Good Summary, with Expanded Notes

Ken Houghton

Pulled from comments (to the Librarian post at Eschaton):

[W]ithout economic knowledge, DFHs don’t understand why the bailout of banks so that they would keep credit flowing is critical, while the bailout of the auto industry caused by the fact that the banks spent the money on acquisitions and executive pay instead of lending it, is not critical.

Which leads us to the reality that the problem is the dealer contracts, since GM in Brazil is gaining market share:

Nonetheless, GM here in Brazil is faring well among the other three giants, Fiat, Volkswagen and Ford. According to the latest numbers, GM sold 444,000 automobiles in Brazil from January to November. This is a 10.4% increase from the same time period last year. In the light commercial segment, which saw 76,000 units sold, there was an impressive growth of 60% again in the same period. Here, Chevrolet continues to be a respectful brand. Also, like other assembly plants installed in Brazil, flex cars already dominate a substantial part of production at GM.

Of course, it’s easier to rely on Flex Cars when you’re using a useful source for ethanol, instead of corn. (See Tom’s multiple postings on the subject, both here and at MU.)

And about those workers who (foolishly, per Senators who are paid much more than $73/hour, even if you pretend they work “full-time”) accepted the companies promises of a pension and health benefits in place of being paid? Well, Malcolm Gladwell had the data over a year ago:

Walter Reuther…believed that risk ought to be broadly collectivized. Charlie Wilson, on the other hand, felt the way the business leaders of Toledo did: that collectivization was a threat to the free market and to the autonomy of business owners. In his view, companies themselves ought to assume the risks of providing insurance.

General Motors, the country’s largest automaker, is between forty and fifty billion dollars behind in the money it needs to fulfill its health-care and pension promises. This crisis is sometimes portrayed as the result of corporate America’s excessive generosity in making promises to its workers. But when it comes to retirement, health, disability, and unemployment benefits there is nothing exceptional about the United States: it is average among industrialized countries—more generous than Australia, Canada, Ireland, and Italy, just behind Finland and the United Kingdom, and on a par with the Netherlands and Denmark. The difference is that in most countries the government, or large groups of companies, provides pensions and health insurance. The United States, by contrast, has over the past fifty years followed the lead of Charlie Wilson and the bosses of Toledo and made individual companies responsible for the care of their retirees. It is this fact, as much as any other, that explains the current crisis. In 1950, Charlie Wilson was wrong, and Walter Reuther was right.

In other news, Canada is still whipping U.S. bum, and we don’t even have a government right now.

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