SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Mish's Global Economic Trend Analysis
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: koan who wrote (90487)11/19/2008 2:11:48 PM
From: benwood6 Recommendations  Read Replies (2) of 116555
 
The weird thing about bailing out the auto companies is that we will pay for a GM or F even without buying it as we prop them up (either via inflation, taxes, or both). And in return, we can buy a F or GM at a bailout supported higher price.

The underlying problem is the same as why jobs are exported with wild abandon: our cost structure is too high relative to the rest of the world. One way or another, the party will end and we will have a further decline in our standard of living. Already, we are paying for fraud and chicanery on Wall Street in a cratered stock market and crushed 401k plans and a deflationary downdraft which is more severe than anything since 1930.

If we prop up one of the biggest industries in the US, then we will have taken one gigantic step towards the mediocrity of the old USSR.

By my reckoning, the bailouts already in place are of a size that would have allowed high speed rail and light rail to be deployed in dozens of cities in the US and connecting many major cities. Instead, we have sustained Wall Street/AIG/Lehman bonuses and a dodgy Federal Reserve balance sheet that surely will be haunting us in a few short months at best.

Soon it will be 'everything' is too big to fail. How is that going to work? Let's check the USSR's track record...
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News