Posted by Adam de Angeli on 12/06/08 12:16 PM Last updated 12/06/08 12:22 AM   [Newer: Brainstorm before the conference call] [Older: New site feature]

I am as happy as anyone to see Peter Schiff humiliate the statist mayor of Lansing on the air, but I do not like to see Peter Schiff, like his opponents, refer to this as "bailing out Detroit."

First off, Flint and Detroit fell to ruins years ago and acting like the "automotive" (will explain the quotation marks in a moment) companies are just suddenly coming for money because as they would say, "Detroit will suffer if you don't bail us out" is faulty cause and effect.

The "automotive" companies left Michigan for Mexico and right-to-work states long ago, because Michigan's economy was stifled by union bosses and Third-World competition. Michael Moore made Roger and Me what, nineteen years ago? That was Flint then.

And second, it's a little-known secret that the "automotive" companies make most of their money the same way other companies their size do: by playing with money. They're "automakers" as much as McDonalds is a "food company." McDonalds is a franchise company. GM is a financial services company that makes cars on the side.

Please, stop letting them use the people of Michigan as a political weapon, a club to beat opposition over the head with. They say, "Oh, go ahead and bail out Wall Street, but you're not human enough to bail out Detroit!" No, real free-marketers opposed the Wall Street bailout, and not one human living in Detroit is likely to get a dime from the proposed "automaker" bailout.

Politics is a war of words. When someone claims that the "automaker" bailout is for Detroit, don't hesitate to observe that it isn't for Detroit, and they aren't automakers by trade anymore.

Posted 12/06/08 10:19 AM Fu Manchu Belleville, MI

Couldn't have said it better. In my opinion it was government regulations and taxes that has done the most harm. (that surely isn't limited to the auto industry!) This is all such a mess... Do I believe in bailouts? No. Do I believe the big 3 going under would be detrimental to the economy, not just Michigan's? Yes. Sigh. Guess I'll just run outside and make some snow angels...

Posted 12/06/08 12:57 PM Bjorndahl Ventura, CA

I do enjoy making snow angels. Wait for me Fu.

Posted 12/06/08 1:50 PM RCC333 Northwood, NH

"Politics is a war of words." Man, do I ever agree! And the sad thing is, there is no war in truth and facts, found right in our constitutions - but politics has been reduced to lies and truth in a constant state of argument. No wonder a friend of mine says that if things actually followed the constitutions, state and federal, there'd be no more debate, or at the least, it would be so brief. Such a great post - thank you so much for all that information, which I will pass on to folks who bring up the auto bailout (and many have and continue to bring it up!) Fu and Bjorndahl - I like snow angels and snow angles - eight foot drifts up to the rafters, bring the angles and angels on! :D

Posted 12/06/08 2:24 PM Tony DeMott Ypsilanti, MI

How true, They have "Bailed out" on Detroit and Flint a long time ago. I grew up in Flint and most of my family (all former auto factory employees)still live there. I've seen first hand what they will do. To use Detroit as an emotional cruch is slimy at best. Why should we support giving them money? Will they promise to bring production back to my hometown and my family?

Posted 12/06/08 2:41 PM BruceKoerber Cedar Rapids, IA

Good point. All of these bailouts are intended to do two things: 1). To transfer as much wealth as possible to the unConstitutional coup and its associates before 2). the dollar collapses as the world reserve currency so that a new worldwide fiat currency can be thrust upon the peoples of the world by these same power-rich schemers. The people of Detroit or 'Detroit' will not benefit from the bailout except for the ones connected to the corruption emanating from the corporatists. It appears the Mayor of Lansing is one of the bottom-feeders hoping for scraps. The members of Congress are part of the problem, not part of the solution. Unless and until they defend and uphold the Constitution against enenmies foreign and DOMESTIC they are traitors and should be treated as such. Let them know that the yellow stripe down their back is very visible and unacceptable.

Posted 12/06/08 3:28 PM obsolete29 Crossville, TN

In the context that it's being used, I've read Detroit to mean the US Auto industry, not particularly the actual state of Michigan or the city of Detroit. /shrug.

Posted 12/06/08 3:33 PM BradG Commerce Township, MI

Simple Question: We gave a trillion dollar bailout to the banking industry to liquidate assets. Banks lend money to businesses. Has anyone even heard this mentioned in WA that "gee, we gave all this money to banks so they would start lending, yet a large, domestic industry needing only a tiny fraction of the "liquidity" we have infused into the market, is here, instead of at the banks? I am not an expert on economics, i work in the medical field, so if i am way off base, please correct me, if not, why has this never been mentioned??? Also, if these hearing between a congress, with approval ratings in the teens, that could never manage a budget (let alone balance it), never cuts spending, never live within their means, impose standards on Auto companies while not enforcing any type of fair trade is not the most severe case of the pot calling the kettle black then i would like to see it. In fact when i hear congressmen lecture the car company CEO's i am tempted to send the CEO's band aids to use on their tongues.

Posted 12/06/08 4:59 PM Felegund Jonesville, KY

Brad your observation is just more logical proof that the 'Bailouts' have nothing to do with economic restoration. There's no denying that it's going to hurt this country when those businesses fail. A large company doesn't often go under without repurcussions. But it's only going to be worse if we turn working for American automakers a form of welfare, a second New Deal policy.

Posted 12/06/08 5:34 PM BradG Commerce Township, MI

Felegund, Thanks for your response. I am sure that we all can feel nothing but sympathy for the thousands of autoworkers and parts suppliers being laid off, in fact we all know many people who are struggling, just yesterday 2 of my close friends were laid off. Most of us have had the same experience. My point being, we cannot be, as supporters of constitutionality, dismissive of their "beefs" with what is going on. After all, i did not see Citi or other banks in front of congress being grilled and humiliated, and most here take offense to that. It now seems that congress will give a small bridge loan, and then once Obama is in office will give more money, then take credit for "saving" the American auto industry. As believers in the message of Ron Paul, we must have a message that appeals to these people, no more NAFTA and other unfair trade agreements, as well as other messages. We must also address, as many need to gain new skills, why PUBLIC FUNDED universities are raising tuition beyond what any working American can afford. No one should have to refinance a house to go to a public funded university. We, in MI have so many of these issues, most people have simply thrown up their hands and choose to live in "i cant do anything about it" land. We must develop in the next few years a strong, unified message that appeals to all thinking people in our communities. Lest we be damned with the same politicians and (no choice) choices we have now.

Posted 12/06/08 6:17 PM maynard021 Las Vegas, NV

i have lived in michigan all of my life and in recent years i have seen michigan kill itself ... the reason why the state government is so interested in the auto industry is due to the fact they have taxed the corporation to death ... the headquarters are still in michigan so the profits still flow through michigan thus the state gets a cut ... the workers(unions) are just as guilty as the state government taking their piece of pie along the way too ... as in all large corporations the ceo's got theirs too ... as ron paul has said many times we must let this market liquidate to heal ... these companies must go bankrupt to clean out the ceo's, bad for the company union contracts, and unfair local taxes from the state of michigan ... only then will the auto industry become healthy and competitive

Posted 12/06/08 6:57 PM ifc69 Midland, MI

Had we let them fail a long time ago, the parts manufacturers would've had more companies to invest in. Instead we propped up the monopoly even further and forced the parts manufacturers into putting all their eggs in one basket. This system of "government knows best" regulation obviously does not work.

Posted 12/07/08 03:48 AM trestradapalma Edgewater, MD

http://tomasestradapalma4today.blogspot.com/2008/12/gm-ceo-rick-wagner.html G reed drawn up.

Posted 12/07/08 5:06 PM sweetliberty Saint George, UT

:) Nice post.

Posted 12/08/08 06:24 AM JJR1985 Shelby Twp., MI

Very good posts on here. Adam makes a good point that Detroit will not see one dime of this proposed bailout. In all reality he is probably right. To the Michigander's on here: I feel your pain. My father was laid off Friday afternoon, and hasn't been unemployed in 25 years working for various suppliers. Since the industry has started offshoring he has managed to find work with the little that is still in state and country. Over the last 8 years he has made less, but has managed to hold together our standard of living. Many say that foreign competitors can do better work than many of the domestic suppliers, but I beg to differ. Many of the companies that he has worked for have used some of these foreign suppliers and they continuously make horrid mistakes which result in greater costs :). One of the greatest cost drivers of an automobile (big three) is direct labor (UAW!). This is what really stands in the way of better big three quality and efficient domestic production. Beside the UAW the other issues would be heavy regulation, taxation, and trade agreements that allow foreign nations to deal under the table without having to truly compete. Thus, always giving them the advantage.

Posted 12/08/08 09:27 AM doug4all Clarkston, MI

Hi Adam, While I agree with a number of your comments, there is a lot of distortion on both sides of this issue. JJR1985 gets pretty close to the truth; for years now, we have watched the US Auto Industry fight against a prevailing tide of one-sided trade agreements, dollar mercantilism (which can only exist because the U.S. government can't stop borrowing), and a U.S. public that has bought into the Japanese-engineered myth that U.S. companies can't compete with the rest of the world. We CAN compete, but not with a stacked deck. Yes, unionism is partly to blame, but if you believe in free association, unions have every right to exist - just not with government support. As I've said before - can NAFTA, CAFTA, WTO, and every other trade-distorting agreements. Stop the U.S. government from borrowing, and for God's sake: don't let Congress tell our automakers what they can and can't produce. I thought this was the US, not the USSR.

Posted 12/08/08 12:40 PM Andrew Sica Woodbury, CT

Great article on LewRockwell.com about the VAT in Europe and it's effect (or the myth that it has an effect) on U.S. auto imports there: http://www.lewrockwell.com/boukhonine/boukhonine12.html

Posted 12/14/08 11:19 AM k8cpa Lincoln Park, MI

Obviously written by someone who's never lived here or has no one in the auto industry. One words punk. get bent Thanks for insulting my Father. (31 Years G.M.) http://www.politicalbyline.com/2008/11/30/thank-you-for-your-support/ Idiot. No wonder your little messiah Ron Pauline didn't win the election. Now watch the fascists on here delete my account.

Posted 12/15/08 01:47 AM Adam de Angeli Ann Arbor, MI

You think GM is going to give your father a share of the proceeds, k8cpa? GM is wielding Detroit's autoworkers as a a weapon to justify billions of American dollars being taken from everyone else and given NOT to the workers, but to the BANKERS. The automakers already ditched Flint and Detroit. Michigan's economy is the worst in the nation. It's not "us against Detroit" it's "us against the failed financiers who RUINED Detroit." I have admiration for your father, and hope the "auto" (finance) companies stop exploiting him for their own political gain.