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12-12-2008, 12:44 PM #1
Plants outside the USA doing the work. Makes you wonder how serious of trouble they are really in.
Check out this video.
detnews.com | Webvideo | Ford's most advanced assembly plant operates in rural Brazil
12-12-2008, 01:21 PM #2
That is one of the reasons why Ford is the only company that does not need money at the moment.
Did you hear the end statement. "This is the type of plant that Ford would love to build in the US but the UAW won't allow it."
"Unions and socialists companies are the only ones that can say. "We won't allow it"
Remind me of the law that says that you have to allow your workers to form a union and eventually put you out of business because of their strangle hold on the company. Remember when I think it was Reagan that basically said that the air traffic controllers had to go back to work or lose their jobs.
Now. I am not just nicking auto workers but let me get this straight. You go to work at the same place everyday. Install with the help of automation the same kind of component for 25 years which after the first week you can do it with your eyes closed. Your salary is the equivalent of 78.00 an hour.
My goodness. Only in America.
12-12-2008, 01:28 PM #3
With the talk of the bailout the big 3 are getting a bit bold on their advertisements too you think?
12-12-2008, 03:40 PM #4
Chrysler has already been bailed out twice in years past going back to the 70s. And they now need a 3rd bailout?
Three strikes.........you're out Chrysler! You obviously didn't get it the other two times.
12-12-2008, 04:10 PM #5
They were bought out by Daimler (Mercedes Benz) a few years ago. It was a free-market transaction, not a bailout.
The main issue (problem) for all of the big three is labor unions.
12-12-2008, 04:28 PM #6
I'm not really feeling to sorry for Ford right now.
12-12-2008, 04:30 PM #7
Ted, what’s your definition of a “Socialist Company?”
The giant dung pile we are trying to dig out from began with Wall Street and the Banks (mortgage lenders), not the UAW.
It’s ridiculous to see our Republican Congressmen blame the auto unions and management when all this crap happened on their watch.
These are the same fat cats along with some idiot democrats who lent Volkswagen a half billion bucks to build a plant in the US. Go figure?
Nick, Chrysler paid every nickel of that loan back.
Teddy Roosevelt had it right and where is the next Teddy now that we desperately need him?
You want to see a disaster look at the Texas gulf coast nearly 3 months after Hurricane Ike.
But not to worry because we have FEMA, which stands for; Failure, Error, Mismanagement, & Arrogance.
Please don’t get me started!
Building Code/ Construction Consultant
12-12-2008, 04:41 PM #8
Does anyone really own a POS Chrysler anyway? Those vehicles have always been associated with the old people like grandma's or them soccer moms. Come on Jerry let off the steam.
12-12-2008, 04:57 PM #9
OK Tony, Does anybody out there have any memory of the reason given for the establishment of the DEPARTMENT OF ENERGY during the Carter Administration? Anybody? Anything? No? Didn't think so.
Bottom line . . We’ve spent several hundred billion dollars in support of an agency the reason for which not one person who reads this can remember.
Ready? It was very simple, and at the time everybody thought it very appropriate.
The Department of Energy was instituted 8-04-1977 TO LESSEN OUR DEPENDENCE ON FOREIGN OIL. HEY, PRETTY EFFICIENT, HUH?
AND NOW its 2008, 31 YEARS LATER, AND THE BUDGET FOR THIS NECESSARY DEPARTMENT IS AT $24.2 BILLION A YEAR, THEY HAVE 16,000 FEDERAL EMPLOYEES, AND APPROXIMATELY 100,000 CONTRACT EMPLOYEES AND LOOK AT THE JOB THEY HAVE DONE!
THIS IS WHERE YOU SLAP YOUR FOREHEAD AND SAY 'WHAT WAS I THINKING?'
Ah yes, good old bureaucracy. And now we are going to turn the Banking system over to them? God Help us.
Building Code/ Construction Consultant
12-12-2008, 06:43 PM #10
The problem *is not* that the Big 3 need a bailout, the problem is that they *did not ask for it first*.
They let the banks ask for it first, so everyone said "Sure, here it is, here is $700 BILLION!
The Big 3 are only asking for $25 billion ... but they waited too long to ask for it.
Think about that:
$700 BILLION or $25 billion ... which would you rather have done?
BOTH ARE TO BAIL OUT MIS-MANAGEMENT, so there is no difference, except that the banks money does not seem to be getting down to Main Street, it seems to be staying in the banks, at least with the Big 3 the money would actually do some good.
You think there is high unemployment now? You think inspections are bad now?
Think about if just both GM and Chrysler go under, wait, think if just GM goes under.
The UAW needs to think about that offer, and put it to a vote of the membership. Then the membership needs to be made aware that *if they vote the deal down*, *there will be NO unemployment compensation paid to them*, because, after all, it was *their choice* to stop working, right?
12-12-2008, 06:53 PM #11
Re: FORDIt Might have Choked Artie But it ain't gone'a choke Stymie! Our Gang " The Pooch " (1932)
Billy J. Stephens HI Service Memphis TN.
12-12-2008, 06:58 PM #12
Last edited by Kevin Barre; 12-12-2008 at 07:03 PM.
12-12-2008, 06:59 PM #13
12-12-2008, 07:04 PM #14
If the big 3 go under the UAW union Boss Guys Will need a new gig. they may look around and say Lets start the "HOME INSPECTOR'S UNION"
Just think we could have Health insurance. vacation pay, A complaint Box.
A suggestion box. 15 min breaks, 1/2 HR lunch And a union rep to keep things in order. get off work at 3:30 and overtime pay. pullen down HAWG LINE PAY. and if times get slow we could get a bailout.
No more up past 11:00 PM Working on reports...
Last edited by Ron Bibler; 12-12-2008 at 07:22 PM.
12-12-2008, 07:05 PM #15
The *members* need to be given fair warning, then let the chips fall where they will.
As it stands, the UAW Big Shots killed it, the UAW never votes on on anything that fast, not when it is a membership vote.
I can see the UAW saying: "Hey, guys, you know that we don't have enough in the strike fund to pay ALL OF YOU for 2-3 years, right?"
12-12-2008, 07:14 PM #16
Socialist countries but I said socialist companies. Either way it sounds the same.
Wasn't trying to get anything stirred up by any means. Shoot you don't even have to go to school or anything to slip that dash board thru a window hooked to a mechanical arm that guides it right in place. Hmmm. 78.00 an hour. in 1988 the same ford I bought then cost about 20,000 more today. loaded 3/4 ton with all the goodies.
Its a sad state of affairs when we pay robots 78 an hour. The auto workers don't want to deal. Lets see. We gamble with our money to make sure that the auto workers get there vacations, medical, dental, optical sick days, vacation days and retirement. Wouldn't you like the money that the gov is gambling on lending companies that might still file bankrupts anyway and put it toward your retirement, vacation days, sick days, medical, dental, retirement, optical etc plus and dam good wage to boot.
Sorry. I am not picking on an individual , just the whole concept. If the companies fold then the renegotiations will start. The companies will come back anyway but hopefully to a more equitable means. I belonged to a union once upon a time. Every meeting was all about more money, more bennies, more time off, more vacation days. When I was no longer union and I bid on jobs in Boston (and made good money along with my men) and then got the jobs the union folks were picketing outside the entrance to those jobs calling we non union hard working excellent wage making folks scabs because they lost the bid. They were actually saying we did not have the right to work these jobs because this was a union area. Where is your boss hiding, send him out, we want to talk with him.
GM was boasting that they sold 11,000,000 cars more than Toyota. Hmm. Toyota does not need a bail out and they sold far less cars. GM lost what, who knows, hundreds of millions if not billions. Toyota made more than GM after GMs loss. Something is seriously wrong there. Employees get to much. Middle management makes way to much and upper management makes ridiculously sickeningly to much. Maybe that could be the problem. Yeah think?
No company can live under that tremendous amount of financial strain.
Oh well, enough of that.
12-13-2008, 06:15 AM #17
Now Rick, don't be disgruntled. One little fire.........geesh.
12-13-2008, 06:25 AM #18
Wonder where the smiley went on the last one. Hmmmm
Anyway, I read last night where the UAW refuses to take any concessions along with the bailout. Lets see, there are a ton of unsold vehicles all over they can't sell,, the banks don't want to lend money, dealers have gotten to the point of offering buy one, get one free, which means if they do bail them out, and they produce more cars, who's going to buy them. We have stores, banks, factories, etc closing, laying off, and in general reducing the market overall, for all products. Seems to me they should take a cut and be happy they even have a job at all.
12-13-2008, 01:10 PM #19
12-13-2008, 01:22 PM #20
12-13-2008, 03:59 PM #21
As for "$73.00 dollars an hour":
Do UAW workers make $73 an hour? Does it matter? - BloggingStocks
12-13-2008, 05:37 PM #22
The article is pretty much what I thought it was when I started to read it. Break it down anyway you want. Per worker it in in the 70s. Lets not mention the fact that the us auto maker sell millions more vehicles. Take those millions of vehicles and what do you get.
What do they call a comperable vehicle. Also if the general public finds them to be crap then why do they buy so many. Walmart sells their goods cheaper, they make billions becasue of gross sales. If the retirement is a fixed figure then it is still getting paid for same with medical and vacation pay. It all goes to add up to the total.
The toyota plant pays about 48 ph for their employees. The big three pay in the 70s. Break it down anyway you want. Money is money. Also the management gets paid less in the toyota plants. I am talking US toyota. If they want comperable wages and bennies then let them have is. It will be 30 gross per hour. Wages and bennies cut into realistic levels. I did not read it anywhere that an assembly line person had to make such wages and bennies. It is the unions with their pay check writers lower section that is driving the massive costs up and with that driving middle management cost up and then driving top mangement costs up. In the unions case, crap rolls up hill.
I just read that GM is cutting its production by a 1/4 million units this coming year. It is amazing that so much money by the millions of vehicles goes out the window along with the profits in a heart beat. What ever happened to the concept of a decent wage for a decent days work.
I hate myself for bashing folks for wanting it all and wanting it now but things have gotten so far out of control it is sickening.
Look at this as well. GM has how many millions of shares of stock on the market. Right there is a serious amount of capital that they have to work with that is suppose to help them make the proffit. So that means they had x profit and x investment money to work with and they are still going down the tubes but in the mean time everyone working for them are making out like bandits. Where is all the profit. Where is all the money invested. They knew the market was slowing down ages ago but they continuosly built more and more cars and now ther is a serious glut they cannot sell. They should have cut back on employees and production and parts ordering as well as mangement a long time ago.
Let me see. The US is in the biggest financial crunch, in what, how many decades (ever) but the UAW wants their goodies for the worse 2 years coming and they want their bosses to get a bail out that may not be able to be paid back.
Size it up anyway you want it still comes to the same thing. A joke. The joke is on the rest of the populous.
Why is it that article tried to word things to such a way where people reading it would think differently than what it really is?????????
12-13-2008, 06:33 PM #23
As Ted said, the costs are what they are. Compensation is compensation, no matter whether it is direct salary, pension, or other benefits. But let's assume that the OPINION of this blog writer is at least supported by facts. To use his numbers, the big 3 spend $800 more per car on labor costs. For now, we'll ignore the $2,500 less that the car sells for, and assume that the dealer takes a share of that hit. Maybe they do, maybe they don't. I don't know. But ignore it for now.
Does anyone have any idea how much "quality improvement" could be purchased for $800 a car? It's tremendous. It might not be a huge percentage of the sales cost, and it would be easy for a car buyer to dismiss the importance of this because it seems like a relatively small amount of an average new car, but you have to think about the economies of scale at work here. The fact is that it could buy a huge improvement in engineering or materials. When you're building cars by the millions and watching every cent, the tendency is to save a buck everywhere you can. Just so we're clear here, I am not suggesting that painting a glove box door or similar item is a quality improvement; it's not. But let's say that you are considering two different transmission designs: one that has a projected life of 100,000 miles and one that is expected to go 200,000...and the cost differential is only $20. Might sound silly, but that's often what it boils down to. As a manufacturer, which do you choose? That $800 seems a lot more important now, doesn't it? Imagine 40 items like that which you could similarly improve.
I remember reading one of the car magazines several years ago talking about the push to reduce costs per vehicle. I forget the specifics, but among other items, they mentioned that an analysis showed that about a dollar a car could be saved by not painting the back side of the ash tray (or the glove box door, I forget which) to match the interior--they would all be standardized in black. Think about that...a dollar saved times millions of vehicles for that one small item. Similarly, the trunk carpet was standardized to be black, regardless of the interior color. Similar savings. The point is that they were literally talking about a dollar here and there per car. Now imagine what they could do if they effectively had an additional $800 to devote to improved engineering, components, or materials on every car. The effect could be enormous. Now, let's revisit the "lost" $2,500 per car due to lower sales prices. Even if the dealer absorbs half that cost, there's an additional $1250 that the manufacturer can devote to improving that product.
Admittedly, not all that money would go to bettering the product. Some would necessarily go to profit, as it should be. Some money in the bank is needed to ride out the lean times. In theory, all prudent corporations try to do this. If all the profits went to ridiculous management pay, bloated managerial staffs, or absurd union demands nothing would be gained.
Last edited by Kevin Barre; 12-13-2008 at 06:46 PM.
12-13-2008, 06:57 PM #24
$73 Dollars an Hour does it really matter?
73 x 40 x 52= $149,760
Average US median Household Income = $50,233.
Auto Worker monthly income = $11,680 X 2 if Husband & Wife are Auto workers.
Average Median US monthly income= $3,864 includes if both in household are Employed.
And they wonder why the average person in the US can not buy their product?
The US Steel Industry can attest this level of benefits does not sustain a competitive, viable nor long term business model.
It Might have Choked Artie But it ain't gone'a choke Stymie! Our Gang " The Pooch " (1932)
Billy J. Stephens HI Service Memphis TN.
12-13-2008, 07:49 PM #25
Do I hear an Amen
12-13-2008, 08:04 PM #26
Maybe the UAW does not understand that what is being discussed *is not a recession in 2012, but the one right here, right now in 2008?
UAW says make us rich for the next two years, then we'll talk ... um, guys, keep that stance and in 2009 you will be in the bread and soup line.
In my opinion, ALL those CEOs of all the companies which lose money, lost money, go bankrupt, etc., should repay all bonuses for the previous year before losing money, going bankrupt, etc., and for each year while losing money, in bankruptcy. *IT IS THEIR FRIGGIN' JOB* to avoid those things, and they get bonuses for losing money?
12-13-2008, 08:11 PM #27
I will give you an Amen and a Happy Christmas on that
12-14-2008, 04:46 AM #28
Don't even get me started on the CEO's...............read the other day about some CEO that got a multi million dolar bonus. Workers are probably getting min wage, company's profit? who knows, but as long as the big kahuna gets a ridiculous bonus, everythings good. Really sad part is, most of these guys get an outrageous bonus even if they totally destroy the company and end up fired.
12-14-2008, 07:10 AM #29
I'm not defending the current practices of the UAW or the auto company executives.
A few years back I was watching the F150 assembly line it operation in Detroit.
Many parts (in this case front bump trim) are delivered to the line on special cradles intended to protect them from damage - a lot of work and though goes into every step of the process to insure that they are in good condition when installed.
I happened to watching this step of the process when the shift ended, the worker installing the trim didn't bother to finish (around a 30 second operation) - he just stopped and midstride and tossed the trim casually back onto the cradle - even where I was standing 50 feet away you could see a big scratch. So this worker had just completely negated the efforts of everyone prior in the production and transport process for this part.
And union work rules would've made it very difficult to discipline or fire him for this action.
And that's one reason I think that the big three manufacturers - at least in such plants - are cooked: it's going to be almost impossible to maintain reasonable levels of quality control if the workers have to take big pay cuts.
But... it's also important I think to accurately report understand what's happening in that segment of the industry, and that includes the actual results of negotiations and the actual realities of financing, for example it's highly misleading in any industry to roll pension and health-care costs for retired employees into the paychecks of current workers as though they are seeing that money on their pay-stub.
I'm also always a bit surprised by the depth and intensity of anti-union feeling amongst working class Americans - even the self-employed.
Make no mistake about it: the people running large industrial organizations in this country would be happy to reduce their workers the status of near serfs if possible, if they had their way we would be back to George Pullman's company towns, or perhaps something even worse. And just as much of the noble talk by union officials about protecting the working man is the pure cant of well-paid fat cats, statements by the CEOs of large corporations that actually give a damn about the working conditions and life prospects of their employees are usually pure cant as well - they are incentivized to cut costs any way they can without concern for the long-term prospects of either their companies or their employees.
In this situation unions aren't pretty, but they represent the only effective bargaining strategy employees have other than simply quitting their jobs - this isn't good for the employees and their families, but what's often overlooked is that it's ultimately not good for the businesses they work for or for long-term economic prospects of the country, either.
Every industrial country is faced with extreme competitive pressures from lower-cost external producers, with aging workforces which require increasingly expensive benefits post retirement, and with the problem of adequately accounting for externalities such as environmental damage (and whether you believe in "global warming" or not . there are plenty of completely uncontroversial environmental impacts from any production process, no matter how well designed and conducted).
In the situation. when times get tough there are huge competitive advantages to having a structured situation in which "capital" can negotiate with "labor" across large sections of the economy in a uniform manner.
For example when the Dutch had their backs against the wall economically in the early 1990s it was possible for the government to sit down with "management" and "labor" and apportion the pain of the economic sacrifices in a manner that while it did not make anyone happy at least left nobody feeling they were getting screwed worse the other side. The result was the Dutch "economic miracle" in last decade of the 20th century.
No way we can do that here; instead we end up with a hodgepodge of local and state regulations and plans and national "recovery programs" that are largely about political logrolling to insure that each congressional district and state gets its "fair share" of the bailout pork.
12-14-2008, 10:10 AM #30
It would be interesting to know just how many UAW members drive cars made by Ford, Chrysler and/or GM? I would argue the fact in which folks blame the UAW for failure of the American auto industry. Wasn’t it not corporate management who made the decision of what type of car regarding size, style, MPG, color, etc., that they would produce and how much they should sell for? I don’t think some moron installing front bumpers every working day for 25 years was consulted on any of those choices? Kill the trade unions and you will get guano products. Just look what has happened to our home building industry and who knows better than us why all brand new homes desperately need inspecting and I don’t mean by the local AHJ!
Building Code/ Construction Consultant
12-14-2008, 11:01 AM #31
Has anyone else heard that this is NOT strictly a US problem but that auto makers world wide are having trouble and are asking for help?
There is a world wide economic crisis and many of the automakers are struggling.
IMO there are too many automakers producing cookie cutter cars for an ever shrinking demand as the price of money and energy goes up and the supply of both goes down.
It won't be pretty, but the weak need to be culled from the herd.
Auto giants humbled by global turmoil - Worldnews.com
Toyota likely to report loss in second half - Worldnews.com
Last edited by Jim Luttrall; 12-14-2008 at 11:11 AM.
12-14-2008, 11:56 AM #32
Collective Bargaining is one thing Strangling The Golden Goose is what has (is) happening.
1.Steel Industry *see the results in Penn.
2.Tire Industry * as seen nation wide with closed manufacturing plants.
3.Electronics * TV's, Microwaves , Lighting ect. *Devastated Small Town USA with VAST EMPTY Manufacturing Facilities.
4. Clothing * see #3
5. Footwear *see #3
6. Farm Machinery * International Harvester as an example of what a Union can accomplish.
7. Your Local Government * Disciplinary & Review Boards, Work Policies, Time off with pay, pensions all taken from "The Union Model."
Tax Payer Dollars to continue The Life Style I Have become Accustomed Too.
It Might have Choked Artie But it ain't gone'a choke Stymie! Our Gang " The Pooch " (1932)
Billy J. Stephens HI Service Memphis TN.
12-14-2008, 12:54 PM #33
So Billy, who should we blame?
Certainly not our local city, county, state, and national government’s elected officials?
The problem is very complicated, nay convoluted, but it can still be reduced to a single simple sentence; "the American people have lost their will."
Will Rogers had it right.
Building Code/ Construction Consultant
12-14-2008, 03:56 PM #34
12-14-2008, 04:13 PM #35
On Friday, my wife made it through downsizing in her department. 7 out of 15 people in her department at the corporate building for XXXXXX (her company) are now gone since Friday and over 100 people from a few other departments were let go just recently. Many more to come soon.
We are talking about the automotive problems but many more people are having problems and if people keep getting laid off or are scared to spend because the chance of being laid off, who is going to buy those cars anyways?
12-14-2008, 08:21 PM #36
It's truly an international problem, and one of the scary things is that in many ways we have fewer resources to solve it than almost any other major industrial economy.
For example the US compared to the rest of the developed world is a free-market paradise: Americans work longer hours than workers in any other western industrial economy, employers are freer to fire workers in any other western industrial economy, it's much harder to organize and maintain unions in America than in any other western industrial economy, workers are provided with a far lower level of guaranteed benefits benefits (health care and retirement, for example) than in any other western industrial economy, management is free to pay itself much higher salaries relative to other workers in the organization and to pay lower taxes on those earnings than any other western industrial country, the level of business regulation is lower than in any other western industrial economy, and corporate income taxes actually paid (as opposed to theoretical rates) are lower than in any other western industrial economy.
If these are conditions that produce higher productivity, the US should be dramatically more productive than the other western industrial economies, but in fact we are only modestly so, and much or all of that productivity advantage probably results from other factors such as our relatively large, homogeneous domestic market.
Meanwhile, we've achieved this level of productivity only at the expense of the factors noted above - other Western industrial economies have the option of increasing working hours, increasing labor flexibility, decreasing union power, decreasing publicly provided benefits, decreasing management compensation relative to workers or decreasing individual or corporate taxation - we on the other hand don't have that opportunity, because for the most part we have already largely maximized our ability to any of these things.
And that to me is a pretty scary thought and a pretty strong indictment of the way we've chosen to organize our affairs: the people at the top have squeezed just about everything they can out of everyone else - they managed to capture virtually all the productivity gains of the last 25 years while everyone else's inflation-adjusted income has on the average remained almost flat or declined - and we still aren't radically more productive than our competitors in mature European industrial economies, let alone those in Asia - the people at the top have skimmed off the profits of what has increasingly become a gigantic scam, and despite all the advantages that management and large-scale organizations have in this society they still haven't been able to radically outstrip the productivity of competitors who provide much higher levels of job and personal security than are available to American workers.
12-14-2008, 08:28 PM #37
Billy J. Stephens HI Service Memphis TN.
12-14-2008, 08:54 PM #38
I always look at the good side of a man and if i see that a man has got rich by his hard work good for him... In our country we have more new rich people in this generation then at any other time in history...
America is the best place to live.. I do not want to live in EUROPE...
12-14-2008, 09:03 PM #39
I'm thinking of a Start-Up Company with franchise opportunities.
Billy J. Stephens HI Service Memphis TN.
12-14-2008, 09:31 PM #40
You think you can make a buck with that price Billy?
12-15-2008, 07:05 AM #41
and only in the USA Can a man start up a company and become rich from his hard work.
A somewhat myopic view point. I don't want to live in Europe either, but to claim that USA is the only place you can open a business and become rich is kind of absurd. We do pretty well, but we're not even top five anymore in the global freedom scales.
Check out the 2006 global rankings. Interesting stuff.
Rankings: The 2006 State of World Liberty Index: Free People, Free Markets, Free Thought, Free Planet
BTW, the most recent stats on worker productivity did indeed have the USA as the most productive country as measured by productivity per employee.
New Mexico, USA
12-15-2008, 07:21 AM #42
In fact "economic mobility" - the measure of how much better or worse than your parents you do economically - is higher in much of Western Europe and the United States, primarily because educational opportunities are more equally distributed. It is true that the business environment is different there - it's more difficult in terms of regulatory requirements to start a small business than here - but the rate of small business formation is still quite high, and small businesses in Holland, for example, have a failure rate about 1/5 of what it is here.
And for that matter, you have to be careful about the assumption that any economy in which you can get rich "by luck and by pluck" is automatically a desirable economy to live in.
An extreme but instructive example is the old USSR under communism: an ambitious young man could join the party, work his way up, and end up with a standard of living enormous higher than the vast majority of his fellow citizens, who were told that the party represented a meritocratic elite opened to everyone, and that in any case life was better for everyone else in the "workers paradise" than in the rest of the world - a world about which the government found it convenient to keep the citizens in a state of patriotic fervor and blindly chauvinistic ignorance.
Of course, the advantages became largely hereditary, with the children of the elite having preferential access to superior educations and inside track when it came to looking for a job within the party organization.
Still, exceptional talent and hard work could to get you the very top irrespective of where you started.
Unfortunately as the system's performance increasingly failed to match the expectations set by its ideology, a lot of the work done by the elites consisted of paper shuffling, inefficient management, favoritism, nepotism and simple-minded ideological cheerleading - until eventually the entire economic edifice consisted largely of systematic and widespread fraud abetted by a policy of official optimism about the progress being made, followed by a series of government bailouts of inefficient state industries whenever things collapsed so badly that mistakes could no longer be hidden.
(Of course, this is entirely different from a hypothetical market economy where some drunken wastrel might get into an elite educational institution by dint of family influence, acquire an impressive sounding official credential, fail in business, "join the party", rise to a position of great influence and then preside over an economy where large numbers of the self-proclaimed meritocratic elite waxed fat off paper shuffling, inefficient management, favoritism, nepotism and simple-minded ideological cheerleading - until eventually they created an economy constructed largely upon systematic and widespread fraud abetted by a policy of official optimism about the progress being made, followed by a series of government bailouts of inefficient industries whenever things collapsed so badly that mistakes could no longer be hidden. All the while of course telling the vast majority of workers that they were living in the best of all possible economic worlds despite the fact that economically everybody but the elites had been standing still or sliding backwards for decades, meanwhile encouraging the same workers to remain in a state of patriotic and chauvinistic ignorance about how the rest of the world actually lives.)
So perhaps a system which allows a few percent of its citizens - some "deserving", many not - get their hands on the winning lottery ticket while everyone else leads a life of economic stagnation or worse is not automatically a good place to live. And while today's USA is certainly not the old USSR , all systems which are evolving toward increasingly advantaged positions for their elites (which seems to be the natural state of the human condition, except as interrupted by periodic revolutions or major political reform, warfare, or economic catastrophe) do have many features in common, and certainly more a more features in common than their leadership would like their citizens to suppose.
Now, in the eyes of most foreign observers I've met Americans have a tendency to romanticize the possibility of "winning big", and that's fine as long as you have a realistic appreciation of what your chances are, and how those odds stack up compared to other economies.
And until quite recently, the actual performance of the economy has provided credible reasons for Americans' famous "optimism" about their chances and more important about their childrens' chances: for a long stretch from about 1950 until about 20 years ago it was the case that for the majority of citizens their childrens' prospects were better than their own.
This progress underpinned the social and political deal between the elites and everyone else in this country since World War II, which is predicated on voters' assumptions that if their children worked hard and played by the rules they would likely lead better life than their parents, and have a real chance of being one of the big winners.
However starting about twenty years ago something changed, and changed dramatically: for all but a few percent of wage earners at the top of the economy real income has been essentially flat or declining, this despite the fact that this has been a period of of impressive productivity gains across economy as a whole.
Worse, even though access to the elites is becoming more meritocratic (for example the entrance standards at elite universities have become much more stringent and fewer students enter as "legacy" selections) it is also becoming increasingly economically restricted as college costs rise and the educational credentials required for entry to the kinds of jobs likely lead to elite and highly paid positions keep increasing. (And don't kid yourself, in this country the most reliable road to great riches is not to start a small business and grow it, it's to obtain an elite education and network within the elites to obtain access to highly compensated corporate executive and professional partnership positions, then leverages sophisticated entrepreneurial talents onwards from there).
In this period of widespread income stagnation many Americans continued to aspired to the things our society values in place of the things that most other Western industrial societies value: bigger cars: bigger houses, and bigger plasma displays instead of a social safety net limiting not only the possibility of "deserved failure" but of undeserved personal economic catastrophe.
And many financed it, in a period of stagnant wages, by extracting equity from their homes (aided and abetted by irresponsible politicians of both parties and some truly creative elite paper shuffling) or simply by borrowing.
Now we're largely a nation of large vehicles consuming large amounts of imported petroleum produced by people who would largely like to wipe us off the face of the earth, living in large new houses (on which it's estimated by the end of the year about 10% of their owners have been or are in default on their mortgages) containing ever larger plasma and LCD displays, purchased from Asian producers largely with recycled dollars paid for consumer goods which will be in a landfill in 10 years and thereby allowing the Chinese to buy oil leases for the next 50.
We need to be really clear about this: we live in a land of big toys and much greater economic and personal risk than most other Western industrial societies, financed by an imploding and economic system with such destructive capacity that it threatens to take the entire world economy down with it.
If we want to we can persist in a patriotic chauvinistic contempt for the choices other people make, and a valorization of our own, and insist in the face of evidence and perhaps impending economic catastrophe that by golly, this is the very best system on the face of the earth, and were lucky to live here, and it couldn't be made any more reasonable, or any fairer, and above all else we have absolutely nothing to learn from the experience of people elsewhere or how they go about solving similar problems, or heaven forbid what can happen if you let these tendencies run absolute riot a society.
If we want to we can live in a country where we work harder than anyone else for fewer benefits than anyone else in major countries the Western world, with a greater chance of personal economic catastrophe, in order to devote a greater and ever-increasing proportion of our national economic output to supporting the lifestyles of an increasingly corrupt and incompetent political and economic elite, in return for a smaller actual chance of economic mobility and a better life for our children than many other places.
And if we want, we can ask "Please sir, can I have another helping?" - buy the claim that any possible change or improvement that increases the actual life chances of the vast majority of the population is "socialism", pretend that we are in Thatcher's England of powerful labor unions, oppressive government regulation and ruinous levels of taxation, and that somehow if we just do the same things we're doing now that aren't working, only do them harder, they will somehow work better than they are now.
Problem is, eventually "if things can't go on forever, they don't" - and it appears we are reaching "don't" both economically and politically (as in "my children don't have much chance of leading a better life than I do").
And what that tells me is that the political contract between the elites and everyone else has broken down in fundamental ways, and that over the next decade or two we are likely in for some fundamental changes to improve equality of opportunity such as guaranteed access to basic medical care, improved access to education, improved physical infrastructure and increased regulation of financial chicanery and excess - in short a whole bunch of things that have been found when tried elsewhere to improve the results of capitalist market economies for most citizens, and which a lot of the people here who despise them will find quite reasonable and in fact absolutely necessary once they exist in our own.
Last edited by Michael Thomas; 12-15-2008 at 07:45 AM.
12-15-2008, 08:26 AM #43
Dam!!! I think we just joined with EUROPE...
One world / One country. Good by USA.
12-15-2008, 08:29 AM #44
For example most of upper management at the organizations originating sub-prime mortgages certainly knew - or ought to of known - that there was large-scale misrepresentation and fraud at all levels during the origination process at the organizations they headed - for example those of us who were inspecting these properties knew it two or three years before the bomb hit.
Many of these executives became rich, and a few became enormously wealthy, as a result of looking the other way as origination fees from fraudulently obtained loans flowed onto the balance sheets at organizations they were steering toward the rocks, but few if any face prosecution for their participation in a large-scale criminal conspiracy that is causing enormous direct and indirect financial loss to everyone else.
If it was discovered that your or I had looked the other way while a bookkeeper under our supervision perpetrated even a minor embezzlement from a company where we worked we would be facing almost certain criminal prosecution - such crimes are aggressively prosecuted as a deterrent to others.
However just as there are some businesses that are "too big to be allowed to fail", there are some some sorts of financial crime that when conducted on a grand enough scale by a large enough number of people at a high enough level are "too big to be prosecuted".
12-15-2008, 08:43 AM #45
12-15-2008, 09:16 AM #46
Or - to take an example closer to home - there is a great difference in how heavily mortgage lending is regulated in the United States and various European countries, the countries with the "freer" markets in this regard have been the ones that have recently are taken the worst hits in their housing markets.
As for productivity numbers, it's more useful to look at output per hour worked, rather than output per worker. For example if an employee at my plant puts out 10% more product than and employee at yours, but employees at your plant work an average of 20% fewer hours than employees of mine, I have a productivity problem relative to the higher standard your workers are setting.
Also, in terms of international competitive advantage, it makes a lot of difference which sectors of the economy your are measuring. For example productivity when creating tradable goods such as tractors is much more important than productivity in non-tradable service sectors such as flipping burgers ( though it might matter indirectly if the Starbucks Barista in Stuttgart is more productive than her counterpart in Seattle).
When measured this way American workers in many critical sectors are still the most productive in the world.
But the interesting thing is they are not radically more productive.
If the kind of system we have here: low effective taxation, low levels of unionization, high labor flexibility and mobility, lower levels of bureaucracy and regulation and the like were as powerful spurs to innovation and productivity as often claimed by its proponents, we should be far outstripping our competition.
However our productivity advantage ( it seems to me, and more important to a lot of economists ) is relatively minor compared to the scale of these differences between the US and other advanced industrial economies - you either have to assume that such factors are not as important as many Americans assume, or that they are important but that American labor and/or management is so uniquely lazy and/or incompetent compared to their international counterparts that all these other factors can barely compensate for their sloth and ineptitude.
12-15-2008, 09:52 AM #47
Enlighten me as to your past life before becoming a home inspector if you would please. Just curious.
12-15-2008, 12:25 PM #48
Most recently to HI for around 15 years years I owned a small (sales of a few million dollars a year at its peak) company by the mid '90s was building and installing async synchronous communication servers - if (for example) an insurance agent had a terminal on their desk to talk to the home office, it's quite possible there was a whole room full of racks holding our equipment at the other end.
I got out of the business prior the dot.com crash as we had a very long lead time on our sales cycle - about 18 months - and we could see the collapse of capital spending coming. I didn't get rich ( though I know some people who did, including a few who became *very* wealthy) but I' made a pretty good living at a time when it was really interesting business.
The whole time I was doing this I was also investing in rental real estate, working as my own GC and occasionally doing similar work myself, it's just a business I've always enjoyed, and when I "retired" I started the HI business because it really interests me and because I like a lot of people in the profession ( which is what I think it is, and should increasingly become ) many of whom many values I also hold it: for example a high degree of self motivation, a commitment to personal independence, and a dedication to doing things right and seen them done right.
So I probably have a slightly different perspective than many of the people here, I know that I certainly have a different take on economics and politics than most of the small businessman I meet, probably because I traveled more, and read a lot more widely, than most of them.
But also has a lot to do with the job I had previously, we were typically selling to large corporations, we were selling big-ticket items, and we were in competition with people like IBM, HP and DEC.
So when the time came in the sales cycle I would put on my suit and meet with people at the CIO or Director level to close the sale, and often over the next few months as equipment was being installed and tested I would often spend quite a few hours a week at a particular client site interacting with everyone from the CIO on down to the people performing the real drudge work of keeping things running, so I got a very intimate look at 30 or 40 IT departments in large organizations. Which in many ways was a real eye opener, they spanned the whole range of business competence and managerial and organizational style from an absolute loony bin run by a certifiable psychopath ( this was a large professional organization) to extremely effective and well managed IT departments run by highly competent and intelligent people who hired nothing but the same and ruthlessly weeded out anyone who couldn't meet their expectations. (My wife is a mid-level manager at an international software company, so through her I'm still tuned in to the culture and the way it's evolving).
It was a really ideal situation from which to watch a very wide spectrum of Americans and American businesses in action, and provided a chance to socialize with a very wide range of people I would never met otherwise.
For what it's worth, I came away with a very strong conviction that even though we are a culture that believes we provide maximum opportunity and make maximum use of human potential, in fact we often callously, carelessly and stupidly waste a great deal of our most valuable human capital.
This doesn't mean that "the system is unsalvageable": there's no doubt in my mind that market capitalism is by far the most efficient of the available choices for maximizing economics growth and personal economic opportunity - as long as you're realistic about how the world actually works and don't succumb to the lure of simplistic models, especially models of how you think the market works, or how you think it could work if only government "would get out of the way"... when government "gets out of the way", then you are living in Haiti!
Our current mess is a perfect example: Alan Greenspan in my view literally meets the functional definition of idiocy; he appears to be genuinely surprised that the normal operations of human avarice and stupidity would result in vast numbers of people gaming the financial system for short-term gain irrespective of the the long-term consequences, a basic insight into human behavior which most of us have understood and internalized by the time we are entering seventh grade.
Once you had set the machine in motion ( and there is plenty of blame to go around, within both political parties, within the financial community , and within academic economic disciplines) where we were headed was absolutely certain and transparently obvious to anybody who paid attention to actual human behavior. From this perspective the simpleminded Randian hyper individualistic opinions held by believers in self-regulating markets are literally stuff that ought to be an embarrassment to an average 12 year old - IMO these people need to be locked up in sheltered care facilities, if not for their own protection, then to protect the rest of us. ( The same is true of course for their counterparts on the left ).
Also, my wife's cousin, with whom she is very close, has lived in Holland for 25 years and is married to a Dutch citizen. There's a lot of visiting in both directions, they are average working-class Europeans ( an administrative assistant and a truck driver ) so I'm much more aware than most Americans of how working-class Dutch citizens actually live, an the pros cons of living in both countries.
Last edited by Michael Thomas; 12-15-2008 at 12:42 PM.
12-15-2008, 03:02 PM #49
So Basically IT, Real Estate Investment, Home Inspection and family in Holland.
I am opinionated but always state that it is my opinion.
Opinionated folks like yourself and me have to remember one thing. It is just our opinion from our based backgrounds and particular things that we pay attention to in life and based on that we form our opinions.
By no means does this make us any form of an expert because the truth of the matter is we have a very limited scope of knowledge. We have known folks that have been successful in life but it does not mean it would work for their next 10 people. We have family or relatives that live or have lived in foreign countries. We have performed different work in our lives.
One thing I have found in life is, keep it simple. The vast majority of folks like talking on a deep intellectual level but it is not necessary to get the same point across.
I don't answer to a lot of posts or threads on here because some times they get just a little deep. Most folks on here are plain ole folks like me and then there are some that are plain ole folks but try to get so deep and highly technical they step completely out of the realm of home inspection.
The basis of what you are saying and pretty much what myself and others are saying is the human animal in us is just plain ole greedy bastards and want what they want when they want it. You me Rick, Jerrys maybe with out even knowing it or realizing it are greedy for their own and or family sakes. You can do what ever you want to government or politics and nothing is ever going to change that fact. The more high tech and instantaneous the world gets the faster all this will happen. As far as 25 dollars and hour plu bennies and fixed cost bringing the hourly wage of an assembly line worker up into the mid 70s per hour is a joke. We bitch about socialist type governements but really what is the difference. We either pay taxes to the goverment or we by a car for 30,000. What would be the difference of just a flat sallary for a prticular job and getting retirement and medical for the rest of our life after working. The only difference is it is our choice instead of the government choice but it still amounts to the same thing. The only difference is that we are just helping one part of the working US world. It is really getting to the point with the cost of things that we are really just like socialist countries that have there folks pay huge taxes but then take care of their people for the rest of their life. Again the only difference it is our choice. What do you think a labor union is. It is a guarantee to their folks that everyone will pay for there security for life irregardless of the cost to others. The will put a strangle hold on the companies that their union folks work for untill they break their backs into submission. How fair are those labor unions to the rest of us. Not very fair huh.
You mentioned Greenspan
"Alan Greenspan in my view literally meets the functional definition of idiocy; he appears to be genuinely surprised that the normal operations of human avarice and stupidity would result in vast numbers of people gaming the financial system for short-term gain irrespective of the the long-term consequences, a basic insight into human behavior which most of us have understood and internalized by the time we are entering seventh grade."
Do you really think that is so. He did what he did because it is what had to happen or things in the world would have hit sooner with the same effect. He was hoping that with some of the decisions he made that some of the big investors and traders would have chilled and slowed down as well as the Real Estate Market.
He dropped several hints over the years but know one headed them. He may act surprised but it is no surprise to him. He knew what was to happen if things did not get in control. Once it was after a certain point there was no fixing it with out steps that are being taken now.
Idiot. I personally do not think so. Lets see. Let the world go in the toilet now or maybe if we run this thing out a bit longer the natural way of recessions will eventually square it away. He was always in the know that it was world wide. Let the US crash and the world markets crash with it. The world has followed us for a long time. The entire world economics counted on the US lead. With out the US the rest of the world would not have had a market. They would have had decades of total stagnant economies.
Well. enough of that. I am no book writer.
Oh yeah. Just my opinion.
12-15-2008, 04:20 PM #50
Ted.. Dude... Thats what I was going to say .. Dang It!!!
Oh yeah. Just my opinion...
12-15-2008, 05:50 PM #51
12-15-2008, 06:01 PM #52
12-21-2008, 03:45 PM #53
Just about everyone I know has had lay offs and cut backs, wage decrease etc. My sister had a huge lay off at Caterpillar plant that had the employee's escort off the site. So bailouts I don't believe in, File bankrupt and let the chips fall where they may. They all need restructuring. If you believe the world will come to a halt if they don't get the money you need to quit listening to the media hype.
As far as Ford goes heres a car you can't have:
The 65 mpg Ford the U.S. Can't Have - BusinessWeek
12-21-2008, 04:18 PM #54
As of Friday, FORD paid us off in a suit we had filed for the fire that occured in Oct. 2006. (See pics above in previous post)
Its been a pleasure doing business with them.
12-21-2008, 04:29 PM #55
Glad to hear you got paid before the big three file bankruptcy
12-21-2008, 04:52 PM #56
Just hope we didn't push them over the edge.
12-22-2008, 12:00 AM #57
That always makes me feel good inside.
I had a 1993 F150 and loved it. When I bought a brand new 2006 F150, I noticed there was no noticeable gas mileage improvements.
My wife has a 2006 Toyota Prius with most of the bells and whistles. I have to say that I like the car. It has good power and gets between 45 to 55 miles to the gallon. If that car holds up as good as what Consumer Reports is saying, I have no problem buying from Toyota.
12-22-2008, 09:22 AM #58
12-22-2008, 06:09 PM #59
12-22-2008, 06:10 PM #60
12-22-2008, 08:18 PM #61
Our motor home has the Ford chassis with the V-10 and the cruise control recall.
Seems that the original cruise control cable had a flaw in it, as I recall, it was not fused (or something like that), and those new cables installed for the first recall were covered by another recall, seems that the new cruise control cable actually had a fuse in the cable ... only the fuse was in the redundant ground wire - NOT in the hot wire where the fuse should have been.
You know, always switch *the hot wire* ... always protect *the hot wire* ... always install the overcurrent protection in *the hot wire* ...
Someone must have missed class that day in Electrical Design 101.
12-23-2008, 06:03 AM #62
Re: FORDHey Mike, I heard about the layoffs at Caterpillar. I heard they also called the police. Did they really think that something would happen?
12-23-2008, 02:16 PM #63
12-23-2008, 03:18 PM #64
WOW.. Geopolitical, observations, labor and economics all from one posting. I drive a 1997 Toyota 4runner with 130,000 miles. All I have done is routine maintenance. The truck works and looks great.(no body rust) I wish I could say that about all (about 15) the American built vehicles I owned over the years.
I think that says it all.
12-23-2008, 04:07 PM #65
Hold on there buck-ooooooooo.
I had a 89 silverado with 230,000 miles on it and only used a half quart of oil between changes. I gave it to my 16 year old son who ran it threw the woods until he ruined it.
American cars today are well built and can keep of with the japs. It's just the cost and gas milage that hurts them.
I think that says it all!!!!!!!!!!!