Opinions will differ.

 

As far as I understand it... Urban areas of China are state owned while the rural areas are privately owned.

There is a mix of social structures in place. Whatever you might think, it works for them.

 

Marx thought you had to have industrial capitalism before you could achieve communism. Mao thought you could move right from agricultural serfdom to communism.

Oh, maybe those aren't the opinions you are talking about.

 

MY opinion is that U.S. capitalism is not a failure. Loaning money to those incapable of paying it back, bundling bad mortgages to sell as securities and then selling unsecured insurance on the securites is not a sign of the weakness of capitalism. It's just bad business.

 

Bingo. You can't declare a system that has worked well in this country for 230 years a failure because some people in positions of power decided to ignore the rules of capitalism and general common sense.

 

Capitalism works when you let it. One key feature in capitalism that is not being used right now is FAILURE.

BTW: If Wagoner was forced out.....why wasn't the head of the UAW forced out as well since you could argue they had just as big of a role in this as well?

 

Going too far into this would get too far into the realm of politics, which is supposed to be off limits here. Let's just say you can't cook your golden goose.

 

And I agree this is not the place for political diatribes.

As far as news and point of interest goes as it pertains to the forum community, there is nothing in the government determinations that I haven't heard talked about at GM in my tenure.

If politics and special interest < read this to mean votes from big voting blocks be they labor or environmentalists, bond holding mega financials or insurance companies, NADA, etc. > I have no issues. The "IF" is the turning point.

None of the government's points are anything GM didn't already know. I can only suggest that when you are wearing "handcuffs" it's not so easy to scratch, even if you know exactly where the itch is...

 

Very true. Economically speaking, you have to let the inefficient and unprofitable companies fail so that other more efficient companies take their place, and the economy as a whole becomes stronger. Propping up inefficient entities only weakens a country's economy. Now that was economically speaking ... politically there may be (valid) reasons for subsidizing certain segments.

As Z28Wilson says, it's primarily because the UAW is a huge supporter of Obama. But more practically speaking, Wagoner is the head of the company receiving the bailout funds. Gettlefinger is not an employee of GM. Plus he also oversees UAW relations with many other companies besides GM.

 

I don't know. Wagoner was supposedly sent packing because he couldn't get quick concessions from the UAW and bond holders nor could he quickly close more dealerships...

Maybe politics is involved?

 

Yes it worked in the US because there was relatively little competition. In regards to GM and their 50% market share... the only real competition was from Ford, Chrysler and the string of smaller American carmakers. Btw, the US also had a trade surplus back then.

Enter the Japanese...

Then followed the collapse of GM. This during an era of capitalism where barriers were eliminated and the market having to adopt to a new wave of cheaper products due to cheaper labor costs and lower currencies.

The US now has a huge trade deficit. It is 'owned' by the very countries (Japan and China) that have adopted a mix of socialism and capitalism in their domestic policies. They have proven that it works for them.

Therefore, in practice (yes, I am referring to pure business terms):

socialism + capitalism > pure capitalism

The proof is there. The USA is in huge debt to the countries that have applied some commonsense policies. Those countries have protected their manufacturing industries with barriers where the USA has largely ignored their plight.

Meanwhile, I continue to hear that capitalism will fix the global market.

But how do you separate the bad business from the good business using the capitalism model? You don't. You let the bad businesses fail. You let the GMs, Chryslers of this world fail and stand by to watch the whole American auto industry fail. But I'm of the opinion that the market didn't need to get this bad for this situation to happen... if the right policies were implemented a long time ago... along with proper business practices, of course!

 

I can't say I'm glad to see Wagner go, but accountability needs to return to Wall street as well as the Govt...

 

Good point. I'll go further and say it wasn't bad business but high risk business. With high risk comes the potential for big rewards or losses and for a long period of time it was all reward. It's only seen as bad business now because the risk caught up with it. That is the very essence of capitalism. Once the economy rebounds and it will because there will be those who will play the high risk game again. The area, rules and players will change but the draw of risk vs. reward will always instill the spirit of capitalism.

 

Unless, of course, our government, through punitive taxation, effectively kills any and all incentive to take that investment risk. If you know that even if your risk rewards you, the government will then take that reward, why would you take the risk in the first place? I think that's why the folks with the money are sitting on the sidelines, waiting to see what the current administration/congress is going to come up with next.

 

The inclination and "rules" do suggest to let the failed, fail. If the sum of the failure of GM was just that some folks would be out of work, some would lose their investments. The decision would be much clearer. If the failure is encapsulated? That's one matter.

In an entitlement encumbered situation, the answer is not so cut and dried. If a GM folds the taxpayers are on the hook for pensions, unemployment payments, medicaid payments, retraining of workers, home forclosures, home forclosure bailouts, loss of tax revenue.

I am not going to get into the wisdom of safety nets. It's easy enough to agree that they are in place. Government has been undermining the rules of capitalism for a very long time.

It's easy to say that GM or other companies should have played real hardball in tha past when it comes to labor costs and perks. Trouble is, you would not be accounting for the politics which has been in place which hasn't allowed that.

I completely agree that companies need to concentrate on profitable products. IOW, things people want to buy. It's also clear to me that if we are going to play in a completely global arena, the US better concentrate on profitable products being something we offer.

I was an american capitalist, Dr. Deming, who the japanese manufaturers listened to and forged their production turnaround.

There's nothing wrong with capitalism if you practice it well. I contend that capitalism didn't produce the present problems. It was NOT following capitalism that is the culprit.

GM can change. Whether our people as a whole, or a government can grasp what is actually sustainable, is a bigger more pressing issue for all of us.