Wow! The government didn't fuck up.
Who knew?

In case no one has noticed, that was about the fourth time we paid for the railroads.

Well, we can be sure the defense contractors will be safe. They have managed to spread the plants making assemblies and parts for high dollar defense items over 38 or more states ensuring that many congressman will fight to preserve that manufacturer in their respective states. I wish I knew my job was that secure.

Let the government take over all three. Hire someone senior from Toyota or Honda. Put him in charge of a semi-detached government entity that owns and runs all three of them. Let him fire as many folks as he thinks necessary. No golden parachutes. Let him hire the folks he thinks he needs. When he thinks one or another has recovered to the point that it can support itself and remain viable, he can sell the government share as fast or as slow as his financial analysts think the markets can absorb it. If he thinks they can not support themselves as they are, he can break them up or sell off parts that someone else might want, but he's got to try to save them for five years or so before he can consider this, and it will have to meet with some congressional committee's oversight.

They can't survive as they are, with the management they have. Those are the people who got them into this predicament. Why would anyone think they could get them out? (AIG, anyone? Best and brightest? Bullshit.)

Cars as we know them are dead. Apart from wheels, there's not that much in common between the auto industry and the railroad industry. People are giving up on cars for four reasons: 1) smelly old gasoline 2) Internet 3) boredom 4) embarrassment. The myth that cars are fun no longer flies. Cars are stupid, boring and destructive. Everyone knows that, even if they can't admit it. By contrast, trains are cool. Maybe with clean renewable energy cars have a future. Otherwise, no. Hybrids could be in with a shout.

A different kettle of fish entirely, apart from the wheels and government involvement. Really a new industry, apart from the wheels, is required.

But there is a bright shining example from not so long ago of government bureaucrats engineering the revival of an industry easily as troubled as today's automakers and, if anything, more central to the economy.

Repeal of Prohibition?

All the car parts suppliers in the octopusal dispersed assembly chain that add up to making an American car are all yesterday's news anyway.

The parts and technology that go into a non-internal combustion car, something affordable and new, will be altogether different.

The people supplying parts now won't be doing it tomorrow.

Why focus on trying to keep them in business? In this business, anyway.

So, Longman has recycled the article he wrote a month or two ago that didn't say a lot new at that time?

I'll pass.

> railroads
> fourth time we've paid for the railroads

Amazing how people forget what their great-grandparents and grandparents got suckered into, eh?

1873 Panic sweeps NY Stock Exchange (railroad bond default/bank failure)

1908, La Follette on bailout of banks that issued bunk bonds for railroads

1933
http://www.presidency.ucsb.edu/ws/index.php?pid=22826

"There are a multitude of complaints of business men that they cannot secure the usual credit to carry their operations on a normal basis .... The only real way to brake this cycle is to restore confidence in the people at large. To do this requires major unified action that will give confidence to the country. It is this that I have asked of the New York bankers.
...
Yours faithfully,
HERBERT HOOVER"

I want a Tata Nano.

Banks create credit, but manufacturing creates wealth. Not much use getting credit if you can't generate any wealth to pay off debt. We have reached a point where we can only maintain our standard of living by over-borrowing on credit cards, over-borrowing on mortgages, and over-borrowing on paying for government. Living within our means implies a vastly lower standard of living in the future.

Indeed a knotty problem. The engineering and science associated with manufacturing is the high tech sector of the economy (not Silicon Valley), but the production side of manufacturing is low tech that can be done by low cost foreign labor, so manufacturing moves to China. Military power comes from industrial power and technology, so as our industries decline, so does our military power.

Innovation and patent protection is one bulwark against the hordes of low wage competition. Three problems there. Educational standards are far lower than they were in the heyday of US technological supremacy, low grade immigrants have displaced much of the world class personnel we used to have in R&D, and hired-to-invent in this country means there is no incentive for professional R&D people to invent, unlike Japan and Germany.

As much as I long to give Detroit ye olde Bronx cheer. I see plenty of possibilities if we can just get past the idea that "the Big 3" are part of the equation.

Feed little companies doing innovative things like Rohm and Tesla. Help Fiat give Chrysler one last go, bury GM or fold components into Ford if it helps Ford retool better somehow, and be on the lookout for new contenders to encourage.

When your team hasn't won a Superbowl in 20+ years, it may be time to ditch the old slow veterans and get rookies off the bench. Young teams don't win Superbowls at first, but they might someday. These vets don't have the speed anymore and they're busted up from years of doing what they always did.

The Detroit Big 3 (Who are fronts for the oil companies), the banks (Who conduit the oil company money) and AIG (who keeps the oil companies protected) were handed money in a sack within a few days with no questions asked, no application and no review process but the alternative energy people, ie: wind, solar and electric cars must pay massive fees, file thousands of pages of paper and wait years to see if they MIGHT get some money. It seems as if there is an intentional program going on to delay alternative energy. Already, multiple solar companies that were waiting for that money have been forced to go out of business by the delay and most of the electric car companies are going to die soon too.