Governors Against State Bailouts

" Americans don't want to buy what they're selling."

Well if I had plenty of money and all I would get a new Ford pickup.

sodbuster wrote:Well I drive an 86 S-10 pickup.

It has 349,000 miles.

It is real rough and banged up but still runs good.

Only chevy I ever owned.

I used to have an '86 S-10 also; the straight-4/regular cab version. I managed to nurse it to 200K miles, but the last 50K or so were pretty ugly. I replaced it with a Honda CR-V, which is an almost infinitely better vehicle.

So here's an interesting slant on the potential bailout of the "Big-3" -- the entire market capitalization of Ford and GM combined is about 9-gigadollars (Chrysler is not publicly traded, but Daimler figures that their 20% of Chrysler is worth just about nothin', so five times almost nothin' is still almost nothin'). That means that if one were nuts enough to want to buy all three of the Big-3, and had about 10-gigabucks laying around, then one could snap up all three for less than a third of what they appear to want the Feds to throw at them.

On the other hand, Fuji heavy Industries (the parent company of Subaru) has a market cap of just slightly more than the amount being asked for by the Big-3 -- and does anyone actually think that the price-tag for such a bailout will really be limited to what they are asking for right now? So, for about the same price tag, we (via the US Treasury) could throw a pile of money at three car makers that may, or may not, survive another couple of years; or, we could buy (lock, stock, and boxer-powered AWD) a corporation that makes pretty decent cars and isn't in any immediate danger of going under.

Doesn't make the whole bailout quite seem worth it, does it?

Well bmd I realize I am out of my element but if we can save a couple million jobs for the amount requested I think it would measure up pretty well with the $126,000 per job the Alabama taxpayers put up for Mercedes.

All things considered.

Since 1968 I have bought five new Fords and been happy with all of them.

And I have probably owned about 5 or 6 used American made cars and I have not seen the problems people keep talking about with American cars.

Plus for me (and I realize some of the folks on here might think this is corny or crazy) I take a sort of pride in buying American.

If we don't maintain a manufacturing base in this country it will eventually come back around and bite us. imo

SC and Alabama didn't give money to foreign car companies. They gave tax assistance to lure those companies to their states just as West Virginia did for Toyota in Buffalo 10 years ago.

Now I can't speak for SC or AL but I believe the investment made by WV was worth it as Toyota has expanded 3 times, going from 300 jobs to something like 1500 and is now making engines and transmissions and will soon be making spark plugs.

As for buying American, I agree and that's why I would suggest purchasing either a Tundra or a Camry, both of which have engines and/or transmissions made by West Virginians and assembled by Kentuckians.

Well aaron I am not opposed to states providing assistance if it brings good quality jobs.

My point was it seems ironic that these big politicians get on their hi-horse about gvt. assistance to the big 3 when they themselves (their states) have given these foreign car makers a pretty good deal themselves.

in a perfect world we would not have the various states bidding against each other to give the best "special deal" to these big corporations.

But we dont live in a perfect world.

Not too many years ago even liberals understood that competition makes everybody better.

Do you guys suppose there is any way possible to make Sherm understand there is a world of difference between offering tax incentives to lure or retain lucrative business and a $34 billion bailout of coporations that management and labor have run into financial ruin and marketing obsolescence?

I suspect he's due to stop chewing this piece of gristle about any time.

http://www.nytimes.com/2008/11/18/business/economy/18car.html?pagewanted=1&fta=y

Well I suspect those on the right will not read all of this link, but it shows somewhat mixed results on bailing out auto companies in Europe.

More con than pro.

And would someone explain to Stephanie the difference between a loan (like the big 3 are asking for) and a handout (like the states are giving these foreign auto makers such as Mercedes)?

And besides the handouts they are giving tax breaks that the rest of America's business are not.

Special rights?

As with any loan, I think you have to take a look at the company and what they are asking for and determine if they are worth the investment, in this case, our tax money.

In the case of Ford, I would say yes, they are worth the investment of my money.

GM and Chrysler, no, I don't believe they are good investments. I think both are poor investments, I think that between management and the unions, both are doomed to fail and I think that if the government does loan them money, it should be with the strictest of conditions that guarantees tax payer money be repaid before any other in the event of a failure before either fail.

What "hand outs" are the federal government providing Mercedes, or any foreign automaker?

I read your article......took forever for page two to load. It is crystal clear a government bailout of the Big 3 will not work. At best, it will stall the inevitable temporarily.

Again, I ask you, what handouts are being provided foreign automakers by the federal government?

I think the point your missing here Sherman from those opposed to loaning this money is, where does it stop. Yesterday it was the financial industry. Today it's the auto industry. What's it going to be tomorrow, beer producers? The baking industry? Textiles?

And all of this is in addition to years of bailing out the airline industry, propping up Amtrak and how much money has been thrown at farmers, paying them not to grow products?

My point is that minus regulation, the government should not be involved in the private sector in any way, shape or form.

General Motors and Chrysler are missing a great opportunity. Countrywide, a failed mortgagor made a sweetheart loan to Sen. Christopher Dodd, Freddie Mac and Fannie Mae contributed thousands to his Senate re-election campaign, and Bank of America which bought out Countrywide also donated seventy thousand to his re-election campaign. This resulted in a $700 billion bailout for Wall Street banks.

I’d think the Big Three would know the old adage: You have to spend some money to make some. Why don’t they get together and pony up a couple hundred thousand in campaign contributions and a new car and Dodd ought to be good for another $100 billion or so?

Why do they want to muck around in a committee hearing room? Groveling used to be done behind closed doors

Sweetheart tax deals with the states? Shoot, why waste time on the states? Michigan cannot make a deal. Jennifer Granholm has blundered her way onto Obama’s economic team.

The Big Three need to go to Charlie Rangel to make some tax concessions. When Nabobs Industries needed a tax break they made a million dollar contribution to the Charles B. Rangel Center for Public Service (you can’t make this stuff up!) at City College of New York and won tens of millions in tax breaks from Rangel’s tax oversight committee.

Only in the United States Congress can incompetents get away with fraud, embezzlement, tax evasion, and countless other crimes but continue to oversee the very business sectors they have driven into penury and ruin!

Well I am not assuming anything but I figure Mercedes and BMW ponied up pretty handsomely to the republicans in SC and Alabama dont you?

So who did Toyota pony up to in West Virginia? And for that matter, how about Rite Aid. I know for a fact that over the past dozen years or so, in addition to getting lucrative tax breaks, the state has put a new roof on their building ($250K), installed new lighting ($300K) paved their lot ($150+K) and other repairs to their property.

What Republicans did these two businesses pony up too?

Maybe HIM Sherman? Is he the Republican?

Goodness sakes, Sherm I don't know what went on there. I know from past experience the lengths the state of RI and some of her cities and towns would go to in attracting industry. RI courted the developers of the Providence Place Mall, for example. RI bent over backwards to get banks and pharmaceutical companies to move in when costume jewelry, textiles and other industry headed to China.

Breaks on property and business taxes for a few years are worth the jobs and other revenue these industries bring. What's more, it wasn't the federal government bringing and keeping those jobs in RI, it was the RI state government and the local municipalities. They are the areas getting those jobs and that growth and they are the people who made the concessions.

These automotive makers aren't looking for a break on taxes to get them to stay in Michigan or Ohio. These companies are looking for a big, fat, government handout to bail them out of the disasterous consequences of their mismanagement, lack of innovation, and greed.

There is no end to it. Bail out the banks, investment firms, insurance agencies, automotive makers, they'll line the streets of Washington waiting for their turn looking for that handout.

If these companies are salvagable, let the financial industry that just got a trillion dollars pony it up. Let them take the risk. How many extremely risky investments should hard working Americans be forced to endure?

You know you have an ass backwards way of looking at things. When an industry is providing jobs to the community and fueling the economy, you want to tax them out of the area if not out of business! Case in point your celebration of Dupont losing its court case over the outrageous property tax bill it must now pay. Yet let an industry be driven to ruin due to greed and incompetance and you just think we should all dig deep to try to rescue them.

It makes absolutely no sense at all. You want to throw good money after bad on insolvent businesses in other parts of the country and tax the businesses we have operating right here in WV, providing jobs to West Virginians and fueling our economy out of town.

Honestly, there is no getting through to you and I'm fairly certain this is because of your union mentality. If these companies weren't unionized you'd have had a freaking cow at the thought of throwing billions of taxpayer money their way.

Let me tell you something, as far out in the boonies as I am the Toyota plant is still only about a 25 minute drive for me. I drive that long to go to that dinky Foodland or the miniscule library or to pick my daughter up from school. Many of my neighbors here make comfortable livings working for Toyota. These are American citizens, West Virginians making a decent wage producing American made products. Toyota gives back to this community. They provide scholarships and learning opportunities for our students and donate cash and labor to our community organizations.

All this and nobody's paying dues to a union full of graft and corruption. Toyota hasn't been spending millions lobbying Congress for billions in taxpayer cash, either.

http://www.cfed.org/focus.m?parentid=34&siteid=1629&id=1653

Well Steph if you are interested the above link will show you that Alabama provided more than just property tax and business tax breaks.

The state gave them 3000 acres of prime industrial property.

(the property they gave Mercedes was worth more than the plant.)

They cleared the land and provided utilities, etc.

They built new highways for them and even their own Interstate interchange.

They paid for recruiting and training the workers plus[color=red]

they agreed to even pay the wages of the employees.

In order to follow through with what they had promised they tried to raid the Education and Pension funds.

(one wag said we used to tax industries to provide for education and now we are taxing education to provide for industry)

Estimates range from $150k to $250k Alabama ponied up per job.

Now I know you will say that is Alabama's business if they want to enter in a deal where it will possibly take 50 years just to break even, and I agree.

I have not objected whatsoever to Alabama using these tactics to this extent to attract industry.

What I object to is the good Senator from Alabama getting on his hi-horse and saying gvt. should not be subsidizing private industry by guaranteeing a loan for the Big 3 auto companies.

Alabama has also subsidized Japanese companies and others.

You keep trying to change the debate and say I am opposed to Alabama doing this, when I have told you repeatedly that is not the point.

The point is these southern politicians are all in favor of subsidizing foreign non-union companies and then try to block loans for American companies.

sodbuster wrote:http://www.cfed.org/focus.m?parentid=34&siteid=1629&id=1653

Well Steph if you are interested the above link will show you that Alabama provided more than just property tax and business tax breaks.

The state gave them 3000 acres of prime industrial property.

(the property they gave Mercedes was worth more than the plant.)

They cleared the land and provided utilities, etc.

They built new highways for them and even their own Interstate interchange.

They paid for recruiting and training the workers plus[color=red]

they agreed to even pay the wages of the employees.

In order to follow through with what they had promised they tried to raid the Education and Pension funds.

(one wag said we used to tax industries to provide for education and now we are taxing education to provide for industry)

Estimates range from $150k to $250k Alabama ponied up per job.

Now I know you will say that is Alabama's business if they want to enter in a deal where it will possibly take 50 years just to break even, and I agree.

I have not objected whatsoever to Alabama using these tactics to this extent to attract industry.

What I object to is the good Senator from Alabama getting on his hi-horse and saying gvt. should not be subsidizing private industry by guaranteeing a loan for the Big 3 auto companies.

Alabama has also subsidized Japanese companies and others.

You keep trying to change the debate and say I am opposed to Alabama doing this, when I have told you repeatedly that is not the point.

The point is these southern politicians are all in favor of subsidizing foreign non-union companies and then try to block loans for American companies.

Alabama took the risks for this project. Alabamans will reap the reward or pay the price, whatever the case may be.

Why should Alabamans be forced to fund the bailout of Detroit? What benefit will Alabama see for her share of the investment?

I don't know if Alabama made wise decisions, or very poor ones. From the piece you linked to it certainly seems like a bad one. Either way, it is their burden to bear, or their windfall to enjoy.

Bailing out insolvent companies is not a function of the federal government. It isn't fair to demand taxpayers in Vermont or Nevada to throw money at an industry who has failed to keep up with the times.

Just as Alabama saw a wave of businesses try to hone in on Mercedes action, the federal government will see a tsunami of industries with their hands out demanding that their companies and their employees are every bit as deserving as GM, Ford, & Chrystler.

Funny Sherman, you rail about Alabama giving money away but you didn't comment on what Jay and West Virginia democrats have done.

Why is that?

Well Aaron you are missing my point just like Steph is.

Just like I told her two or three times I dont object to Alabama doing whatever they want to attract business.

My objection is that if they are going to give millions of dollars to foreign car companies they should not be preaching to everyone about how bad it is to help out American companies.

Why is that so difficult to understand.?

I dont care if they give Mercedes $500 million worth of property.

I dont care if they pay to recruit and train workers.

I dont care if they provide a new Dept in their college just to accomodate MEB.

I dont even care if they want to pay the wages of MEB employees.

I just dont think they have standing or credibility to get on their hi-horse and preach about how bad it is to help American companies.

So we should ban Richard Shelby from speaking out on the floor of the U. S. Senate? I see your point. But then I don't think Christopher Dodd ought to have any say in the banking system or Charlie Rangel having a say in the tax code.

no not at all. Just if you live in a glass house dont go throwing rocks at others...