Friday, December 12, 2008

Cars and Cats

First of all, the Patchy update: Blood work confirms what we already know, that there is some cancer going on. The antibiotics have helped and the swelling had gone down in her toes considerably, but her toes still bleed a little when she puts pressure on them, like when she jumps down off of furniture or something. If the claws on the affected toes don't fall out on their own, the vet may have to do an amputation (essentially like declawing), but hopefully it won't come to that. Frankly, I don't want to have to put her under anesthesia-- I'm not sure she's strong enough, at her age. Otherwise, though, she seems fine. She's eating and drinking well, comes and finds our laps to snooze in as usual in the evenings, and growls at any other cat who tries to usurp her position. It's still all about that attitude!


I see the bright lights in Congress have failed to pass a bailout bill for the auto industry. Nice to see that this historic election did nothing to cure greed, short-sightedness and placing ideology above actually helping people. Now to address a few myths.

  1. The American car industry did this to themselves by failing to make cars that people want. Horse hockey. The auto manufacturers have always done precisesly what the market dictates. Until this past summer when gas hit $4/gallon and above, fuel efficient economy cars only made up 4% of the vehicles sold in the US. This is not because consumers couldn't find economy cars, it's because they wouldn't buy them. Light trucks and SUVs, on the other hand, made up almost 50% of sales. This is why Toyota, Nissan and even Honda (the Ridgeline) introduced new and/or improved full-sized pickups and SUVs for 2008. If car companies could dictate what people drove, then everyone in the early '60s would have been driving an Edsel. Like every other business in the free market, the car industry makes what people want to buy. Period.
  2. The Big Three can't compete with Japan or Europe in making smaller cars. Two of the biggest selling brands in Europe and Asia are Ford and Opel, a GM brand. The best selling luxury car in Asia is Buick. Seriously. WAY more prestigious than a Mercedes! Europe and Asia have not had the luxury of subsidized petroleum prices, so they have been paying the equivalent of $5+/gallon for years. Therefore they demand more fuel efficient cars, and Ford and GM are happy to oblige. However, the price spike this summer took everyone by surprise and an industry as big as the Big Three can't turn on a dime. They need to shut down their North American manufacturing plants and retool them to make small cars, and that takes time and money. These would be very good loans to make (unlike the bailout of the financial institutions, which doesn't seem to have had any effect on consumers or taxpayers whatsoever) because there is every possibility they would be repaid, and that the taxpayers could even make money on the deal.
  3. Unions are the problem. Trust me, the current crisis is not because workers at the Big Three are seriously overpaid. The Big Three have inherited a lot of financial burdens regarding retired workers, especially their health care costs. Actual wages, worker for worker, are comparable to what the nonunion foreign car manufacturers pay in this country.
Right now, the biggest problem that the Big Three have is directly related to the banking crisis, not to anything they have any control over. They have cars to sell and customers who want to buy, but NO ONE CAN GET FINANCING. The credit markets have frozen. GM will not finance a vehicle for anyone who doesn't have at least a 700 beacon score. 700. That's quite high. The average American has a beacon score in the low 600s-- 620 or 630. Most Americans cannot get financing to buy a car, and if they do, they are paying usurious interest rates, like 15%. The banks who have accepted the bailout money are sitting on it, they are not extending credit to lowly consumers.

If you really want to help yourself in this environment, do yourself a favor, close your bank accounts and join a credit union. Credit unions are nonprofit. They don't charge ridiculous fees, and they are much more interested in individual account holders ("members") than they are in trading in shady mortgage packages or investing in credit markets that they don't understand.

Put your money in a credit union and let the banks go under.

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