Oh, I can understand a balance sheet, bring a film in under budget and discern that a financial report from a Canadian producer has got more holes in it than a WWI battlefield -- but some of the other things related to our financial system defy my version of logic.
I really need somebody to explain the current "Bailouts" being instituted by various governments to supposedly prevent our economy from collapsing. Because the more I read about the situation and listen to the talking heads, the more confused I get.
I kinda (though not totally) comprehended the bank bailouts. Apparently banks are just run by people not quite as smart as the guys on Wall street who thought up all kinds of fancy debt instruments and easy credit schemes the poor dumb or simply gullible bankers couldn't see were ultimately worthless even if they really would've made them a shitload of money if they'd worked. And since it was my money the bank had put at risk, I figured the government stepping in might prevent their problems becoming bigger problems of my own.
And here's a tip for all those of you who have a ton of Amway products filling up the garage -- try talking to some bank executives. They might just bite.
Although you should be forewarned that they don't bite whenever I walk in with a sure-fire money-spinner. I might have more actual assets and a better grasp on honesty than most of the guys they've apparently been shoring up, but somehow I'm not the kind of people who can apparently be trusted to build an economy.
Okay, fine. But can somebody then explain why I'm now supposed to bail out the automakers?
If you haven't been paying attention -- the Big Three automakers – Ford, General Motors and Chrysler - are about to (according to them) slip into bankruptcy. An estimated three to five million jobs tied to the auto sector will disappear and hundreds of thousands of retired auto workers will lose their pensions and health benefits.
Dire "End of Days" stuff to be sure and a situation we'd all like to prevent. But I'm not clear on how giving Ford, GM and Chrysler our money solves these problems.
Speaking personally. I haven't owned a North American car since I was 18. I've always been able to find a foreign built model that was better made, more enjoyable to drive and/or cheaper. Christ, I even bought a Jaguar when they were considered a mechanic's personal retirement plan and came out financially ahead of friends who purchased Fords and Chevys.
For the longest time, the B3 have known their foreign competition is head and shoulders above them in quality, customer service and innovation. They haven't addressed those issues and as a result have lost more and more market share. Maybe it's the same question I've been asking about the Canadian Film business for a while -- Why is it essential for me to keep rewarding failure and mismanagement?
Because I want to keep my neighbors working? Well, that would be fine if that's how the B3 operated. But it's not. My province of Ontario handed them around $500 Million a little while ago and all they've done since then was shed jobs -- while hiring more people to build their cars in Mexico, South America and China (where you can get away with paying slave wages).
So even when using semi-slaves these guys can't make a buck? Maybe they've got a problem no amount of my money or anybody else's will solve.
Last week, I was listening to a radio talk show on the issue when a call came in from a guy who worked at the nearby Ford plant in Oakville. He related the oft-heard conspiracy theory about the guy who invented a carburetor that could get 75 miles to the gallon and was silenced by the evil corporations. Only he knew the guy personally, named him and identified him as a loyal Ford employee who was a shift foreman.
In his version of the story, the foreman "who still lives just down the street from me" took his invention upstairs to the execs at Ford, who tested it and found it to be far superior to anything they were using. So they bought the idea.
Only, against all expectations of the guys who built the cars that Ford would soon start installing the invention buddy down the line had invented, the miracle carburetor never materialized. However, according to this radio caller, Ford didn't resort to the urban legend of "disappearing" the inventor. They just turn up at his house on a regular basis to remove the ones he keeps putting on his own car and threatening to sue him for patent or copyright infringement.
So -- Ford owns an invention that could immediately skyrocket their share price and out-distance the competition by miles but it would be better if I just lend them some money instead?
Okay, so maybe we're dealing with a autoworker with a gift for fiction and a line mate he wants to make trouble for. I guess the call's in the archives at Talk640 in Toronto if anybody from the government about to write Ford a cheque on my behalf wanted to check.
But here's something in B&W from a (hopefully) more reliable source, The National Post. Their Saturday headline concerned the difficult times facing our automakers. But if you turned the page of one of the inside sections, you were met with a great big picture of GM's new Camaro, anticipated to come off the line in six months as the most sought after car in the world. According to the Post, more than 600,000 people have already expressed interest in owning one.
So does GM really need a handout, or do they just need to find a way to get that car into their dealerships quicker? Speaking locally, I'd make the Woodbridge outlet and its surrounding population of testosterone fueled young Italian males a high priority.
I also got wondering about a company that sits just a few blocks my Newmarket home, Magna International. Magna makes auto parts and they're also crying for help. But anybody with even a passing acquaintance to the company knows that Magna has lost a fortune over the last decade in the horse racing business, particularly by buying up money-pit racetracks.
They also own a golf course on the border of my city that caters to a very exclusive clientele. Former president Bill Clinton is a regular player and Tiger Woods has been known to drop by to shoot a few holes with hand-picked members of the corporate and political elite.
So shouldn't Magna unload those racetracks or that golf course for the money it needs to stay afloat before they come knocking on my door?
How come it isn't the far-more-wealthy-than-the-average-taxpayer guys, the ones who've enjoyed the perks of playing a round at Magna or sharing a libation at their sports arena private box, who are bailing these guys out?
Do they maybe not have the money, influence or intelligence to do that either? Have we got our own pitiably incapable and self-centered ruling class similar to the Russian oligarchs they make so much fun of?
I mean, why isn't the oil industry, currently swimming in cash, stepping in to support the auto industry which supplies the very gas guzzlers that helped drive up oil profits in the first place? Do they maybe know the handwriting is already on the wall for the North American car makers?
As the B3 crumble, I clean out the garage and find a newspaper from last summer announcing the new Honda Canada headquarters currently being built down the road to, as the local paper says "house its growing sales, marketing and customer service operation teams". Meanwhile, many Financial sites this week featured another announcement from Honda -- that they're building yet another brand new manufacturing plant.
Apparently, people are still buying cars. Just fewer crappy ones. So a lot of those endangered auto workers of ours will likely find new jobs. So why do we have to help out their incompetent bosses?
I always thought the whole point of Capitalism was that the strong survived and those who could innovate and increase value prospered. In the same way that there is no crying in baseball, there aren't supposed to be any "do-overs" in business.
I thought the concept that an idling class takes priority over one that creates something died during the French Revolution. Or did the last few years of prosperity and entitlement bring all that back?
Elsewhere on the web, Billionaire Mark Cuban has launched a site called Bailout Sleuth which is already unearthing indications that some of the places where the bailout money is going are already being hidden from us.
Given the banks and brokerages that are insisting the execs who fumbled this whole situation are still due their million dollar bonuses and just about everybody else with a proven record of incompetence lining up for a handout, I'm wondering if there isn't something else at work here.
Where are the perp walks? Where are the fire sales of the luxury assets of companies who screwed things up for the rest of us?
None of that's happening.
Basically, it's starting to look like what we're funding is a continuation of the charmed lifestyles of the Courtiers who caused all this trouble. The peasants who used to work for Magna and Ford, Chrysler and GM will be without jobs, pensions and health care. While the fops and elites who were supposed to be steering the ship are comfortably on the other side of the iron gates again, still playing golf and betting on the ponies.
Anybody ever notice how much the Magna headquarters resembles Versailles? Am I the only one hearing tumbrels in the distance?
