The industry is "seeking treatments for wounds that I believe to a large extent were self-inflicted, but at a time like this, when our economic future is so tenuous, we must do all we can to ensure stability."
I watched some of the testimony. They had a PhD economist, Peter Morici, testify as well, and it was somewhat amusing to watch him directly rebut the promises that the CEOs were making in regards in becoming profitable in the very near future and being able to pay back the "loan". He cited that only Chrysler was even close to meeting the quality and efficiency standards that Honda and Toyota have in place, as rated by an independent quality assessment firm. Plus, he stated even with major job cuts in an attempt to improve their bottom line, the amount in pension benefits (about $105,000 per employee) that would need to be paid out will cripple their profit margins.
I don't have the annual balance sheets of these automakers (nor do I want them), but I will say that during the whole bull market run from 2003-2007, Ford and GM shares were flat/declining throughout. That implies terrible management. Here's what I would do: While these companies dug their own graves, the ripple effects throughout the whole economy would be horrific if they went under. Therefore, I would give the companies the $25 billion, with the conditions that all 3 CEOs are fired, and new CEOs are hired with proven track records of running profitable companies that produced quality products.
Our economy, bailout or no bailout, is in big trouble. Even Harvard's endowment investments are getting pummeled, as their account has lost 30% of its value this year.
At least health care is safe right?
Read this article: Twenty percent of primary care doctors said they will cut back on patients seen, 10% said they will work only part-time, 11% plan to retire, and 13% are planning on finding jobs that don't involve patient care. Why is this bad? Because there is already a shortage of primary care doctors, and 67% of physicians surveys said they are working at full capacity or are overextended and overworked as it is. Oh, and 60% said they would not recommend medicine as a career. This is troubling, but understandable given what is going on in medicine these days. The demands for keeping up on the latest medical information, trying to manage elderly patients with multiple comorbidities, doing paperwork and fighting claims with insurance companies, and so on are just too much to handle for primary care physicians. That's why a job at a VA hospital is the way to go!
At least rich people in Santa Barbara are doing well. WRONG! More than 210 homes, including many multi-million dollar mansions have been destroyed by the wildfires. Worse yet, evidence is pointing to a bonfire started by 10 college students as the culprit. It's ashame, not only for the homeowners who probably lost priceless memorabilia in the fires, but also because of the added economic stress. California has already spent $305 million on emergency firefighting since July 1st, only $236 million more than was budgeted, and the state has a deficit of $11.2 billion.
Ok, that's enough of this Debbie Downer session. Have a good night!