- Chrysler is asking for an additional $5 billion from the federal government and its action plan calls for, among other things, discontinuing the popular PT Cruiser model. This car was reported in February to be Chrysler’s 4th biggest seller and “with a sales drop of 55%, the PT would sell just 42,384 copies per year at this rate – but it was originally set to sell just 35,000 a year, so it’s still ahead of projections.” The viability plan includes launching 24 new vehicles in 48 months. So, apparently cutting your 4th best seller, a product that is selling more than initially projected even in a downturn, is good policy at Chrysler. In other words, Chrysler took a look around its operations and decided to fix what wasn’t broken. In my book, that ranks right up there with flying on a corporate jet to beg for taxpayer funds.
- Chrysler is predictably blaming its ongoing problems on nonexistent consumer credit issues. According to the Washington Post:
Because consumers are having difficulty getting credit, Chrysler estimates seasonally adjusted annual sales will average 10.8 million vehicles this year until 2012. In recent years, that rate hovered around 16 million.
This is hogwash. The Treasury Department reported today that lending increased in December at the top 20 banks. Getting an auto loan today is more convenient than ever before. Banks are, in fact, lending, but when it comes to Big Three products, consumers aren’t interested. Hyundai, Kia and Subaru all managed to post year-over-year sales gains in January by offering better products and good warranties that aren’t threatened by the specter of bankruptcy. As long as Chrysler is focused on credit markets and federally financed pipedreams instead of its customers, the company isn’t going to turn around and the answer to its begging should be “No.”
- President Obama is sending an additional 17,000 troops to Afghanistan to deal with continuing trouble there. While the increase is needed according to commanders in Afghanistan, we should learn a lesson from the Soviet experience there and the US experience in Iraq – stabilizing Afghanistan will have much less to do with troop levels than with proving to Afghans that their destiny is in their own hands. The increased troops of the Iraq Surge were only effective because they contributed to that end.
A few times a year I’ll get a hateful comment or a bit of hate email accusing me of being out of touch with the common man. The usual comment is along the lines of “rich Republicans like you have no idea what it’s like to…” fill in the blank. I am, you see, a Dot Com Thousandaire and some people find that kind of quadruple digit wealth infuriating.
I thought it would be fun to share a few items from the lifestyle of rich Republicans like myself here on the interwebs. Maybe I’ll even get a few details out there on The Google.
For the first installment, I thought I’d share what rich Republicans like myself drive. Keep reading to see my new car:
Last week I addressed a flaw I saw in the “moral hazard” argument for avoiding any action, no matter how justifiable, on the grounds that it might encourage future risk taking. My point, briefly, was that risk taking is actually something worth encouraging.
This week in The New Yorker James Surowiecki exposes the other half of the flaw in the moral hazard argument. In short, it doesn’t happen. :
Why might the effects of moral hazard be smaller than expected? To begin with, most bailouts aren’t like deposit insurance, which is certain and quick. Financial bailouts are uncertain and messy, and they typically occur only after institutions have already suffered extensive damage. Bear Stearns, for instance, was “saved” only after its shares had fallen almost ninety-five per cent from the previous year, and it seems unlikely that either its laid-off workers or its battered shareholders came out of the experience anxious to engage in more foolhardy behavior.
Again, there are plenty of reasons to be leery of a spending package calculated to be just small enough to avoid the word “trillion,” but moral hazard is an argument that would win few converts even if it weren’t fatally flawed.
American style democracy has come to Iraq:
Officials said on Sunday 7.5 million or 51 percent of the more than 14 million registered voters [voted].
From Saddam Hussein to enthusiastic self-government to American style apathy in 6 short years. It took us almost 200.
Looks like it is time for the troops to come home.