Horace Heffner wrote:
The world bank needs about a $100B injection of cash. It is going to
be tough to get the research and deployment funding needed to solve
the real problems if we have to bail out the whole world financially.
A case in point: in September the Congress gave automakers $25
billion to improve efficiency and begin the transition to hybrid
cars. Now the plan is to spend that money to pay the bills instead.
Plus I read somewhere (can't find it) that GM is closing its only
hybrid SUV factory. You would think they would close down the regular
SUV factories first.
This is called eating your seed corn.
Not that I would trust GM to make a serious effort to convert to a
new technology. As we have seen, even now GM managers and their
flacks at the Wall Street Journal are denigrating hybrid technology.
As long as the present group of managers is employed, I wouldn't give
the company one dime of bail-out money or R&D money.
I wish they would file for Chapter 11, the way Delta Airlines did,
and leave the taxpayers out of it. Delta came out of Chapter 11 okay
(more or less), but the financial columnists say that for an
automobile company Chapter 11 is like a Roach Motel: you go in, but
you don't come out. This is because customers will not buy a car from
a bankrupt company. Buying a ticket on Delta is not a long-term
commitment, whereas you expect years of maintenance support for a new
car. I guess that's true.
The only good thing about this -- if you want to call it good -- is
the little-known fact that during the Great Depression the U.S. pace
of technological progress, automation and productivity soared. Even
when money was scarce companies spent it to reduce costs and increase
efficiency.
The document Heffner referenced says:
"Policy-makers, regulators and supervisors, in some advanced
countries, did not adequately appreciate and address the risks
building up in financial markets, keep pace with financial
innovation, or take into account the systemic ramifications of
domestic regulatory actions."
This would be more credible if it said: "We the policy-makers . . ."
- Jed
