Thursday, March 05, 2009
It Ain't Rocket Science
The market tanked another 281 points today, on the news that General Motors is in trouble. Who knew? Apparently not many it would seem (tongue firmly in cheek).
This ain't rocket science people. It's a no brainer. Or as the Geico commercial says....so simple a cave man could do it. But our elected representatives in Washington? Well they just can't seem to get it figured out. Actually, they have it figured out all too well, but to get it in gear and actually do what needs to be done? Would mean turning their backs on large labor unions and then reaping union displeasure for their disloyalty. Mean while, to hell with loyalty to the people that elected them, this is serious business. Those hayseeds back home don't know what is really important. Right?
Americans need to remember one thing. An important and purposely obscured little detail IMO. And that detail is that unions, (all unions) represent socialism. Collective socialism to be more specific. "Workers of the world unite!"
So who better to get and gain more of the same for American labor unions, than the socialist democrats currently in majority in congress and in the White House.
No, it ain't rocket science friends, it's actually relatively simple. Even for those who didn't graduate with MBA's in business management. Companies survive, grow and thrive, based upon a relatively simple formula. In a word, that formula can be condensed down to one critical word. "Profit."
If you make a profit? You can continue your business. If you make enough profit and grow your business with investment, you can expand your business and hire more employees to produce and sell more of your product. Which will mean more profit and an employment base that will continue to be employed. But when the cost of doing business exceeds your ability to make a profit? Your business is doomed. Unless something changes and the cause of the effect in profit loss is identified and eliminated.
The American auto industry has been taking a beating for years, due to their UAW union commitments, while their competitors have continued to expand unfettered by unions. Now, with the current down turn and crash of the economy, the big three auto makers can't even sell half of what they were selling a year ago. But their labor costs and the costs of doing business remain unchanged. GM is currently hemorrhaging 2-3 billion dollars a month. How long can the American taxpayer continue to subsidize their exorbitant labor costs while they continue to make zero profit? See the problem?
The bottom line, the American taxpayer could be fleeced from here to hell and back, while continuing to prop up the failed business model of a bloated and dying union controlled American auto industry.
Something has to be done. The same thing that should have been done months ago. And that is, the American people need to say not no, but Hell No! To any further subsidy of any of the auto makers. Let them file chapter 11 and reorganize and get out from under the death grip of these unions. If we had done that last fall, we could have saved about 60 billion or more that we have wasted to this point.
It's going to happen folks. GM and Chrysler and Ford are all going to have to either get out from under these UAW contracts to survive or they will fail completely. Either they reorganize now, or they might as well fold tent today and walk away and let the creditors auction off the rest. There is no other option. They know it and the American people know it and the Japanese car industry knows it too. They are hurting almost as bad as the Americans are, but they can survive because they are not obligated to unions.
It's the economy stupid! And the American people are being tempest tossed by the fear that is propelling it everyday on Wall Street and in the media. People are not going to buy big ticket items or make major purchases, when they don't know from one day to the next, if they are going to have a job or a home to come home to.
So like I said at the beginning, this ain't rocket science friends. It's simple supply side trickle down economics. The economics of cause and effect. What the democrats still call voodoo economics. Because they remain so stupid that they can't understand simple business models that don't involved governments or committees. And unless and until the people of this country raise a hundred dollars worth of hell with their representatives each and everyday, until the brakes of this runaway train are applied and this wreck of an economy comes to a complete full stop? Ain't nothing going to change. But worse than that? It's only going to get worse folks. Some economist said yesterday, that the American economy is suffering "death by 100 cuts." I agree. The nation is bleeding to death before our eyes and no one seems to know what to do or where to begin or who is responsible and the clock is running.
Author Prime at 7:13 PM