We've had a credit-fueled boom of consumerism these past 30 years or so. Just borrowing from the future to enjoy today. Not a horrible thing, until it goes overboard, which it did.
So to fuel the boom, we've built out excess capacity. An enormous amount. Just a ridiculous amount in consumer banking, and Bend is exactly where it should be in this regard, Far Behind The Times. People are still building banks in Bend. They're still building Everything in Bend.
This is exactly what the auto bailout is about: Taxpayer subsidizing of Excess Capacity. Keep It Alive, Keep It Going.
We don't need it, and No One Can Afford The Products, The Horrible Management, or the Incredible Union Greed, but KEEP IT ALIVE, No Matter What.
We, as taxpayers, are actually being force-fed failure-laden bailouts. We will soon bailout everything. Airlines are probably next. The only thing that won't get bailed out will be companies & industries that don't WANT it.
So what is the upshot? We are expending BILLIONS, probably trillions, to keep excess capacity alive & well. Producing millions of cars we cannot afford and DO NOT WANT. Trillions are being thrown into bank coffers to get us to borrow, but strangely, nobody is.
When it comes down to it, we borrowed to the hilt from the future, and now we can't repay. Everybody borrowed. GM borrowed to build plants. Banks, ironically, borrowed to buy mortgages, and were enriched per transaction. Individuals borrowed and bought the only asset that possibly could have absorbed this much lending capacity, homes, by the millions.
We have too much of almost everything, and we can't make the payments to keep it. Can't pay it off. So "we" have gone to the government & asked for trillions. Well, the banks are getting it. GM, Ford & Chrysler are getting it. Defaulting borrowers are "trying" to get it via Fannie & Freddie's moratorium on foreclosures.
In other words, Idiots Are Getting Rich and The Responsible & Prudent Are Funding It. Nice.
So what's going to happen? Well, I suppose in the ordinary scheme of things, if you are demanding quantity X of something, and producers are putting out 2X, prices will fall. Right? But falling prices brings on failure, which we are of course, vigorously trying to avoid. So we Have To keep prices artificially high.
So US Taxpayers are in the uncomfortable position of not just subsidizing current production that we do not want & can't afford, but owing well over $10 TRILLION dollars in future earnings to pay off government debts as well. And we will somehow have to keep prices HIGH to avoid failure.
So our money is simply funneled to bank presidents. To union bosses. To government bureaucrats. To every FAILURE in this country.
The More succesful you are, the MORE You Are Penalized. The LESS successful you are, the MORE You Are Rewarded.
And THE BIGGEST FAILURES are actually holding out for the Most:
‘UAW bailout’
It is a mistake to use part of the $700-billion rescue package to reward high-tax, non-right-to-work states such as Michigan, says Peter Flaherty, President of the National Legal and Policy Center (NLPC).
“The automaker bailout is actually a UAW bailout,” Flaherty said. “The union will not allow companies to deploy capital in ways that the market would dictate, such as closing plants and layoffs.”
Under Frank’s legislation, car companies receiving bailout money would face tougher restrictions on executive pay and dividends to their shareholders, the A.P. reported.
NLPC says the UAW wants additional taxpayer money to enrich health and retirement plans it controls. Indeed, UAW President Ron Gettelfinger has urged Congress to act immediately to provide a separate, additional $25 billion in loans so auto companies can meet their health care obligations to more than 780,000 retirees and dependents.
Awesome. The UAW will, HOPEFULLY, finally kill The Golden Goose. They are the 600lb suckerfish on the 20lb gristle-laden near-death automakers ass. I HOPE TO GOD they kill it. Because that is truly what the auto-bailout is: UAW payoff. We are paying big fat tubs of shit $90/hr to do NOTHING. Heard of JOB BANKS?
UAW is The Most Corrupt Bunch Of Greedy Fucks On Earth. Followed By Auto CEO's. There are actually thousands of non-union auto-workers, and extended industry workers, several of whom I Know, who think these two groups deserve each other, and deserve extinction. Even though it would probably threaten their own job. MOST of lower Michigan OPPOSES the bailouts.
What the hell is going to happen? We're paying TRILLIONS to keep alive capacity, predominantly Credit Capacity, that No One Can Pay For Anymore. Even 800FICO's aren't getting money.
Well, I can see a few things happening: Corporate ROI going to 0% or below. We are simply funneling money into products no one wants. Profit is simply (Unit Volume X Price) - Costs. And we are witnessing imploding volumes and prices, while Costs are being kept as high as they ever were. So I see permanent lowering of ROI as long as the Bailout Regime holds.
FAILURE Must Be Be Allowed To Take It's Course.
We are becoming Socialists Speculators. Our Government, is actually putting us into the auto and banking industries via EQUITY holdings. Believe me, they will SOON have us in the housing market. The government will soon start taking over HUGE housing developments. It'll happen.
Innovation Lost. Failure is a CLEANSING PROCESS. Failure MUST happen, or necrosis sets in. We are subsidizing FAILURE, and keeping alive the Dead.
War. We, or someone else, will be at WAR soon.
In China, anger rises as economy falls
The crisis in global capitalism has spelled trouble for the Chinese Communist Party, confronted by public unrest as factories shed workers and investments collapse.
By Barbara Demick
December 12, 2008
Reporting from Beijing — The signs of discontent are small but unnerving in an authoritarian country where public demonstrations are not permitted.
Laid-off toy company workers smash windows and computers and overturn police cars in Guangdong province. Employees of a liquor company in Harbin travel to their company's Beijing headquarters to demand back wages. Taxi drivers, as many as 20,000 of them, scuffle with police in protests that have spread into seven provinces.
Even the police have gotten into the act. Auxiliary officers surrounded a Communist Party office last week in Hunan province to demand higher wages, said the Hong Kong-based Information Center for Human Rights and Democracy.
As China's economy hits the skids, such protests have been sporadic and usually involved fewer than 100 people. But in recent weeks, they have cropped up across the country like brush fires.
"Definitely, this is the most serious problem we have seen since 1989," said Zhou Xiaozheng, a professor of sociology at People's University in Beijing. "You have millions of college students who can't find jobs. . . . You have migrant workers who have lost their jobs at factories and don't have land to go back to."
It is counterintuitive that a global financial crisis that started with the excesses of Wall Street should be undermining the Chinese Communist Party. But academics such as Zhou believe that the economic crisis could present the leadership with its biggest political challenge since the student protests at Tiananmen Square nearly two decades ago.
To a large extent, China's fiscal problems pale next to those of the United States. The unemployment rate is not expected to top 4.5%, compared with the current 6.5% in the U.S. Although the World Bank recently slashed China's growth forecast for next year to 7.5% from more than 9%, even the lower figure keeps it at the top of the pack.
The problem is that ordinary growth might not be enough for a system that's been sustained by double-digit gains over the last five years. New York University economist Nouriel Roubini predicted last month in a widely quoted newsletter that without 9% to 10% growth, China is headed for a "hard landing."
Security in growth
It is the conventional wisdom that Communist Party rule has survived into the 21st century because of the nation's extraordinary economic growth. China watchers often speak of an implicit bargain between the people and the party: Give up demands for democracy and free speech and we'll make you rich.
"I think the leaders are scared stiff," said Susan Shirk, a professor at UC San Diego. "Certainly the Chinese Communist Party leadership believes there is a connection between economic growth, social stability and the survival of one-party rule."
Even members of the intelligentsia have become more vocal, demanding political change in a petition released this week that was modeled after the 1977 one that challenged the Soviet Union's domination of Czechoslovakia. "In the world, authoritarian systems are approaching the dusk of their endings," says the document, signed by more than 300 prominent people.
What makes the government especially vulnerable is that the people hurting financially have few legitimate outlets to air grievances. Unable to vote out their leaders, strike or collect compensation from the courts, they protest. And when the police wade in, things can quickly turn violent.
That's what happened Nov. 25 after 1,000 workers were laid off from the Kai Da toy factory in Dongguan, a southeastern city often called the real-life Santa's workshop because of the toys manufactured there.
As one former worker, a 36-year-old mechanic who agreed to be quoted by his surname, Zhong, describes it: A group of workers was in discussions with management about termination pay when a dispute broke out. "We saw the police beating five workers with sticks, several of them unconscious. . . . Then many workers rushed out and surrounded them. Later there were thousands of people there. They smashed police cars, doors and computers."
The economic downturn is hitting hardest in places like Dongguan, where factories once churned out toys, shoes and clothing to satisfy the seemingly insatiable demand of American consumers. Now demand has plunged because of the U.S. recession and the scandals over tainted foods and dangerous toys produced in China.
The Chinese government reported Wednesday that last month, for the first time in seven years, exports declined. In the toy industry alone, figures from the General Administration of Customs showed that half of the 3,631 companies had gone under this year.
Almost all of the workers who are losing their jobs are migrants who may not have any place to return to.
Zhong and his wife, who is seven months pregnant, came from an area in Sichuan province that suffered heavy damage during the May earthquake. "We are just wandering around now looking for work," Zhong said.
Fears of instability
This floating population of the unemployed and desperate is one of the government's nightmares.
"The redistribution of wealth through theft and robbery could dramatically increase, and menaces to social stability will grow," Zhou Tianyong, an economist for a government think tank, said in an editorial last week in the China Economic Times.
But it is not only the migrants who can turn unruly.
Young professionals trashed the showroom of a real estate complex called Glamorous City in Hangzhou, Zhejiang province, after learning that the developer was offering a 25% discount to prospective buyers of units they had paid full price for.
Middle-class Chinese are relative novices when it comes to investing, unaccustomed to the risks of real estate or the stock market -- and quick to blame the government when what they thought could only go up instead goes down.
The anger was palpable at a Beijing stock brokerage where investors sat on a row of orange plastic chairs, sipping tea from jars they'd brought from home and watching the latest indignities flashing on the electronic board of stock prices.
" Hu Jintao and Wen Jiabao did nothing to help," snapped one man in a voice that cut through the background clatter and made the others -- unaccustomed to hearing gripes against China's president and premier spoken so loudly -- turn around to hush him. ("Don't tell the foreigner too much about what's happening in China," hissed a woman sitting behind him.)
The 53-year-old man, who gave his name as Lao Yang, or "old Yang," agreed to lower his voice and the conversation continued. He lost seven years' worth of savings from his job at a machine components factory, which is now closed.
Others with him shared his fury -- retired factory workers, homemakers, a former post office clerk, all had lost large portions of their savings playing the stock market and felt the government had betrayed the laobaixing, the common people, by not protecting them.
"Some people lost everything in the stock market. They sold their homes and borrowed money," said Xiong Huanyong, 66, a retired post office worker. "They think there should have been more regulations."
A basic structural problem in the Chinese economy is that wages and living standards have not kept pace with the extraordinary growth. As a result, consumers aren't prosperous enough to pick up the slack and keep the economy rolling in the face of reduced demand from the United States and Europe.
The Chinese government has lowered interest rates several times, and last month announced a $586-billion stimulus package. More moves are predicted, but economists doubt their effectiveness.
"The government's economic policy is still geared to producing high growth figures, but not to producing jobs or raising people's disposable income," said Mao Yushi, a prominent Chinese economist.
Shirk, of UCSD, believes that protests will accelerate as workers realize such actions can help them get what they want. For example, the laid-off workers at Kai Da received severance of about $900 each after their protest.
But Shirk thinks the government will be able to manage the crisis as long as protests remain localized and the nation's leadership remains united.
"They learned their lesson from the Tiananmen period," she said. "As long as they can prevent public splits, throw the ringleaders of the protests in jail, blame the problems on local officials, they can probably hang together."
Something's going to give in Asia. All has been well for the past 20-30 years, even with Tiananmen, because the Commies Have Delivered. But no more. There's about 1.4 billion pissed off motherfuckers over there, and not nearly enough thugs to hold them off. That country is a powder-keg.
China, India, Pakistan. That area is going to explode. Everyone of those fuckers has NUKES. And don't forget RUSSIA, who will do ALL IN THEIR POWER to foment anti-American sentiment. Or really, PRO-OIL sentiment.
The Bursting Bubble now goes FAR beyond American Housing. RUSSIAN OIL is collapsing. Chinese production capacity is imploding. Pakkie's are terrorizing India. And India is RICH & THEY GOT NUKES. There's going to be a FUCKING WAR.
Plan Folks. Plan. This crazy fucking blog has been beating the drums for TWO YEARS. "BEANS, BULLETS, BOOZE, BULLION". DO NOT for a second think that can't happen. Don't think for 1 second you can't be relegated to GROWING YOUR OWN FOOD. And SHOOTING YOUR FUCKING NEIGHBOR TO KEEP THEM FROM TAKING YOUR SHIT. EVEN WHILE YOU ARE STEALING THEIR SHIT!
The recent local rash of shootings, robberies, and assaults is NOT a statistical oddity. People are getting desperate. Unemployment EXPLODED in Deschutes County over the past year. And it's going to get far, FAR worse. This fucking place will be a war zone before it's over. Instead of reading about someone getting shot, YOU'LL KNOW SOMEONE who Got Shot.
So what's the solution to the Armaggedon Scenario? Actually Armeggedon IS THE SOLUTION. Got too many factories? Too much productive capacity? Too many unemployed?
There's One Very Effective Solution: WAR.
War tears shit up, right quick. War kills motherfuckers who would otherwise be robbing you. War will put people back in Chinese, Indian, and Pakkie factories. At least until they are nuked.
We are going to war soon. What do the RICH WORRY ABOUT? That's right, KEEPING WHAT THEY GOT. And India & China have watched the money pile up over the past few decades, and that shit is threatened now. Don't underestimate the retaliation of a well-funded country.
And what do WE do? Well, if we DO NOT side with China, we're fucking doomed. We OWE THEM $1 TRILLION, at least. In many respects, China runs this 2 bit shithole already. Who will they go after? India? Japan? Fuck, who knows. But it'll be US against THEM. And whoever THEM is, they have been our "Allies" for a long time.
Some whacked shit is going to happen. Government-owned EVERYTHING. Including your house, maybe. A tax-rate hike is coming that'll probably kill another 10-20% of this countries small businesses. And not just Federal. All the way down the line.
Hunker down, Folks. The Big One is coming. War. Depression. Suicide. Remember your 4 B's. Stock Up And Lock Down.
This is Going To Get So Much Worse Than You Thought Possible.
