GM, Chrysler May Face Bankruptcy to Protect U.S. Debt

[opebo]

Are you familiar with Britain car industry in the 1960s?

How is that relevant?  Yes, that industry was nationalized.  The fact that it was eventually closed was the error, not the nationalization.  Had it not been nationalized, it would have closed earlier.

In any case a better course than bankrupting these companies would be to simply not be 'paid back'.  I've never been able to understand this simpleminded knee-jerk desire to 'be paid back' - when that is precisely what you don't want in a depression.  You want the money to just fly off the printing press and be spent.  There's no upside to it coming back.

[opebo]

I think I am starting to understand your position more. In a Depression that is fine and dandy but in our present conditions the chances are such financially loose policies could lead to severe inflation once the economy returns. My question for you is where do you draw the line between Deflationary-Depression and Inflationary-Recovery and what policy changes would need to be in place to prevent the return of inflation and when do they need to be enacted?

I think our current situation is clearly a very severe depression/deflation, and we are a long way from inflation/recovery.  I haven't actually thought about how to change policy once recovery begins, but I assume one would just stop printing/spending.  In any case inflation is preferable to what is occurring now.

[opebo]

Time to let them go, I think.

We still have Ford anyway.  The auto companies don't need bailouts.  They just need to grow a pair and stand up to the UAW.

Or maybe make cars that people want to buy.

^^^^^^^^

precisely.

The biggest mistake in analysis is believing that American car companies make cars people don't want to buy.  The fact in this economic downturn is that Japanese car companies have gotten killed just as badly as American companies in terms of sales, and in many cases are actually faring worse.

The problem is the "cost structure" of the American car companies, plain and simple.

Haha, dumbs think they know what kind of cars the public wants to buy.  SS is not as dumb, but still thinks he knows 'what is the problem'.  Of course the real problem is government policy (the policy of having a depression).

But it is certainly true that there is nothing wrong with an american car - keep in mind why would one want the 'best quality' car?  That's fairly irrelevant.  One wants 1 - the cheapest car, biggest, most comfortable car for the money, and 2 - the most durable car.  So, that will almost certainly be a heavy full frame vehicle with a cast iron push rod motor: basically a full sized old american sedan, or, since the sad demise of that vehicle, the American SUV. 

To some extent the only real error of the auto companies is trying to make high-teck buzzy garbage like the foreigners make.