| Tuesday, November 18, 2008
| What Recession?
|I know, I know - I've been busy and haven't blogged vacation yet. The thought of writing up all the "French Laundry" details is intimidating me, and I haven't had the time.
But this NYT article floors me: Mercedes Plans West Side Showroom
Mercedes, the German carmaker and a unit of Daimler A.G., said on Monday that it would spend $220 million to build a new flagship sales and service center under a luxury apartment complex planned on the West Side of Manhattan.So while US carmakers are pleading their case to Congress for a $25 billion bailout (which, BTW is on TOP of another $25 billion they got last year to incentivize them to create cars that reduce reliance on gas that people would actually BUY), their competitors are trotting out more fancy showrooms and hoping things turn around by 2011.
WTF GM?? Building gas guzzling SUVs for the last decade when everyone knew this was coming.
I know we had to bail out Wall Street. I know we have to give homeowners a break on their mortgages to avoid foreclosure, and I know we have to bail out the US automotive industry for the good of the country whether I like it or not - and I don't. Not one little bit. But damn it - when this is over, I want a break on MY taxes, an economic stimulus check (that I never got), and some kind of recognition or profit from the fact that I pay my bills on time, have no credit card debt, and didn't buy a house I couldn't afford in the first place.
|posted by Broadsheet @ 9:50 PM
|11 Editorial Opinions:
The difference is that Mercedes makes cars that people still want to buy.
Mercedes has suffered from quality problems since the late 80's. The main things that have kept them humming (besides having been in business 20 years longer than GM) are the difference between focusing on engineering and selling to a European market, and the fact that they don't have the pension woes of the American companies.
Yeah, GM foolishly built cars that relied on cheap gas, but WE HAVE ALWAYS HAD CHEAP GAS. If that were all the problem, GM would be fine; Americans were buying millions of shitty boxed-in pickups for years. GM has also always built crappy cars; no American car built before the 60's had brakes that could be considered functional, and American manufacturers resisted SEATBELTS, for Christ's sake.
The Big 3 have been struggling with union demands for decades, and cannot get out from under them. Yes, they should've gone to the Toyota quality approach 30 years ago, but Toyotas are BORING, so you can hardly fault them for resisting that. Regardless, they have streamlined their operations continuously since the early 90's.
Americans deciding they no longer cared where a car was made or whether or not they could actually afford it is what has actually hurt the US auto industry.
I don't agree that we "had" to bail out Wall Street, and I am appalled that it's just taken for granted now. I also understand the argument that people should take responsibility for their poor real estate decisions, although I don't agree with it. But having a functional US auto industry is a matter of National Security, and while I don't think handing them a series of checks is the answer, doing something is way more important than bailing out a bunch of yuppie fuckers in Manhattan.
But seriously, you CANNOT post a complaint about the state of the economy and expect anyone to take it seriously when you bracket it on one end by saying you're too busy to detail your opulent wine country trip, and on the other by saying that you want extra profit from the fact that you are more financially secure than 95% of Americans.
The people who bought "houses they couldn't afford" are, by and large, people who couldn't afford ANY houses, but had to buy them anyway. It is an outrage that people who have money preach austerity and sacrifice to people that have nothing to sacrifice.
These corporate bailouts are little more than the institutionalized looting of the treasury. Just what is 25 billion going to buy GM? Another year? The bottom line is GM killed GM through utterly incompetent management. In June, I junked my 1993 Toyota Camry with 200k miles. Show me a GM or Ford car that you can say about.
Moreover, weren't GM and Ford screaming the loudest for NAFTA, "free" markets, and the end of subsidies while they shipped countless American jobs to the 3rd world. Fuck them, they bought the ticket, let them take take the ride.
Personally, I saw this coming a long time ago. Thus, I didn't buy a house, worked every double shift I could, and paid off debts as quickly as possible. Instead of following the teevee's relentless message of "borrow, spend, and repeat liberally," I used my fucking brain. And now here we are, right where I knew we'd be, and I'm hearing that I should suffer for the stupidity of the public. Bullshit.
What do you get for all of that? A pat on the back. Unfortunately, that's about it.
Thank you tfg.
Jwer: First of all - you're right - my bracketing choices were not the best, but let me explain - see below:
Second, I agree 100% with your view on the auto industry and what has happened as a result.
Here's where we differ:
1. I am not "preaching austerity and sacrifice" to anyone. If it sounds like I am rubbing people's noses in it - then OK - you might get a point as it was written, and I'm sorry - but you don't know the underlying conditions.
2. I am NOT preaching austerity and sacrifice - I AM "preaching" accountability. I have no kids, no credit card debt, a 15 yr. mortgage at a low fixed rate, I drive a used card (it's a BMW - but it's used). My "opulent" wine country vacation was such because:
1. I used frequent flier miles (not corporate ones I earned through work - they were MINE) to pay for it.
2. I stayed with friends in San Francisco
3. The "swishy resort" we enjoyed in Napa was a time share gift from another friend on the trip.
4. All rental car, gas, hotel, etc. was split between four friends, which amounted to less than $200 a person.
It's easy to take a lux vacation under those circumstances.
I appreciate the real financial constraints and pressures that people have - but no one is putting a gun to their head to spend beyond their means.
I just want some credit or recognition back from our government that I have been doing it right all along. Everyone else gets a bailout and I think that is simply unfair. Complex? Yeah - but unfair to those of use who have ALWAYS sacrificed, and lived within their means - AND saved for a rainy day (says she who was unemployed for 4 months a year ago and never had to hit a credit card)
I might have been out of context, but I wasn't out of line...
TFG: The bottom line is not about who screwed up GM, nor is it about GM alone; it's about the entire US auto industry, and it's about whether or not we can afford to let it die, which I submit we cannot.
I agree that their management needs to change, for example, how out-of-touch do you have to be to fly to a Congressional Hearing in a private jet? Exactly as out of touch as the rest of US corporate management, apparently: witness AIG and their $400K retreat just days after their bailout.
The idea that American cars are not as reliable as Japanese cars is outdated by several years. Look it up.
Good for you for not getting stuck in this, but plenty of other people bought what was being sold to them by "financial experts" and cannot be tarred as "idiots" for that.
Broadsheet: What I said was: "people who have money preach austerity and sacrifice to people that have nothing to sacrifice." I didn't say that you were one of them, but your use of the trope "a house I couldn't afford in the first place" and your subsequent comments suggest that you are.
I don't think you're rubbing people's noses in it, at least not deliberately. I think that you live your life the way you want to and can afford to, and you are very often blissfully unaware that most people can't and don't.
Witness your rationalization about how your trip was actually totally reasonable:
1. You have enough frequent flier miles to go to CA for free, because you've taken a shitload of personal trips, all detailed here, including your trip to China, ie: you have a lot of disposable income.
2. Staying for free with friends across the country is less directly about money, obviously, but considering that there are people that live 10 blocks away from me who don't know where 83 is, you can see that the luxury of friends scattered across the world in appealing vacation destinations is not something that most people can relate to. My best example is Tampa, and I can only visit there once or twice a year, so I get no miles. Or rather, I do, but they expire before I have enough to fly anywhere.
3. Who has time shares? People with money. Who has friends with money? People with money. Also, I never called it a "swishy resort", you did.
4. This is the only part that is remotely frugal, but it's still completely out of reach for most people.
You're right: it IS easy to take a luxe vacation under those circumstances; my point is that THOSE CIRCUMSTANCES DON'T APPLY TO MOST PEOPLE.
And you cannot seriously expect anyone to be impressed by your ability to avoid credit cards while unemployed for four months. Firstly, you have made vastly more than the national average for years, and secondly, your prospects for future employment were and are vastly better than those of most people (which IS your achievement, kudos). However, you were not a $10/hour factory worker whose job moved to Mexico, so no one is going to feel sorry for you. Sorry.
Meanwhile, I bought my house because my rent had risen over three years to a mortgage payment. I had cats and had to live near the train station, so my rental options were limited. Since then, my property tax has doubled and my homeowners insurance has quadrupled. I've had to refinance at a worse rate for personal reasons. I can afford this, barely, but I sure as fuck wasn't thinking about it as I signed my original loan application, and I defy you to say I should have; can you actually believe that I didn't think hard about every fiscal decision I've ever made? And here I am, fucked.
Is it really that difficult to extrapolate that someone slightly less thoughtful or informed might make a series of seemingly harmless decisions that would wind up losing them their house? I submit that doing so comes at the cost of being self-righteous about your own financial genius, and few people are willing to give that up, even when it means they come off insensitive.
The idea that you should "get something back" for "doing it right all along" appalls me; you're comfortable when everyone else is gasping. Your reward for being so swell is:
- useful frequent flier miles
- the luxury of friends who live in nice places
- the luxury of friends with timeshares
- better loan rates than people with no money or collateral
- being able to afford cable
- being able to buy expensive ingredients to cook for yourself
- being able to buy whatever wine you want
- being able to pretend that buying a "used" BMW is being frugal; what was it, a year old when you bought it? My newest car ever is a 2000, purchased in 2007.
Frankly, I think that's PLENTY.
Alex: Heh. If all I was getting was a pat on the back, I'd have stuck my head in the oven months ago. As I see it, this meltdown is the opportunity of a lifetime, if not ten. I have planned for years to exploit it to the hilt (yeah, it's that brain thing again), which will be that much more difficult when my taxes double, as a result of the pillaging of the treasury, and the increasingly unavoidable devaluation of the currency occurs.
JWER: The business models of the Big 3 are hopeless and should be put out of their misery sooner than later. The GM and F execs are well aware that they are doomed, they just want to extend their personal gravy train as long as possible. Look at Big Steel during the 80's and 90's. Bethelehem, LTV, and others yielded to those with viable business models. The industry didn't die, only the dinosaurs did. That's real free market economics.
Actually, I can say that the American people are idiots. Not because they succumbed to the predatory wealth transfer mechanisms of the Corporatocracy, but because they allowed the Corporatocracy to come in to existence, in the first place. We are idiots because we were watching Survivor, worrying about Clinton's blowjob, OJ Simpson, and trying to keep up with the Joneses, while the the moneyed interests completely took over the country. Voting has been reduced to the selection of which corporate interests get to run the government and this current meltdown is a direct result of our blissful ignorance. It's been said that people get the government they deserve, and now we're getting it good and hard.
I'm sorry about your personal situation and that of the majority of the population. I understand that when your at the settlement table and the banker, who is supposed to be the financial expert, says, "No worries. You can afford this," it's hard to doubt him. (Or Kramer, CNBC, Flip this House and the like, for that matter.) However, to date these bailouts have had nothing to do with helping the public and everything to do with stemming the capital incineration of the investment class.
As far as personal fortune goes, it's been my experience that fortune usually has little to do with it. I certainly can't recall the day when I went to the mailbox and recieved a letter stating, "You lucky fucker, this letter entitles you to income and financial security that far exceeds that of the average Joe. Rock on." (I'm pretty sure Broadsheet didn't get one those letters, either.) My experience has been that there is a direct correlation between financial security and busting my ass. When I hear that I should now gladly bend over for the public good, just because I didn't get caught when the music stopped, makes me want to burn places like Canton to the ground. If that makes me self-righteous, so be it.
TFG: OK, let me clarify; you can certainly call Americans idiots for a lot of reasons, just not for getting in over their heads in a rigged system with no alternatives.
I agree that the big 3 have poor business models, although we'd likely disagree about the root cause. I agree that management at this point is trying to loot the revenue stream while making little effort to sustain it, but that's hardly unique to the auto industry, as you point out.
My point was and is simply that the US cannot allow the largest pool of skilled manufacturing talent fail. The auto industry was key in our ability to go from sleepy ex-colony to Superpower during WWII, and it shocks me that no one seems to care about that. And while I am all for dinosaurs going extinct, the idea that some plucky little Tucker can make a go of building a new car line in his garage is ludicrous. If this were a REAL free market, there wouldn't be any dinosaurs to begin with.
My personal situation is actually fine, thanks, it's just not ideal. There's a continuum here, with entitled rich people on one end, complaining about where their bailout is, and desperately poor people on the other, wondering how they're going to feed their kids. I'm in the middle along with everyone else; my job is unlikely to go away any time soon, it pays well, I have no new debts, and I am making slow but steady progress on the old ones. My point is, to act as though it's not hard for anyone simply because you got lucky with your guesses about how things would go is insensitive at best.
And I guess, since the bailout doesn't raise your taxes in any way, why do you give a shit? I'm not happy 50% of my tax dollars go to the DoD, either. I hate Canton, too, but that doesn't mean I demand a bailout from anyone, or think that this is a particularly more ridiculous waste of my tax dollars than anything else. I just wish it would WORK.
You'll note that I did not call YOU self-righteous, either.
jwer: if you really think I'm insensitive to yours, or anyone else's bad luck or unfortunate circumstance not of their choosing, or even "blissfuly unaware" then you're very sadly mistaken, and don't know me very well at all...I would have thought differently, so perhaps it is I that was mistaken.
When you write a post titled "What Recession?" which is basically a lead-in to a complaint about how you deserve a bailout, there's a problem.
"Blissfully unaware" was me giving you the benefit of the doubt; if you said the things you said knowing full well that many of your readers would be offended, then perhaps the problem IS that I don't know you very well.
And perhaps that's just fine.