AUTOMAKERS DON'T NEED LOANS - THEY NEED CUSTOMERS
December 13, 2008
I’ve got some good news and some bad news today.
The bad news is: A lot of people are going broke. The good news is: They know it now.
You see, as long as they were able to borrow money and stay employed, they looked and felt prosperous, even though living paycheck to paycheck is not prosperity.
But now, jobs are in jeopardy – those that still have one. Credit cards are maxed out – those that haven’t been canceled – and the prospects for prosperity next year, real or illusionary, are fading with each new report on our collapsing economy. That’s why so many are now dining at McDonalds, shopping at Wal-Mart and not buying anything they can’t eat or live without.
Sure, some are simply being frugal, but most are just trying to survive another month of bills.
That means the Big Three Automakers who have been begging Congress for cash won’t have very many customers next year regardless of what they build, how cheap they sell it for or how much money the government throws at them to keep the assembly lines rolling, which is why thousands upon thousands of new cars are now piling up at ports both here and abroad.
It doesn’t matter if next year’s new cars get 5 mpg or 55 mpg. Nor does it matter if they retail for $10,000 or $110,000. There are Dodge dealers offering two for one trucks on their lots right now, and even at that, they’ve got way more than they can sell.
The fact remains, there’s little or nothing left of the average person’s bank account or borrowing power to buy them with – no more credit, no more cash and, in many cases, no more job.
What part of broke, unemployed and overextended do these CEOs not understand? Building more automobiles with future taxes isn’t going to bring a single new customer into their showrooms.
When I read about Congress considering loans to automakers with money that has yet to be created out of thin air with the Fed’s printing presses, all to be repaid later by whomever is still clinging to a job or some taxable asset, it occurs to me that GM, Ford and Chrysler are doing nothing but justifying their own existence by allowing the paychecks of some to be plundered so they can still get one.
That’s socialism folks – pure and simple – redistributing wealth – and it is not going to save this country from economic ruin. All it’s going to do is create a lot of shiny new cars for homeless people to live in.