Yes, I meant that it makes sense to try and avoid those massive costs. I didn’t mean to suggest that the federal loan is guaranteed to work.

“To me, it makes sense to avoid the massive costs, both economic and social, that would accompany the collapse of the Big Three.”

You mean: it makes sense to bet with federal money that we may avoid the massive costs, etc. It makes sense to take a risk that no bank is willing to take.

But could someone clarify for me how the very consistent thread guiding the voting debates earlier that basically said, “The GOP is an ideological, neocon evil and should be destroyed, in spite of it being the lesser evil of two practical options.” Yet, now so many same seem to be saying go ahead with the lesser of two evils because these guys are our friends or look like us.

I do not know if I believe the 3 million man march would happen if we do nothing. Although I believe in the incalculable loss our manufacturing industry has left in our country, without reforming our government, our tax policy and our borders (iincluding border taxes and immigration), I fail to see how any bailout would be a practical success.

If it came to war, could we not as easily comandeer Toyota’s and Honda’s plants and workers here? They’re Americans too, aren’t they? The free market is a dangerous thing to be argued against vehemently and acted against, for it works in spite of our efforts — replacing union workers with non-union workers (nothing to do with the workers themselves) and American CEOs with Japanese ones.

1. I was ready to buy my first business computer (to move up from a home computer – more on that below) when I read in Byte Magazine that Apple was going to make an announcement on the rumored Mac computer. I had been on the verge of buying an IBM PC clone, but decided to wait a little longer. When the announcement came, Jobs or Wozniac was quoted as saying that 128K RAM was all anyone would ever need. I thought they were smoking too much dope and, next day, bought a clone with 256k RAM (expandable to 640K) for about $3K.

2. Prior to purchasing my first business-class computer, I owned a TI-99/4A home computer. The 16 bit chip in the TI was superior to the 8 bit chips in the Apple, Atari and Commodore computers. However, the TI computer failed in the market place because of market share, or lack there of. (Software vendors were put off by the closed architecture of the TI. Software availability determined market share, not inherent quality of the computer.)

3. The clone that I purchased was a Seequa Chameleon. The Chameleon was one of the first suitcase-style computers and it contained both a Z80 and an 8088 processor, so it was capable of running either CP/M or the early MS-DOS operating system. It came bundled with DOS-based business software. It was a hit with those who wanted to transition from CP/M to MS-DOS. It, too, failed in the market place.

4. In the early years of Seequa, which was located in Anne Arundel County, Maryland, the county government had some “extra” federal money. The county council voted to give Seequa a $250,000 grant to help the company expand market share. I remember one of the council members responding to criticism about giving tax money to a private company, saying that it was federal tax money so the county could take more risk in using it than it could with county tax money. (That, in my experience, is typical thinking. The state, counties, and cities think of federal revenue as some kind of bonus that they can be more careless with.) Seequa eventually failed in the market place.

5. I’ve also owned eight-track tape players, a beta video camera, and companion beta tape player. All of these were at least slightly better than the competing technologies (for example, the eight-track format gave easier access to the various songs on a tape because you could switch tracks with a push of a button), yet they lost in the market place. (Such was my reputation that my friends always checked to see what I bought so they could buy the competing product.)

6. One can only conclude that although market share is critical to success, it is not necessarily determined by superiority of the technology or product features. Many factors come into play.

They may fail anyway, but there is reason to believe they won’t. The new collective bargaining agreement contains substantial concessions and largely eliminates the labor pay differential, and GM and Ford are poised to introduce cars that consumers looking for good gas mileage will snap up–a version of the Ford Fiesta that already sells very well in Europe and the Chevrolet Cruze, with a 45 mpg rating for highway driving. And if gas prices contiue going down, the Big Three are alredy making SUVs and trucks people enjoy driving. To me, it makes sense to avoid the massive costs, both economic and social, that would accompany the collapse of the Big Three.

The private sector may not be funding the industry with its own loans because the market place operates in different and extreme manners when oligopolies and monopolies are in effect. Basically the monopolist gets everything he wants or nothing, with little inbetween.

If you apply the anti-trust measures as written on the books, break up the auto oligopolies, and simultaneously apply more thoughtful VATs, then I suspect you’d see a much different market reaction.

Though, consider the current cash crisis these behemoths face in a recession…the argument is for loans to “keep them afloat” with the above changes being made basically simultaneously.

You can’t look at the issue in a vacuum…but I might add that it would be foolish to theorize the situation too much at the same time. THings I am proposing here were the conditions which allowed for a prosperous sector in the past.

I agree that there will be dire consequences should the big three fail. I’m just not convinced that the Big Three will succeed with a bailout. The government is going to pump money into those companies, they will fail anyway, and we’ll still be faced with reduced tax revenue, an increase in unemployment comp, an increase in Medicare costs, etc. etc. etc.

If the Big Three fail, the government is going to be robbing the taxpayer and inflating the dollar a lot more than the amount of the loan being requested; not only will $150 billion in tax revenue be lost, but those thrown out of work will be getting unemployment compensation benefits, those who lost retiree medical care will be drawing funds from Medicare, and those who lost their pensions will be getting money from the Pension Benefit Guaranty Corporation.