The Economy and the big 3 Auto Makers

Since Im now involved in the stock market, I find that Im on the front lines, or close to it anyway, on hearing about these wowes of the economy. Even for those that are not this close to it, its easy to see the problems. First, there are the problems with Wall Street. The market has been going down and down most every day. Many people that have stock has lost thousands and even hundreds of thousands. Though the problem is not really the stock market. The market, after all, is just a refection of the nations economy. Mainly it is the banking industry that is failing. Companies like Freddie May & Fannie Mac that have caused this, not the stock market.

Now there is a new problem. Well, its not really new, but has just now come to the front lines of public view. Its the big 3 auto makers, GM, Ford, and Cherysler. The big 3 have been on the verge of failure for many yers now. Its only now that unless something is done soon, 1 or all of them may face bankruptcy. All 3 of them are crying out to the federal government to bail them out.

First, Id like to explore financial collapse myself. Then Id like to throw in my 2 cents worth , or however much it has become now, of opinion.

Our parents and parents parents had a different set of Financial values. If they didnt have the cash in hand, they didnt buy it. They simply did without.

If they did get into financial hardship, there was only 1 solution. Pull yourself up by your bootstraps! They were told; "You got yourself into this mess, you get yourself out.

Now the norm is, If you cant afford it, just charge it. Not only is this the way that individual families handle their finances, but its also the norm for corporations. Now, if we get into financial hardship, the solution is simple, just file bankruptcy.

I think what is needed is for the nation to get back to where it once was. We need our financial system to once again be based on cash, not credit. If you cant afford it, then go without. If you get into financial distress, if at all possible, get yourself out of it.

Statistically, those families that file bankruptcty file over and over again. They just stay in the patern of raking of dept and filing Bankruptcy, raking up debt and filing bankruptcty then repeating it again and again.

Americas Corporations are also in this patern. But for them, all they have to do is cryout to Uncle Sam and he bails them out.

Why are they more elegible for this financial windfall than the nice little video store that went out of business just down the street? The reason is simple. They can claim that their industry is essential, and if they go down, it would deal a severe blow to the American economy. Thats why we have bailed the auto industry out before and may do it again.

But this is exaclty why we cant bail them out!

Corporations like the big 3 have the attitude that if things do get bad for them, they dont have to figure out how to fix things themselves, all they have to do is get the feds to fork over billions.

So they dont really have any real incentive to fix themselves. They can just ask for this bail out and pretty much go back to the same failed business model that got them into the mess in the first place.

The next problem is, whos next? Whats the next "essential to the nations economy" business or industry that will want a financial bail out?

If we keep bailing out failing busiensses, instead of actually fixing the problem, its onlt going to get worse.

So, here is ther part where I offer up my ideas on how to deal with this. Ready? Here I go.

In the words of the Soup nazi.....No bail out for you!
Either they will figure out a way to fix themselves, or they will go under. If they file bankruptcy, which would probably be Chapter 11 (reorganization), hopefully the courts would force the old failed management to leave and they would get new management, a new business model and a new healthy plan for recovery.

If they go under completely, let em go under. In order for new life to come, death is required. You can examlpes of this everywhere. Maybe the big 3 need to die. If they do, perhaps some innovative new auto makers would emerge to take their place. Who knows. The point is, maybe its just time for a change.

We can either kick and screem and do everything we can to try to prop up these dying hourses, or we can let them die and loving embrase the new comanies that will emerge to take their place.