Skip to Content.
Sympa Menu

homestead - Re: [Homestead] Bailing out the auto industry

homestead AT lists.ibiblio.org

Subject: Homestead mailing list

List archive

Chronological Thread  
  • From: Clansgian AT wmconnect.com
  • To: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] Bailing out the auto industry
  • Date: Tue, 11 Nov 2008 11:11:12 EST


> >Hanky Panky so far seems to be dumping as much money as possible on his
> friends in the financial industry.

That seems to be exactly what is going on. Folks of Hank and Ben's mindset
are like the economists who cannot grasp the concept of oil depeleting to the
point that it cost more (in oil) to get it out of the ground than you get by
pumping it. To them it is always a matter of supply and demand, you can't
run
out of oil because the price will always increase to the point that demand
falls. That is only true until you come to the point that it takes more
energy
to produce it than you get from the process, but that reality doesn not fall
into the economists' paradigm.

Like that, Hank and Ben see the entire world through financier's glasses. To
them, the only chance for GM is for the banks to be flush enough to lend them
the money. Giving money directly to them makes no sense in that midset.

But the big factor we are dealing with here is what Kunstler calls the
"psychology of previous investment".

Having had a finger in the pie of the the computer phemonenon of the past
twenty-five years, when rapid improvements were being made in the hardware,
many
a time I was present when someone was asking the local hardware man I did
business with about upgrading:

"You've got a 286 based machine. To increase the memory, increase hard drive
space, and upgrade the video capacity, it will take $800 of parts and you
will still have an outdated machine that won't run the current softare. But
I
can sell you a new 386 based machine for $1200 and it will do you for several
more years."

"No .... no ... I can't do that. I've got $2000 invested in this present
computer and I can't just throw that away so sell me the $800 of parts to
upgrade
it."

The blather I was hearing on the radio in the shop today is a massive whining
of how many people are involved in the auto industry and we can't just walk
away from that many jobs. So we are willing to put tens of billions in a
dying
industry because of the mindset of "previous investment."

Nor is there any real prospect of retooling GM and Ford to be Toyota
knock-offs. The industy is dying. That (borrowed but otherise non-existent)
$50
billion ought to be going for rail and busses.

James



  • Re: [Homestead] Bailing out the auto industry, Clansgian, 11/11/2008

Archive powered by MHonArc 2.6.24.

Top of Page