So you didn’t read my FAQ thread. Lets sum that up. You dispute me calling it the Bush Mortgage bubble. I ask you read the facts where I prove it’s the Bush Mortgage Bubble. Then you just reiterate that its not the Bush Mortgage Bubble. And that’s pretty much your entire post. You simply post “oh yea, what you say is not true .”
There are two things wrong with that sentence. Calling the republican agenda melodrama is being much much too kind. And I don't post melodrama. Do we even need to discuss the republican “melodrama” about the bailout? Anyhoo, here’s Bush’s estimate from December 2008
“The direct costs of American automakers failing and laying off their workers in the near term would result in a more than one-percent reduction in real GDP growth and about 1.1 million workers losing their jobs, including workers from auto suppliers and dealers. “
Fact Sheet: Financing Assistance to Facilitate the Restructuring of Auto Manufacturers to Attain Financial Viability
And when this estimate was made, GDP was expected to be about -3 to -4% of GDP. It came in at -8.9%. And Bush has a little caveat at the end of his estimate that it may affect suppliers and the rest of the economy
“Additionally, suppliers may not be able to absorb losses from writing off the accounts payable owed by auto manufacturers and may not be able to downsize quickly, resulting in remaining auto companies having supply chains disrupted. These effects on our economy could multiply as a result of the failure of these companies. “
GM and C going out of business would have caused many of their suppliers to go out of business . This would have affected not only Ford but the other car companies as well. Its why they all supported the bailout. While the effect on the other car companies may not have been big, it would have been catastrophic to Ford because they had an 80% overlap with GM’s suppliers.
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Ford’s own plan stressed that its ability to survive a recession and return to profitability was not only contingent on how well the total market performs, but also on the short term survival of its domestic competitors, because “Our industry is an interdependent one. We have 80% overlap in supplier networks,” plus many dealers also have operations selling GM or Chrysler products.
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http://www.fas.org/sgp/crs/misc/R40003.pdf
from the same link
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However, the study also notes that the higher shutdown level is unlikely over the long term and that the practical worst-case scenario would be a restructuring and downsizing, with a 40% production loss. This would be estimated to result in 1.5 million jobs lost in the peak year, and a net average loss of just under one million jobs per year through 2014, against what employment would otherwise be.53
Anderson Economic Group/BBK, an international business advisory firm with customers in the automotive industry, produced a separate set of estimates with a different methodology. AEG/BBK’s worst-case scenario was bankruptcy and eventual liquidation of two of the Detroit 3. In this case, they estimated that more than 1.2 million jobs would be lost in the first year, and nearly 600,000 in the second year. Netting out a small number of persons gaining alternative employment, the AEG/BBK estimate was 1.8 million jobs lost over two years among the OEMs, their suppliers and dealers, and others “indirectly” linked to the industry.54
If you contest a point I make, please ask me to back it up. Simply posting “oh yea, what you say is not true" isnt really an argument.
