Rebuild The Big 3

[Nihil Obstat]

Incidentally, it's possible to learn all that by reading only about 30 pages of America's Great Depression by Murray Rothbard.
Since I love you all so much, you may access and save it free of charge and legally [url="http://mises.org/rothbard/agd.pdf"]at this link.[/url]

Edited March 8, 2011 by Nihil Obstat

[4588686]

[quote name='infinitelord1' timestamp='1299568577' post='2219093']
I was born and raised in Flint, Michigan. This area of the United States was one of the best places to live in, in the world, at one point in time. Why is this? The answer is simple. This was the birth place of the Automobile. Three major Corporations arose out of this area. These three major Corporations are known as General Motors, Ford, and Chrysler. The benefits of having three, similar Corporations like this are enormous.
An Oligopoly, by definition, is a collection of large firms that produce similar products. General Motors, Ford, and Chrysler form an Oligopoly. The good thing about having an Oligopoly is that there is still a level of competition. Where as in a Monopoly, there would be nearly no competition, and a corporation would be able to completely control prices on its product. Because the Big Three are an Oligopoly, they are able to have control over the market yet at the same time keep each other in check. So if one were to exceed equilibrium price on its product, and the population was negatively effected, then the other two companies can learn from the mistake of the other. Or if one of the companies was successful at raising its prices on its product then the other two companies can follow suit.
The Automobile industry is a very important industry, in many societies, in this day and age. Most countries who produce automobiles, and sell them on the world market, experience economic freedom. Or in other words, they have money. There are many different car companies today. Many of which are trying to gain a foothold in the United States. In particular, asian car companies such as Kia, Toyota, Acura, Honda, Hyundai, Infiniti, Subaru, Mitsubishi, Lexus, Mazda, Nissan, Subaru, Suzuki, etc. It is important to know which cars are asian and which aren't. I will explain why later. I also want to note that Isuzu is not an asian owned company. It is owned by General Motors. Anyways, because of their presence in the United States, asian Car Companies are taking in a piece of the pie. The stronger their presence becomes, the less economic surplus the United States is able to experience. The money these companies make from sales are benefiting their respective countries more than the United States. I say we put a stop to it.
Probably the very thing that most companies dislike the most is Federal and State Taxes. Before a company starts selling a product it decides the price at which it will sell the product. Knowing the price also dictates how much of a certain product the company will produce. The higher the price of the product, the more the company will wish to sell. However, the goal is not for the company to raise prices. So if the company is willing to sell 100 units of a certain product at $10, then it would sell less than 100 units once taxes are implemented because taxes cut into the profit the company is making. In the case of the Big Three, Federal and State taxes should be lowered. That way the companies would be willing to produce more, and make more profit.
One might see this as a conservative point of view. This is a conservative point of view! And just because it may be beneficial to lower taxes for one company does not mean we should do it for all of them. Just for a few select corporations that have a profound effect on the American Economy. And only when they need it! So right now, the State of Michigan should lower its taxes for the Big Three. The Federal Government should as well. This does not mean that these governments will experience a decrease in tax money. By lowering taxes and increasing profits, other business will be able to build off of the economy that the Big Three are creating. In particular, small businesses. These businesses will create more jobs. The more employees and businesses that you create, the more tax money you will see.
Small business is important in an economy. When small businesses are prominent in an area, the competition is high. When there is a lot of competition then the price of a certain product does not change. When one small business fails the other small businesses, for at least some time, will experience economic surplus. Basically, one business failing does not hurt the economy in this case. Another good thing about having many small business in an economy is that, because they don't have much of an effect on a certain product's price, they begin to compete for the better quality product. Some of the best Pizza Parlors and Ice Cream parlors that I have ever been to are located around the Flint area. It's because the Big Three creates its own economy and small businesses thrive and compete because of it. A good analogy would be how Mt. Rainier, WA creates it's own Eco System in which the rest of the environment is effected by it in a beautiful and positive way.
Many people view the United Auto Workers Union as a threat to big business. Generally, when there is a union, the Corporation forks out more money and benefits to it's employees. This is actually a good thing as long as the UAW cooperates with these Corporations when the Corporations are at low points. The UAW makes sure that Autoworkers get paid enough money to exceed their basic needs. This is how other businesses survive. When a large portion of a population in a city is making $40,000- $50,000/year or more then they can afford to take their families out to dinner or to the movies, for example. Hence, small businesses thriving off of Auto Worker salaries. So long as the Big Three maintains a normal profit everything should be just fine. The goal, for the sake of the economy, should not be to maximize profit. It should be to maintain a profit while at the same time letting other businesses thrive off of middle class salaries.
Another good idea might be to start outsourcing Auto Plants to other states. So long as the other states have similar working standards and taxes as the State of Michigan. This would make sense because the State of Michigan would not be the only state thriving off of this type of business. Other States could start to reap the benefits. Many more small businesses could begin to thrive in other places. People from all over the United States would realize how important it is to have the Big Three. More companies would arise and begin to operate like the Big Three has been operating all these years. All over the United States. You would have higher quality products in your stores. Better tasting Pizza. Better tasting Ice Cream. You could take your family to Disney World at least once in a life time. There would still be rich people in America! The factories can be turned into Tank plants in times of War!!! Theres too much reason to make the Big Three dominant again!!! To set the example!!! Oh yeah, if lowering taxes doesn't work, then I say we start running all these Asian Cars off the road. Except the Isuzu's of course. Then people would have to buy from the Big Three.
[/quote]

German auto workers make good wages. But the Germans decided to invest in creating a quality, high end product. Nobody is going to spend their hard earned money on a shiitake mushroom car. That's not a matter of patriotism. It's a matter of not being stupid.

I drive a Ford Thunderbird. It runs great even though it was made in 1994. If it ever breaks down, I'd prefer, all things being equal, to buy an American made product but I'm going to spend my money on the highest quality product that's within my price range. The end.

[fides' Jack]

[quote name='Nihil Obstat' timestamp='1299612459' post='2219259']
Wanna know why?
Market. Forces.
American car manufacturers are inferior, therefore market forces cause it to be outsourced. We can talk about price of labour, raw materials, taxation, shift in industries, and probably several dozen other factors. These factors all conclude in one thing; it is not economical to manufacture cars in the United States right now. The products are inferior and the industry is not sustainable on its own.
[/quote]

Honkey! That's my new word.

American car manufacturers [i]were[/i] inferior, because the products weren't that great. There's a big reason for that, and that's because George, the guy who makes the decisions, found that if he could skimp on the parts a little bit, he could pocket an extra $500,000 annually. And at the same time, he could get an extra raise (on top of that), bonus, and some vacation time. Of course he's going to sell us out! Later, he also found that labor here is expensive, and so started making the same quality parts (poor) in Asia, where they could do it for 1/10th the cost (because they have slave labor - but we don't need to worry about that here).

Somewhere along the lines, though, Asia started taking after us (again), and now the tides have turned - American cars are now superior to Asian cars. And while Asian cars are beginning to depreciate more quickly, American cars are keeping their value longer. It won't be long until things have completely reversed, and American cars are thought of in terms of longevity and value as Asian cars are now, and Asian cars are simply seen as the cheap knock-off versions.

And it's true that we do have plants here [i]assembling[/i] cars, that doesn't mean that they get their parts here, also.

We need to move all production back to the US, and impose taxes on companies trying to use other nations for their cheap labor. And then it will be economical to manufacture cars in the US.

[Nihil Obstat]

[quote name='fides' Jack' timestamp='1299615403' post='2219289']
We need to move all production back to the US, and impose taxes on companies trying to use other nations for their cheap labor. And then it will be economical to manufacture cars in the US.
[/quote]
That would make it *much* worse. Prices would rise drastically and quality would continue to be inferior (certainly, even more-so) due to lack of competitive forces. Malinvestment remains malinvestment. It must be liquidated and redirected towards productive areas.

Edited March 8, 2011 by Nihil Obstat

[Papist]

[quote name='Nihil Obstat' timestamp='1299613705' post='2219264']
I had mistakenly thought for a moment that you were the one who was so against foreign cars. Had I recognized that you are not, I would have tailored my response to more explicitly agree with you.
We are very much in agreement then.
[/quote]

I am not anti-foreign nor anti-American. I am pro-quality...and unfortunately that is not found in most US cars. On the flipside, I don't believe just b/c it is foreign that it is better.
I like most American car designs, but just can't buy 'em. The US automakers were very arrogant and short-sighted in the 70s. It has come to bite them in the rump. I think it real sad to see those great muscle cars of the 60s to be from an ancient world.

[infinitelord1]

[quote name='Nihil Obstat' timestamp='1299610353' post='2219244']
Right you are. The fact is that American car manufacturers are currently inferior to Asian car manufacturers, therefore, even in spite of American protectionist pressures, they are failing.
I say let them fail entirely. To continue to support them is a drain on resources. It is poor investment with capital that could be directed to far more productive areas.

Incidentally, that's why I also advocate defunding the Canadian Broadcasting Corporation.
[/quote]


How? How are American Cars inferior to Asian Cars?

[infinitelord1]

[quote name='USAirwaysIHS' timestamp='1299607909' post='2219217']
And there we see the motivation. I understand that it must be difficult to see your hometown crumble around you as must have happened over the past few decades, but I don't intend to buy a commodity - especially one as expensive as an automobile - out of charity. If you wish to do so...well, I suppose that's the liberty that a free-market economy gives you.

Or if the foreign manufacturers continued to build more and more of their automobiles and the components thereof here. Jobs is jobs.
Bingbingbing, and that's what it boils down to.
[/quote]


Not out of Charity. To protect the American Economy.

[quote name='Nihil Obstat' timestamp='1299569722' post='2219098']
This is called protectionism, and it is a very poor economic idea.
[/quote]


How is it a poor economic idea?

[quote name='Papist' timestamp='1299616379' post='2219299']
I am not anti-foreign nor anti-American. I am pro-quality...and unfortunately that is not found in most US cars. On the flipside, I don't believe just b/c it is foreign that it is better.
I like most American car designs, but just can't buy 'em. The US automakers were very arrogant and short-sighted in the 70s. It has come to bite them in the rump. I think it real sad to see those great muscle cars of the 60s to be from an ancient world.
[/quote]


I see a lot of people claiming foreign cars are better. But how are they better?

[infinitelord1]

[quote name='fides' Jack' timestamp='1299615403' post='2219289']
Honkey! That's my new word.

American car manufacturers [i]were[/i] inferior, because the products weren't that great. There's a big reason for that, and that's because George, the guy who makes the decisions, found that if he could skimp on the parts a little bit, he could pocket an extra $500,000 annually. And at the same time, he could get an extra raise (on top of that), bonus, and some vacation time. Of course he's going to sell us out! Later, he also found that labor here is expensive, and so started making the same quality parts (poor) in Asia, where they could do it for 1/10th the cost (because they have slave labor - but we don't need to worry about that here).

Somewhere along the lines, though, Asia started taking after us (again), and now the tides have turned - American cars are now superior to Asian cars. And while Asian cars are beginning to depreciate more quickly, American cars are keeping their value longer. It won't be long until things have completely reversed, and American cars are thought of in terms of longevity and value as Asian cars are now, and Asian cars are simply seen as the cheap knock-off versions.

And it's true that we do have plants here [i]assembling[/i] cars, that doesn't mean that they get their parts here, also.

We need to move all production back to the US, and impose taxes on companies trying to use other nations for their cheap labor. And then it will be economical to manufacture cars in the US.
[/quote]


I agree with you. One of the reasons why Asian Cars sell so well in the United States is because of NAFTA. We don't tax their cars enough which makes it easier to sell than an American Car. I say tax the croutons out of them!

[infinitelord1]

[quote name='sixpence' timestamp='1299591261' post='2219134']
i love my corolla.. if american car companies would make cars in such pretty blue colors i might buy them...not to mention the 32 mpg overall... and reputation for dependability...

my parents were LOYAL ford buyers... but then fords were not getting the ratings so they are now all toyotas
[/quote]


The Chevy Volt gets 37 MPG. Plus you can run it on pure electric power and travel up to like 50 miles on that alone. If you live relatively close to your work then you can travel back and forth from work without using any gas at all!!!

Overall, Chevrolet gets the best fuel economy in the world. Do the research.

Edited March 9, 2011 by infinitelord1

[infinitelord1]

[quote name='USAirwaysIHS' timestamp='1299607909' post='2219217']
And there we see the motivation. I understand that it must be difficult to see your hometown crumble around you as must have happened over the past few decades, but I don't intend to buy a commodity - especially one as expensive as an automobile - out of charity. If you wish to do so...well, I suppose that's the liberty that a free-market economy gives you.

Or if the foreign manufacturers continued to build more and more of their automobiles and the components thereof here. Jobs is jobs.
Bingbingbing, and that's what it boils down to.
[/quote]


Of course motivation. But also an understanding of what is going on.

[Nihil Obstat]

[quote name='infinitelord1' timestamp='1299652997' post='2219447']
How? How are American Cars inferior to Asian Cars?
[/quote]
From most, if not all consumer reports on quality it is considered common knowledge that foreign cars, specifically Japanese, tend to be more reliable on average.

[quote name='infinitelord1' timestamp='1299653195' post='2219448']
How is it a poor economic idea?
[/quote]
I've explained above. It protects poor investments that are stuck in an unsustainable industry. Those investments should be liquidated and moved to productive industries. Protectionism inevitably leads to supply shortages, higher prices, and lower quality because of the nature of taxation, the nature of competition, and the nature of capital investment.

Edited March 9, 2011 by Nihil Obstat

[Jesus_lol]

Last time i checked , 32 mpg was not that good. Top Gear had a production Jaguar touring car with a twin turbo large engine, that made high 30s. other cars from VW and a few from asia are doing as well as 50-70mpg.

Last time i checked , 32 mpg was not that good. Top Gear had a production Jaguar touring car with a twin turbo large engine, that made high 30s. other cars from VW and a few from asia are doing as well as 50-70mpg.

[infinitelord1]

Chevy Volt...

37 MPG Gas Only
Travel up to 50 miles on electric only

[infinitelord1]

[quote name='Jesus_lol' timestamp='1299655596' post='2219457']
Last time i checked , 32 mpg was not that good. Top Gear had a production Jaguar touring car with a twin turbo large engine, that made high 30s. other cars from VW and a few from asia are doing as well as 50-70mpg.

Last time i checked , 32 mpg was not that good. Top Gear had a production Jaguar touring car with a twin turbo large engine, that made high 30s. other cars from VW and a few from asia are doing as well as 50-70mpg.
[/quote]

Your comparing hybrids to normal cars. I think Honda makes a hybrid that gets equivalent of 70 mpg (electric) on the Highway. The Chevy Volt, in comparison, gets equivalent of 97 MPG on electric (Highway). Its the best Hybrid out right now. Plus its sharp.

37 MPG is not Highway milage. Its overall milage. I would be willing to bet it gets more like 44 MPG (Gas only) on the Highway.

Do the Research. Chevrolet gets the best fuel economy in the world right now. HMMMMM....perfect time to buy one since gas prices are nearing $4/gallon.

Edited March 9, 2011 by infinitelord1

[infinitelord1]

[quote name='Nihil Obstat' timestamp='1299654444' post='2219453']
From most, if not all consumer reports on quality it is considered common knowledge that foreign cars, specifically Japanese, tend to be more reliable on average.


I've explained above. It protects poor investments that are stuck in an unsustainable industry. Those investments should be liquidated and moved to productive industries. Protectionism inevitably leads to supply shortages, higher prices, and lower quality because of the nature of taxation, the nature of competition, and the nature of capital investment.
[/quote]


I think because the Big Three is a Oligopoly its a different than what you are talking about. You say that it leads to higher prices but it doesn't. The Big Three are still competing against each other so they regulate prices. Nobody else has to step in and do so. Plus as far as price goes...each company produces cheaper model cars and more expensive model cars. We can still buy cheap cars if thats all we can afford.

You say these things yet the industry was successful for nearly 100 years. It wasn't until foreign car companies starting to move in until American Cars started to decline. The Competition is unfair...Foreign cars don't get taxed when imported. Which makes it easier to produce more of them and make more profit. The Big Three are facing unfair competition. I don't even know if you can call it competition. Its like competing against someone in bowling and the other person is spotted 50-100 pins.

Edited March 9, 2011 by infinitelord1