[sgarnett]

The Senate, UAW, et al, just gave up (ie failed) on reaching a compromise a few minutes ago.

I don't know how GM will come out after bankruptcy (they just hired the bankruptcy lawyer), but the stock market futures are looking ugly tonight. It actually held up well through some dismal recent employment numbers, but I suspect tomorrow is gonna be ugly. Rebuilding my retirement is going to mean austerity and no new cars for a very long time, and I suspect that will be true for many others. That can't be good for any automaker.

I'll admit I wasn't convinced that bridge loans to March could solve the problems for GM, so I don't claim to know what the right answer was. Nevertheless, this is going to be a big kick in the teeth for the economy.

This post has been edited by sgarnett: Dec 12 2008, 04:07 AM

[00 Trans Ram]

Hahaha - I get the same reaction. Pull up in the 1984 Chevy C20, with a Trans Am on an all-purpose utility trailer. Then go beat the Vipers and Vettes with 18-wheeler transports. Kinda fun.

As for the issue, I'm not an expert on any of this. In fact, I'm not even learned. If we talk about healthcare specifically, then I can speak with knowledge. But, I have no experience with unions, large manufacturing companies or government assistance of this scale. Therefore, I will reply only in general and to a select few points made above.

First, I don't understand the idea of pensions. I mean, I get what they are - I just don't get why anyone would want one! You are trusting your future finances to someone other than yourself? And, what's more, you're trusting it to a company which you probably gripe about dozens of times per day? Why would the average employee want a pension, which they can't control, versus a 401(k) or other retirement which they can control?

Second of all, no one is going to benefit by this. The workers making $30/hour will not benefit, the execs won't, and the labor bosses won't. everyone will hurt. A point was brought up about if the $30/hr worker were cut to $24/hour, how he would lose his house. That is probably true. But, is that the worse case scenario? If so, it's not that bad. After all, he's still making almost $50k per year. Yes, he may lose the house he is in now. But, he can buy a smaller one. He may have to keep that 2005 Tahoe a few years longer than he originally thought. But, he'll have a house and a car. Again, it's not what we all want, but it's certainly better than standing in a breadline.

As for the unions... I just don't see their place today. When they were formed, they served a very much needed purpose. Companies ran roughshod over their employees. People like the Rockefellers, Vanderbilts, etc. owned huge industries and if you wanted to work, you worked for them at whatever wages and under whatever conditions they told you to. But, the world has changed. America has labor laws now. Companies have to spend an average of 2-3x an employee's salary just to train a new person. That means there is natural incentive to make your employees happy. Heck, the company that I work for was just voted the 2nd Best Place to Work in this region - how many times did Rockefeller win that award back when he ruled the industrial world?

The unions have not defeated Big Business - they have replaced them. If a company refuses to give into a union demand, then the union will go on strike and shut down all production. How is that any different than way-back-when, when a company would fire its workforce because they refused to work 25 hours a day?

For once, I can proudly say that the South has gotten it right. We are attracting large industrial and manufacturing plants at an unprecedented rate, and have very little union presence. When Thyssen-Krupp looked to build one of the largest steel plants in the nation, they looked at LA and AL. Heck, Louisiana (who very recently held the distinction of have zero Fortune 500 companies in-state) makes an announcement almost quarterly about some huge plant of Fortune 500 company relocating here.

Sorry, I seem to have gotten off on a tangent. I don't lay this blame only on unions, and almost none of it on union workers (though they may have the toughest time reacting to the changes coming). GM et al are probably mostly to blame. At some point, they should have told the unions to go screw themselves. You want to strike at our Detroit facility? Fine, we're moving to Arizona. Everyone who wants to come down there feel free.

But, I also think that a lot of this is being made into too big of a deal. The economy is hurting, but this is no recession. During the Great Depression, unemployment was 25%. The official unemployment rate for November 2008 was 6.7%. This is the exact same rate as the European Union, and only .6% above that of China (who, supposedly is doing great)!

People see the stock market sliding. But, does 90% of the country even know what that means? I have yet to find a single person who, in normal conversation, can tell me exactly what the numbers (ie: 8663.61) of the Dow Jones Industrial Average mean! (FYI, it's the activity measured on just 30 companies' stock.) But, when they hear that it's gone down by 500 points, they all run to withdraw their money from banks!!

This economic downturn is a product of a moderate recession, that has been multiplied by consumer ignorance, media hype and investor incompetence (after all, they should know better than to get spooked by some of these numbers).