New Bailout, this time for Car Manufacturers. $25 billion, both parties in favor

KingCondanomation

KingCondanomation

New member
Disgusting and there is no question this time, that this would NOT cause a recession.
Both Obama and McCain approving.

"The House of Representatives on Wednesday approved a $25bn package of low-cost loans to help hard-pressed carmakers and their suppliers finance plant modernisation at a time of restricted access to public capital *markets.

The automotive loans are separate from the proposed $700bn bail-out for the banking sector, which is still being debated in Congress. The House approved the measure 370-58, setting the stage for Senate approval within days.

EDITOR’S CHOICE
US blue-collar workers look for bail-out - Sep-23Car dealers hit as loans splutter - Sep-12Ford and Chrysler back loan drive - Sep-17GM chief to lobby Congress on low-cost loans - Sep-12Age of the auto - Aug-06US bids farewell to era of Model T - Jul-23The industry’s case has been helped by the fact that Michigan and Ohio, the two states most dependent on the car industry, are key swing states in the November 4 presidential election.

Executives of General Motors, Ford Motor and Chrysler and their suppliers have lobbied heavily for the loans. Both presidential *candidates, John McCain and Barack Obama, have expressed support."
http://www.ft.com/cms/s/0/83bfe68c-8a8f-11dd-a76a-0000779fd18c.html

They just throw around money like it's nothing. So there are job losses for the big 3, I would hazard a guess there have been just as much job creation with Japanese car plants in the US.

I know this says "loan" but I doubt it will end up like that.
 
Watermark said:
I've been waiting a long time for GM to fail because they keep on making shitty cars.
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They won't all fail, if anything one MIGHT fail and so be it, companies failed all the time in decades past, not a huge deal and part of life.

We can't keep propping up every single domestic industry, what's next?
 
Actually, this particular deal was already made int he energy bill that passed last year. The deal that was struck then was that the $25 billion in low interest loans could only be used for certain discreet purposes relating to the automakers retooling older plants to help them comply with the heightened emissions standards in the energy bill.

The latest action loosens the restrictions on the uses of the loaned funds but does not provide an increase in what they would otherwise have received.



http://online.wsj.com/article/SB122229932759273247.html?mod=googlenews_wsj
 
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Dungheap said:
Actually, this particular deal was already made int he energy bill that passed last year. The deal that was struck then was that the $25 billion in low interest loans could only be used for certain discreet purposes relating to the automakers retooling older plants to help them comply with the heightened emissions standards in the energy bill.

The latest action loosens the restrictions on the uses of the loaned funds but does not provide an increase in what they would otherwise have received.



http://online.wsj.com/article/SB122229932759273247.html?mod=googlenews_wsj
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Yes I see that now in reading more. That's even worse then, the left has been pushing for greener cars and rather than let market demand push private investors to fund the retooling with an expected payback in sales, we have government stepping in and using taxpayer money.
This is wrong.
 
KingCondanomation said:
Yes I see that now in reading more. That's even worse then, the left has been pushing for greener cars and rather than let market demand push private investors to fund the retooling with an expected payback in sales, we have government stepping in and using taxpayer money.
This is wrong.
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You're clueless on this issue. Please just stop writing about it. You refuse to recognize the unpriced negative externality on fossil fuel consumption. You also refuse to recognize the public goods associated with higher CAFE standards. Without recognition of those two economic facts you're talking nonsense.
 
Dungheap said:
You're clueless on this issue. Please just stop writing about it. You refuse to recognize the unpriced negative externality on fossil fuel consumption. You also refuse to recognize the public goods associated with higher CAFE standards. Without recognition of those two economic facts you're talking nonsense.
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I recognize them just fine, but you don't realize that those negative externalities are not applicable to all areas and nor do I believe in restricting some freedoms based on other restrictions in freedom. Sure smog hurts people's health in LA, but:
1. Government should not be in the business of paying for people's health, because as noted it makes them feel some obligation to control the costs by restricting other freedoms like letting a free market decide what cars to buy.
2. MOST areas of America have no health problems from emissions because there is not enough population density.

Also you should note that it was only American manufacturers given the loans, Honda makes hybrids and would love a low cost "loan" (if that is what it ends up being) I am sure. But they are not getting the money, not because of your presumed green concerns over negative externalities but because it looks bad as a politician to not support your own national iconic car makers.

Oh and stop trying to act like some elite know-it-all who is above debating with the commoners in every single debate with anyone who challenges something you say. Yes we all get you pay attention closely to bills, that's great, I admire you for that, doesn't make your word the final say.
 
KingCondanomation said:
I recognize them just fine, but you don't realize that those negative externalities are not applicable to all areas and nor do I believe in restricting some freedoms based on other restrictions in freedom. Sure smog hurts people's health in LA, but:
1. Government should not be in the business of paying for people's health, because as noted it makes them feel some obligation to control the costs by restricting other freedoms like letting a free market decide what cars to buy.
2. MOST areas of America have no health problems from emissions because there is not enough population density.

Also you should note that it was only American manufacturers given the loans, Honda makes hybrids and would love a low cost "loan" (if that is what it ends up being) I am sure. But they are not getting the money, not because of your presumed green concerns over negative externalities but because it looks bad as a politician to not support your own national iconic car makers.

Oh and stop trying to act like some elite know-it-all who is above debating with the commoners in every single debate with anyone who challenges something you say. Yes we all get you pay attention closely to bills, that's great, I admire you for that, doesn't make your word the final say.
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Maybe you understand the concepts, i don't know. I do know that even if you understand the concepts, you cannot apply them for shit.

1) The point of the negative externality associated with fossil fuel consumption (like gas) is that consumers pay a lower price for the good than the true cost of the good. If the externality were priced into the cost of the good, it would cost a whole lot more to purchase it. However, politicians cannot (for practical purposes) increase the cost of fossil fuel consumption (the public wouldn't stand for it). What they can do is make the alternatives a bit cheaper. Hence the subsidies for conversion to higher CAFE standard cars.

2) Health has little to do with it.

3) American companies get the loans because they are American companies and because as far as political realities are concerned the bills would not have moved whatsoever without the low interest loans.
 
Dungheap said:
Maybe you understand the concepts, i don't know. I do know that even if you understand the concepts, you cannot apply them for shit.

1) The point of the negative externality associated with fossil fuel consumption (like gas) is that consumers pay a lower price for the good than the true cost of the good. If the externality were priced into the cost of the good, it would cost a whole lot more to purchase it. However, politicians cannot (for practical purposes) increase the cost of fossil fuel consumption (the public wouldn't stand for it). What they can do is make the alternatives a bit cheaper. Hence the subsidies for conversion to higher CAFE standard cars.
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Yes I'm aware of the sneaky approach to forcing people to be more green. There is no "true cost" of the good, the true cost is the market price, that MAY well result in increased cost in some other way, but you could say that about a lot of things, like donuts cost extra with diabetes healthcare costs.
It's a bad road to go down and in this case it's even worse because MOST areas of America the pollution from cars is so neglible that it costs nothing extra whatsoever. I live in the country and like any rural person, why the fuck should I pay extra for cars that emit less? It makes zero difference, even less when you factor in that more rural areas have trees that absord the meager CO2 output that is emitted anyway.
Small towns and suburbs aren't too different. It's only a few inner cities that this is really an extra cost and the right solution is to allow and set environmental laws for cities, rather than make it for all when most will pay extra for nothing in return.

Dungheap said:
2) Health has little to do with it.
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Sure it does, pollution is a negative externality and health costs result from that.

Dungheap said:
3) American companies get the loans because they are American companies and because as far as political realities are concerned the bills would not have moved whatsoever without the low interest loans.
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BS, they could just force the regulation and the companies would pay for it like they did in the past. I could care less whether some politicians need their arm twisted by details in this shitty deal. It's bad no matter the rate because government should not be in the business of giving out loans.
 
KingCondanomation said:
Yes I'm aware of the sneaky approach to forcing people to be more green. There is no "true cost" of the good, the true cost is the market price, that MAY well result in increased cost in some other way, but you could say that about a lot of things, like donuts cost extra with diabetes healthcare costs.
It's a bad road to go down and in this case it's even worse because MOST areas of America the pollution from cars is so neglible that it costs nothing extra whatsoever. I live in the country and like any rural person, why the fuck should I pay extra for cars that emit less? It makes zero difference, even less when you factor in that more rural areas have trees that absord the meager CO2 output that is emitted anyway.
Small towns and suburbs aren't too different. It's only a few inner cities that this is really an extra cost and the right solution is to allow and set environmental laws for cities, rather than make it for all when most will pay extra for nothing in return.


Sure it does, pollution is a negative externality and health costs result from that.


BS, they could just force the regulation and the companies would pay for it like they did in the past. I could care less whether some politicians need their arm twisted by details in this shitty deal. It's bad no matter the rate because government should not be in the business of giving out loans.
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There is indeed a true cost of a good and when negative externalities are involved the market price is by definition not in accordance with the true cost of the good. This is your fundamental misunderstanding.
 
Dungheap said:
There is indeed a true cost of a good and when negative externalities are involved the market price is by definition not in accordance with the true cost of the good. This is your fundamental misunderstanding.
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And what you can't grasp is that the so called "true cost" of a good is impossible to determine. Eating a donut may cause a negative externality for a fat person but not a thin one. Driving a car that emits more may cause a negative externality for an urban person but not a rural one. Going on the blank assumption that it always exists is more a symptom of thinking in relation to cost being a nationwide or public thing rather than an individual one.
The true cost is what the market pays, there is no guesswork cost to the common good factored in precisely because it may not exist. And on that basis (economic) freedom should not be restricted because of a presumption of it. Otherwise it drives up the cost for all (or reduces purchasing power) while only benefitting some.
 
KingCondanomation said:
And what you can't grasp is that the so called "true cost" of a good is impossible to determine. Eating a donut may cause a negative externality for a fat person but not a thin one. Driving a car that emits more may cause a negative externality for an urban person but not a rural one. Going on the blank assumption that it always exists is more a symptom of thinking in relation to cost being a nationwide or public thing rather than an individual one.
The true cost is what the market pays, there is no guesswork cost to the common good factored in precisely because it may not exist. And on that basis (economic) freedom should not be restricted because of a presumption of it. Otherwise it drives up the cost for all (or reduces purchasing power) while only benefitting some.
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I'm not interested in debating these points with you.
 
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