair free trade.But I am curious why there seems to be no mention of tariffs on cars that come from countries that place tariffs on ours.I mean either we are a soverign nation and our elected officials should put our needs ahead of the rest of the world, or not.Plus I want to see Canada whine.

[Balloon guy 158]

if you dont have a better product to sell, protectionism ultimately just raises the price for both domestic and foreign goods.

I got to give you this one.Kind of amazing how behind the US car makers can be.Except Dodge trucks, by far the coolest trucks on the market

[CaneBrain 95]

Plus I want to see Canada whine.

always a bonus, eh.

[Jeepster80125 0]

you would be hard pressed to find many dems in general on this forum in favor of the auto bailout. I could live with giving some money to banks. it serves a purpose (if they had been forced to lend it to people....nice going paulson). giving money to auto companies that have sucked donkey balls for decades serves no purpose. does not help that the head honchos of the big 3 all took their G-4 jets to DC to beg for the handout. Where is alanis morrissette when you need her.

That's because there aren't any union auto workers around these parts. I'd venture to say no union folk either.What does that prove exactly?Obama's going to bail them out, they contributed to his campaign too much. He won Michigan right?

[FCP Bob 1,312]

What if we just add huge tarriffs to foreign cars?I mean shouldn't the business of the government be to help American car companies first?Why should we allow our markets to help Japan in exchange for hurting ourselves?We could let the companies like Toyoto that have plants in America continue, but any foriegn made cars that are shipped in get HUGE taxes placed on them.This country is going to buy x amount of new cars this year.Tariffs would make the market share go American.Also force other manufacters build new plants in America, more American jobs etc.As an alternative to bailing them out

because free trade is good. pretty sure that has been part of the bush mantra.

if you dont have a better product to sell, protectionism ultimately just raises the price for both domestic and foreign goods.

I've never been a huge free trade guy, at least not unfair free trade.But I am curious why there seems to be no mention of tariffs on cars that come from countries that place tariffs on ours.I mean either we are a soverign nation and our elected officials should put our needs ahead of the rest of the world, or not.Plus I want to see Canada whine.

Increasing tariffs and other restrictions on World Trade is the exact wrong thing to do right now. Look up the Smoot-Hawley Tariff Act and see how well they worked in the 30's.All tariffs do is make everybody poorer but especially consumers in your own country. Smart governments don't like protectionism.Canada and the US already have free trade in autos and parts and have for many many years. That's why the auto indurstries in both countries are totally integrated

[Nimue1995 1]

What if we just add huge tarriffs to foreign cars?I mean shouldn't the business of the government be to help American car companies first?Why should we allow our markets to help Japan in exchange for hurting ourselves?We could let the companies like Toyoto that have plants in America continue, but any foriegn made cars that are shipped in get HUGE taxes placed on them.This country is going to buy x amount of new cars this year.Tariffs would make the market share go American.Also force other manufacters build new plants in America, more American jobs etc.As an alternative to bailing them out

Cope beat me to it about the fact that Detroit has put out an inferior product for years. However of the big three Chrysler probably does the most with the fit and finish. We went looking for a car for our son who is in the Navy (he bought it but we scouted them out for him) and by far the best fit and finish in those cars were the Toyotas and Hondas. And Ford had the worst. Really tacky inside and out. Eventually he bought a Pontiac Grand Am which was older but their top of the line at that time. And I have to say that of the domestic cars out there, probably Pontiac is more competative on looks and price. But seriously, if any of you listened to the testimony yesterday by the big 3 executives, they are not all in the same place as far as needing a bailout. Pretty much Ford is in good shape followed by Chrysler which is also in decent shape. It's GM that's failing. So why are we discussing giving this money to all three automakers? And if GM fails or is taken over by one of the other two, is this really a bad thing? Do we really have the market share to support 3 domestic automakers? Wouldn't it be better to have 2 strong companies instead of 3 weaker companies? I realize that this means a great number of people out of work at a really bad time. But if they get the $25 billion doesn't this just put off the inevitable anyway? As far as I could tell none of the 3 executives really had a plan for the money except to keep on doing what they're doing now. And that isn't a viable option. And BG do you propose to put a big enough tariff on imports to offset the Big 3's legacy costs? Because that's pretty much what it would take. And considering the average wages that are paid the Big 3's employees compared with the average wages paid to the workers for Toyota in this country, it would probably even take more than that. I'm not crazy about NAFTA or free trade if it's not fair. Which means we shouldn't be at a disadvantage selling our product to other countries. But because of the higher costs the Big 3 have we will be at a disadvantage. And there aren't enough Americans looking for new cars to support that many automakers. You can't force people to buy an inferior product.

[copernicus 0]

Christmas cheer from Copernicus....pre Thanksgiving evenYour mortgage is lateYour gas tank is dry Have no fear I'm telling you why ‘Bama Claus is coming to town He's taxing the rich And taxing them twice; Spreading the wealth is gonna be nice ‘Bama Claus is coming to town He ‘ll tax them when theyre working He’ll tax them when they sellHe’ll tax them till there’s nothing to tax Welcome to socialist hell! Bailouts will comeTill the taxpayer’s dry The big 3 still failTheir product is why ‘Bama Claus is coming to town ‘Bama Claus is coming to town

[JubilantLankyLad 1,957]

Just saw Alanis last week. I realized during the concert that I have currently seen Alanis as many times as I have Motley Crue. (3) My penis died a little inside that night.

you have an innie?

[hblask 1]

I'm not crazy about NAFTA or free trade if it's not fair. Which means we shouldn't be at a disadvantage selling our product to other countries. But because of the higher costs the Big 3 have we will be at a disadvantage. And there aren't enough Americans looking for new cars to support that many automakers. You can't force people to buy an inferior product.

I mostly agreed with you until you got to this part about free trade, and the remainder that I left in explains why.In the end, the concept of "fair trade" is meaningless. The only exception I'd make is for countries that have, literally, slave labor. And no, I'm not talking about people making wages less than we make here, I'm talking about some people being the property of others in a legal sense or are slaves of the government.The concept of comparative advantage is not even on the radar of most people, which is why they support tariffs to help us compete. But all a tariff does is pushes the cost from the politically favored industry -- the one that got the tariff on competitors -- to politically unfavored industries -- the customers of the one that pushed the tariff through.If another country wants to put tariffs on our stuff, it is STILL the wrong move to "tariff them back". If a country wants to give us cheap stuff, that's a bonus for our economy, since we can now use the money we save on higher value items, items that are *more* profitable for us. It makes us even *more* competitive, since out cost of business is lower vs a company that has tariffs. And in the long run, which business wins, ones with low cost of business, or high costs of business? The answer is obvious. Even by *unilaterally* cutting tariffs, we make ourselves more competitive in the world and help our economy in the long run.And the reason is your final sentence: you can't force people to buy an inferior product.

[copernicus 0]

If another country wants to put tariffs on our stuff, it is STILL the wrong move to "tariff them back". If a country wants to give us cheap stuff, that's a bonus for our economy,

not if its dumped on us at lower than cost

[Nimue1995 1]

I mostly agreed with you until you got to this part about free trade, and the remainder that I left in explains why.In the end, the concept of "fair trade" is meaningless. The only exception I'd make is for countries that have, literally, slave labor. And no, I'm not talking about people making wages less than we make here, I'm talking about some people being the property of others in a legal sense or are slaves of the government.The concept of comparative advantage is not even on the radar of most people, which is why they support tariffs to help us compete. But all a tariff does is pushes the cost from the politically favored industry -- the one that got the tariff on competitors -- to politically unfavored industries -- the customers of the one that pushed the tariff through.If another country wants to put tariffs on our stuff, it is STILL the wrong move to "tariff them back". If a country wants to give us cheap stuff, that's a bonus for our economy, since we can now use the money we save on higher value items, items that are *more* profitable for us. It makes us even *more* competitive, since out cost of business is lower vs a company that has tariffs. And in the long run, which business wins, ones with low cost of business, or high costs of business? The answer is obvious. Even by *unilaterally* cutting tariffs, we make ourselves more competitive in the world and help our economy in the long run.And the reason is your final sentence: you can't force people to buy an inferior product.

NAFTA is a treaty. And in that treaty if we don't protect ourselves from having our products tariffed then where is the free trade in that? To me when the treaty was negotiated, this should have been part of it if it wasn't. And if we make trade treaties with any other country, the elimination of tariffs should be part of that trade agreement. I'm not saying to tariff them back. For one thing, it doesn't work. But we should demand a fair playing field through negotiation and treaties. And be willing to adhere to the same ourselves.

not if its dumped on us at lower than cost

This does happen and is responsible for many of our manufacturing industries failing. But instead of tariffs we should be doing what I pointed out above. We're a big enough fish in this pond that we can at least demand fair treatment for our products in other countries. Then if we fail to put out a superior product or even equivalent product then we deserve to fail.

[hblask 1]

not if its dumped on us at lower than cost

Sure it is, because then we save even more money on their unsustainable, stupid policies. Eventually they go bankrupt while we get rich. If your grocery store started selling milk for 5 cents/gallon, would that be good for you or bad? Obviously good, since you now have a higher standard of living. It doesn't matter what their cost is, only what you pay. Same with international trade. It doesn't matter how much it costs them to make it, only how much you pay for it. And then, when they go broke, we swoop in and steal their market share with all the extra money we saved in the meantime.

[akoff 0]

I'm willing to bet money that Buffett will never, ever buy one of the Big Three. Have you ever seen him talk about what things he looks for when he buys a business?In order of percentage stake:* Moody's Corporation (19.1%)* The Washington Post Company (18.2%)* Burlington Northern Santa Fe Corp. (17.5%)* American Express (13.1%)* Wells Fargo (9.2%)* The Coca-Cola Company (8.6%)He wants to invest in businesses with lots of cash and little debt. There is no way that Berkshire will buy any part of the big three.imo

You have valid point. He also likes to invest in tangible products that he can understand. I have heard him say that several times. Just a thought.

[hblask 1]

NAFTA is a treaty. And in that treaty if we don't protect ourselves from having our products tariffed then where is the free trade in that? To me when the treaty was negotiated, this should have been part of it if it wasn't. And if we make trade treaties with any other country, the elimination of tariffs should be part of that trade agreement. I'm not saying to tariff them back. For one thing, it doesn't work. But we should demand a fair playing field through negotiation and treaties. And be willing to adhere to the same ourselves.This does happen and is responsible for many of our manufacturing industries failing. But instead of tariffs we should be doing what I pointed out above. We're a big enough fish in this pond that we can at least demand fair treatment for our products in other countries. Then if we fail to put out a superior product or even equivalent product then we deserve to fail.

That's all fine, and certainly we should push the world for free trade, but the point is that free trade helps the country that is trading freely, and harms the one that is not. It doesn't matter to us if they tariff our stuff. Certainly it's better if they don't, but we don't always control that. We control our side, and it is always better to trade freely than to use tariffs for protectionism.

[Balloon guy 158]

I guess my question about tariffs was more with the thought that the auto industry will fail if something isn't done, would tariffs be a better alternative to a bail out?I don't feel tariffs as a rule are smart for many of the reasons stated.I just wonder why the elected officials in our government never seem to place our health and wealth above other countries.

[hblask 1]

I guess my question about tariffs was more with the thought that the auto industry will fail if something isn't done, would tariffs be a better alternative to a bail out?I don't feel tariffs as a rule are smart for many of the reasons stated.I just wonder why the elected officials in our government never seem to place our health and wealth above other countries.

I think tariffs instead of direct bailout just switches the problem from a direct and visible tax to an indirect and nearly invisible one.Forcing people to buy overpriced crappy cars when cheaper ones are available is just as bad for the economy as just taking that same money and sending it directly to the crappy car manufacturer. Maybe worse, because the tariff not only rewards the inefficient producer, it punishes the good one.

[vbnautilus 48]

I just wonder why the elected officials in our government never seem to place our health and wealth above other countries.

What's the point of wealth if you have to drive an ugly american made car?

[hblask 1]

I sent an email to my Congresscritters to oppose the bailout. I got a reply from one of them, and he seems to agree it's a bad idea, but won't shut the door completely. I think that means he wants to get some money for Minnesota before he agrees to it. And for the record, he did vote for the Welfare For Bankers Bailout, but said he couldn't help it because there was too much pressure on him to do so.Here's his letter:

Thank you for contacting me to share your views regarding potential Congressional action to address the faltering American automobile industry. I appreciate learning of your views. As you may know, three Detroit automobile manufacturers are seeking federal assistance to prevent a potential collapse. Initially, these automakers requested $18 billion in federal government loans to help them weather the market crisis. The request increased to $25 billion following federal financial assistance to Fannie Mae and Freddie Mac.While I share the concern of many Americans about the widespread economic consequences of a failure in the automobile industry, I do not support a taxpayer-funded bailout. American car companies have been losing billions of dollars each year - even when the U.S. economy was robust and car sales were at record highs. Poor financial decisions paired with crippling union contracts should not be rewarded by the federal government. While Congress took the necessary, but unpleasant, action of stepping in to rescue the national utility provided by our financial sector, we should not be in the business of impeding the very restructuring sometimes necessary to the health of an ailing business. As we have seen in other industries, bankruptcy can allow operations to continue while helping a business retool itself for a successful future. Members of Congress are considering a number of proposals to address the challenges facing the automobile industry - and all Americans. We will continue to investigate all options for the balance of the year and into the 111th Congress - and insist on the increased oversight and greater transparency that are critical to any meaningful solution. Thank you again for contacting me. Please feel free to do so again on any matter of importance to you. Sincerely,JOHN KLINEMember of Congress

[strategy 4]

I think I've read this whole thread, but I don't remember seeing a counter argument to the claim that no one would buy a car from a company in bankruptcy. anyone got a good one?

[copernicus 0]

Sure it is, because then we save even more money on their unsustainable, stupid policies. Eventually they go bankrupt while we get rich

In a capital intensive industry dumped products bankrupt or severly disrupt the domestic supplier, allowing the prices to be raised on imported goods. The dumping companies are subsidized and dont face the bankruptcy in your scenario.That has been the story in electronics and autos in the US for decades.

[strategy 4]

In a capital intensive industry dumped products bankrupt or severly disrupt the domestic supplier, allowing the prices to be raised on imported goods. The dumping companies are subsidized and dont face the bankruptcy in your scenario.That has been the story in electronics and autos in the US for decades.

all you had to do was say 'china'

[copernicus 0]

all you had to do was say 'china'

or Japan or Korea