Tuesday, December 02, 2008

Quick Notes -- Holiday's & Bailouts

Welcome to another edition of Quick Notes. I am sorry for the lack of posts over the last week or so. The holiday and the job that keeps the roof over my families head have kept me busy. I was able to catch my breath for a minute or two today, and I thought I would spend some time with my readers. Let the Quick Notes begin!

Bailouts --
The Big Three auto exec's are heading back to Congress to beg for money. Instead of private jets, they are driving hybrids this time. I still believe that it would be a terrible idea to give these companies the billions they are asking for. If the government bails them out, they won't make any of the changes they need to make to stay in business. These companies didn't suddenly discover they were out of money. This has been coming for a long time. If we bail them out, it will only delay the end. These companies have made some pretty big mistakes to get to this point. They, and not the taxpayers, need to fix those mistakes.

The conventional wisdom seems to be that a new Congress working with President Elect Obama will give the auto executives the loans they are looking for. However, most people believe these loans will come with strings. GM, Ford, and Chrysler will be forced to make more hybrids and more "green" auto's in order to get the money. Hybrids and green technology isn't going to pull these companies back from the brink of bankruptcy. It may be that nothing will save these companies. However, Toyota, Kia, and other foreign companies are making and selling cars in the United States. Maybe Ford, GM, and Chrysler should leave Congress alone and research what the other car companies are doing right.

State Government Bailouts -- The Governors of 48 states have now gotten into the bailout act. They met with President Elect Obama today to discuss a bailout package for state governments. Many of the governors are trying to avoid the term "bailout". Instead, they are asking for a "$100 billion aid package" to go with a purposed $136 billion infrastructure package. I believe Congress, Obama, and many states governors hope that we can throw money at the recession and it will go away.

California represents about half of the total projected budget shortfalls that 31 of the states are facing. California, and many of the other states, should examine their current budgets. Dump the items that aren't critical and then reevaluate your budget. Tough times require tough decisions. Governors are elected to make those tough decisions, not pass the buck to someone else.

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