Bacon's Rebellion

Democracy Thrives in Sunlight

GM Versus “Boomergeddon”

—

by

James A. Bacon
in

G

eneral Motors, long considered by some as a hopeless dinosaur, seems to be embarking on an historic comeback. It launched an Initial Public Offering of new stock for the first time in 18 months and on the first day of trading, shares were up nearly 7 percent.

Proceeds from the IPO will be used to help GM pay back the federal government for the $49.5 billion that it was given as it was losing billions of dollars, facing tremendous health care and pension debt and seemed to be stuck with boring, loser products.

Yet with the federal money, GM seems to be turning itself around remarkably quickly. It has made $4.07 billion so far this year. Other highlights include the introduction of its electric Volt car and continued sales of winning products such as the Chevie Equinox and the Buick LaCrosse.

So, what is this, a happy news story?

Not if you read “Boomergeddon” it isn’t. According to author James A. Bacon, who launched his doom-and-gloom book only this August, GM is a Exhibit A of failed U.S. corporate management, overly powerful labor unions and an Obama Administration that can be easily pushed around.

To quote Mr. Bacon:

“Under Obama, some $49 billion in TARP money went to keep General Motors alive, while billions more went to Chyrsler. The stimulus inata showered billions more upon favor seekers with any remote connection to conservation and renewable energy: wind turbines, solar cells, clean coal technologies, carbon dioxide sequestration, smart grids and high-speed rail. Apply for a grant, pitch a good story and win some money.”

I particularly like that last, loaded sentence. “Pitch a good story.” “Win some money.”

There may be some problems with the GM IPO. Holders of earlier stock get nothing. But it still looks like Obama made a good bet with GM. It may be news to Mr. Bacon, but this icon of American industrial power might not be dead just yet. If Jim is so wrong on GM, could he also be wrong on the federal deficit and debt?
Maybe there’s no “Geddon” with the “Boomer.”

Peter Galuszka

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86 responses to “GM Versus “Boomergeddon””

  1. Larry G Avatar
    Larry G

    but TARP was Bush – right?

    Obama got blamed for not REVERSING Bush if you can believe it.

    and Never-mind that FORD would have been forced into bankruptcy also – more the better for the union haters…

    they so hate the unions that they'd rather see the country plunged into a 20% unemployment full blown depression than offer one dollar in bailout to a company that is unionized.

    The biggest mistake that the conservatives cannot get our of their respective craws is that companies that fail are supposed to go broke – no excuses.

    And anyone who breaks that rule including those who don't reverse previous Presidential decisions is a "socialist" even though the same folks have never ever called the author of the TARP bailout – Mr. Bush – a "socialist".

    Apparently you get a get out of socialist jail card if you are sufficiently war-like in your foreign policy.

    I am no lover of bailouts nor stimulus … but necessary evils in the Perfect Storm events of recent.

    I have no doubt at all that we'd have 20% unemployment right now had we not done the tarp/bailout but those who feel we violated the basic tenets of capitalism see it as capitulation to socialism.

    They have quite so throughly stuck that burr to Obama's butt that the actual truth that Obama did not create the TARP is just downright irrelevant.

    It proves the man is a socialist and don't confuse anyone with the facts.

  2. Hydra Avatar
    Hydra

    Capitalism is a social system in which all property is privately owned. To conservatives it is ideally laissez-faire capitalism in which individual freedom is paramount and government does nothing.

    They have forgotten entirely that it is first of all a social system.

  3. RBV Avatar
    RBV

    Today congress killed a bill that would have extend unemployment insurance to millions of Americans.

    The same group will likely pass legislation that will extend tax breaks to the wealthiest Americans…..along with the middle class (what's left of it).

    Most of GM's future growth is predicated on selling/building cars in China – not America.

    Merry Xmas.

  4. Larry G Avatar
    Larry G

    Well of course, China's middle class numbers about 300 million.

    WallMart, McDonalds and other iconic American companies see China as a major opportunity.

    Of course China is one of those nasty socialist ….heck communist countries that, in theory, should function like one big commune.

    The two biggest threats to America are religion and strident ideological zealots both of who see the world in black and white and are intolerant of those who insist the world is not.

  5. James A. Bacon Avatar
    James A. Bacon

    Larry, Point of accuracy: Bush started the GM bailout ($13.4 billion) but Obama followed up with another $36 billion in bailout money.

    Peter, Yeah, GM is a great success story… Under the wise and benign tutelate of the Obama administration it's making money again.

    Of course, some of it's new-found profitability may have something to do with the wiping out of debts, the pillaging of bond holders (I waste no sympathy upon stock holders), $50 billion in federal subsidies, a $45 billion tax-loss carry forward (a benefit normally lost to companies that emerge from bankruptcy), and federal credits worth $7,500 per car for GM's hot new automobile, the Volt.

    Let's see, GM has paid back $9.5 billion of loans from the government, and the country will recoup $18 billion from the Initial Public Offering.

    Do you really want to point to GM as an example of the benefits of government intrusion in the economy?

    Well, if you do, let's acknowledge the hidden costs associated with bailing out and/or subsidizing the politically favored — less capital for everyone else. How about this from the Wall Street Journal today: "Fewer new businesses are getting off the ground in the U.S., available data suggest, a development that could cloud the prospects for job growth and innovation."

    "Lack of funding seems to be the biggest problem. Two traditional sources of start-up cash—home-equity loans and credit cards—have largely dried up as banks wrangle with massive defaults and a moribund housing market. Venture-capital firms that typically invest in young companies, as well as angel investors that focus on early-stage start-ups, are pulling back as they struggle to sell the companies they already own."

  6. Larry G Avatar
    Larry G

    further points of accuracy.

    GM was forced into bankruptcy and reorganized and at the end of the day – the involvement of the govt was to save the jobs and to keep the supplies from also going bankrupt along with FORD.

    The problem is that the folks who think ideologically do not think from a practical perspective.

    I do not think that saving GM was any kind of a "triumph" that we should spread to other industries and companies but rather the best of the bad solutions needed to keep the country from dropping into a depression with 20-25% unemployment.

    some of you ideological folks seem to think – "let it happen, those union guys deserve it" without thinking what happens to thousands of other people who are not unionized.

    BTW – there is not a shortage of money right now. The problem is that those who have it are loath to loan it to small businesses which have a high percentage of failures and home equity loans are clearly dangerous unless the credit rating is stellar – which it most often is not with those who seek home equity loans.

    The same folks with the anti-union views have absolutely no problem with having wars and giving tax cuts with money you don't have – adding it to the deficit – and then rather than actually deal with the deficit – go around looking to see who they can blame for the dismal state of the country.

    The ideological people are not interested in solutions at all – just excuses and blame.

    They remind me of young kids in school who don't like the choices they have.. make excuses for not acting responsibly and blame others.

    Hardly any of the folks who hold these ideological views can be classified as grown-ups.

    We had 8 years of these folks..

    8 years to pay for the spending. 8 years to pay attention to Fannie/Freddie and the economy and all they did was stay the ideological course until it ran us into the ditch and now they continue to insist on their ideological non-solutions.

  7. Groveton Avatar
    Groveton

    It seems to me that the US car manufacturers have been in a cycle of mediocrity to failue since the late 1970s.

    I remember the Chrysler bailout which was somewhat justififed because Chrysler made components for tanks for the US military.

    I think it's mighty early to declare success.

    The IPO is hopeful but it was fundamentally a value exchange. The original shareholders lost virtually of their wealth. The government injected cash and a whole suite of incentive programs. Now, new shareholders have bought some of the value recreated by the government. Meanwhile, the government has recouped some of its investments.

    All well and good. However, I've been to this movie. Thirty years ago. With Chrysler. Over the long term … how did that work out? Did Chrysler thrive and continue to add American jobs?

    The core question is not whether the governemnt can prop up a couple of companies. The core question is whether the propped up companies can prosper over the long term.

    Also, let's talk moral hazard. Who can forget the "too big to fail" argumrents from back in 2008 – 2009. Has the US government established a new moral hazard with the US auto companies? Do those who run the companies see themselves as "too big to fail"? Will they take ill advised risks because they are "too big to fail"?

    There are many economically successful developed countries without national automotive companies. There are no economically successful developed countries without a successful national banking system.

    Banking is different than automotive.

    Is Wal-Mart too big to fail? If Wal-Mart ever teeters on the edge of bankruptcy will the US government bail it out? How about Intel? Semi-conductors are a lot more strategic than automobiles.

    Our government bailed out the US automotive industry because of the unions. Both Bush and Obama made a political calculation. They calculated that the automotive company unions could effectively organize their members to vote based on the acceptance or refisal of a candidate to ensorse a bail out. They were probably right in that political calculation. However, let's not try to fool ourselves into thinking this was an economic decision.

  8. Hydra Avatar
    Hydra

    In the end Chrysler failed, but before it did the US got its money back and people kept their jobs for 20 years moore before it failed.

    Based on the end result, it was a failure, but measured as the net result of an entire system it was undoubtedly a success.

    Here again, the Total (System) Cost = Production Cost (of Chrysler) + External Cost + Government Cost.

    But I had this convesarion with one of my conservative friends just today, and he is dead set against any bailouts, let them fail, he says.

    He also claims that the people who put up the money for the Chrysler bailout (American Taxpayers) never got their money back. By his reckoning the government got its money back and then turned around and spent it on some unfunded and unauthorized off-budget expenditure.

    And at least this guy is consistent, he not only believes that we should let companies fail, he believes we should let people fail. Lose your job? Figure out how to survive on your own. Cant figure out how to survive? Then die, too bad.

    If someone wants to save these losers voluntarily, let the church do it, but don't send the bill to the 20% of taxpayers that pay for everything.

    Whew. This guy is intense.

  9. Hydra Avatar
    Hydra

    Bacon is right about what happened to GM bondholders. That was flat out wrong, and upset the applecart on expectations about buying stock vs absorbing debt.

  10. Hydra Avatar
    Hydra

    Economic Decisions and Political Decisions are not mutually exclusive. That is an eight way truth table, and there are two ways it can be economically wrong.

  11. Larry G Avatar
    Larry G

    I don't think anyone is claiming that as a normal and standard thing that the govt should bail out any business – auto or bank, unionized or not.

    I love the right wing mythology about Obama's "political" calculation with the unions as if it was his idea instead of Bush's idea.

    No one has said that Bush was trying to save the unions with TARP – nope.

    but let Obama … CONTINUE the TARP and …NOW it's Obama's idea and it is motivated by his connections with the unions.

    Not a Beep from the Obama-Bashers when Bush was standing up in front of the podium talking about the need to not let GM & Chrysler go under.. but let another President do the same thing – and that guy is a socialist union lover.

    ZERO CREDIBILITY to those folks who can't seem to keep their double standards straight.

    I don't recall a SINGLE Conservative hurling the socialist union-lover label at Bush – why?

  12. Accurate Avatar
    Accurate

    Only the government (and maybe Larry) would consider it a success to buy stock at $43.84 a share and sell it at $33.

    And yes, I had/have NO PROBLEM allowing businesses that can't make it – FAIL. Using the logic of 'we've got to prop them up' why is American Motors gone? Gee, how could they let DeSoto go belly up. Sorry, I don't buy the line that the recession would be worse, longer or deeper. Course no proof now, but to consider GM to now be a success is ignoring facts. Facts like the over $50 billion in direct bailout funds and the tens of billions of dollars in other breaks President Obama gave the company and its unions.

    It also ignores that GM's stockholders and particularly its bondholders had their wealth stolen from them when the government took over ownership of the company. Traditional property right protections were shredded by the Obama administration, making corporate investments in America riskier as a result.

    Oh, and to molify Larry, we both know that everything and anything is Bush's fault. What I wouldn't give to have Bush and all his faults back in the White House now.

  13. Larry G Avatar
    Larry G

    I don't think GM is a triumph at all.. As I said before, saving GM was a bad option but only worse ones existed.

    so we did what we had to do to keep the country from going into a depression.

    I have no problem with GM going broke from here on …

    And I do not think this was Bush's fault either.

    What I object to is the vicious treatment of this President for doing nothing more than Bush did.

    That's what's wrong.

    Bush did the TARP but Bush was not characterized as a Union-loving socialist.

    That's not Bush's fault but it is for those folks who seem to love to hammer on Obama – for the same thing that the said not one word about Bush.

    The truth here is this.

    If Bush or McCain had continued as President – it is almost certain that they would have received the same advice and would have done similar actions..

    What I object to is this corrupt double standard.

    IN 1993 the Republicans sponsored legislation for Universal Health Care with an individual mandate but no one called them socialist back then.

    The people who co-sponsored that legislation were called Gingrich, DeLay and Armey.

    I don't mind honest philosophical differences – argued on the merits.

    But I strongly dislike hypocrisy.

    and it's total hypocrisy to hammer Obama for the same exact thing that Bush did.

    this is not blaming Bush.. this is recognizing hypocrisy for what it is.

    Some of us have no problem with such double standards apparently.

  14. Accurate Avatar
    Accurate

    We'll never know will we, Larry? We'll never know if allowing GM to actually fall into bankruptcy would have worked or if the doomsday scenario that you paint would have come about. We'll never know if McCain would have handled the situation the same way, I can only hope that he would not have. All we do know is what Obama did and what we have now, which isn't pretty from the place that most of us view it. We warned that Obama didn't have the experience and he shows us as being correct time and time again.

    The 1993 republican health plan. Again, it would have had a MANDATE that EVERYONE carry the insurance, I think it would have been as unpopular as Obamacare is. Hillarycare, which was a subset (so to speak) of the republican plan proved to be unpopular, so I believe that the republican plan would have met a similar fate.

    As for being fair in comparing and contrasting Obama and Bush. Sorry, I just can't bring myself to call Obama Hitler (as they did to Bush), no matter if I think it or not.

    Obamacare is a terrible plan. Yes, no lifetime limits, yes no pre-existing clauses are good, but at what costs? In the end, instead of improving healthcare, Obamacare will pull the the quality of healthcare for all of us.

    Before you ask for 'my ideas', first I've stated them before. But more to the point, what difference would it/does it make? Even if I had the answer, complete answer to every question, I'm not in a position to do anything with them.

    Ya know, healthcare needed some help, but a bundle of TNT wasn't what most of us had in mind and we still don't think it's a good idea.

  15. Larry G Avatar
    Larry G

    re: "we'll never know"

    the point is that there were people in BOTH administrations who made conscientious judgments as OPPOSED to Obama slamming union sweet-deals down the throats of those who were opposed.

    Whether or not the 1993 Health care plan would have succeeded or not?

    You gotta be kidding Accurate.

    Who tried to stop the Medicare Part D?

    Who slammed Medicare Part D down the Republican-controlled Congress throats?

    Not Hillary. Not Obama.

    but as important is the corrupt and spineless 180 degree flip-flop from Republicans without a word of explanation about why.

    The Dems have ALWAYS supported HC and in 1993 so did the Republicans.

    But now they are "philosophically" opposed.

    re: "tnt verses good ideas".

    Accurate – the Republicans had 8 years to pass something "better" than Obamacare.

    do you think HONESTLY that ANY proposals whether it came from either party would be acceptable to the people who currently oppose Obamacare?

    If you read the CURRENT Republican Health Care proposal two things jump out at you.

    1. – the proposals are so generic as to be laughable.

    For instance, they talk about how wrong it is for people with pre-existing conditions to not be able to get insurance

    2. – and then they talk about …yes.. GOVT-IMPOSED changes on the business to change the system so that folks with pre-existing conditions can get insurance.

    If you actually implemented that idea – what would happen?

    Premiums would go up for the existing insured – right?

    Do you think any of you guys that are opposed to Obama_Care would not be opposed to a Republican Plan that ALSO increased your premiums?

    I do not think the folks who are opposed to Obama_Care would support anything proposal from any party that deals with the issues that Obama_Care (and Hilary Care and the 1993 HC sought to address).

    The basic problem is "I've got mine – stay the hell away from health care".

    Correct?

    isn't that what this is really about?

    and demonizing Obama is just frosting on the cake…..

    I don't think guys like you are in favor of solutions and what you want is to protect what you have – and that's it.

    You're basically opposed to change if it affect you.

    You probably do not support the balanced budget proposal for the same reasons – right?

    Anything in the balanced budget proposal that affects you – you'd opposed to – right?

    Be honest.

    Do you support what it takes to get to a balanced budget even if it affects you?

    What leaders do you support that have provided a plan to reach a balanced budget?

  16. Accurate Avatar
    Accurate

    The basic problem is "I've got mine – stay the hell away from health care".

    Not really, the basic problem is how do you pay for it without A) raising premiums, which Obamacare is doing to all of us and B) without reducing the level of care so we all get the same bad care. Remember, I did do a stint in the 'free care clinic' – it was better than nothing but just barely. Unfortunately THAT is the level of care that Obamacare will bring us all to. There is no way to to Obamacare without rationing of doctors, services, supplies, operations, etc.

    So you counter, and … well, the answer is and what, and what Larry? As I've asked you before and you refuse to answer, where do we stop? Gee, we give the bum Obamacare but when he gets out of the hospital I really don't think that box under the bridge is going to help with the healing process. So do we GIVE him lodging? And if we give him a place to stay, what good is it if he isn't eating right? He either doesn't have the money, the strength, the will or whatever to get proper nutrition, so do we GIVE him that too???? Your silence to these questions is deafening.

    As for the balanced budget proposals – Larry, I'm proud to announce that no matter IF any of them are carried out OR NOT, they do not affect me one iota. I have not a single skin in that game. I've been through some VERY tough times in the last 10 years Larry and I don't have much to show, I certainly don't own much. So I hope that some of the efforts do go through but regardless of if they do or don't they won't affect me AT ALL.

    So please answer me about how far we are suppose to go to help the homeless person Larry. I've asked the question several times and you've NEVER answered. How much are YOU willing to pay to make sure that homeless person will survive his heart operation?

    Obama is your typical run-of-the-mill democrat in that they will promise you anything as long as you don't ask them how they are going to pay for it. What's worse is that they have now the attitude that we'll just add it to the debt. Obama IS clueless, he's been that way since before he was sworn into office. Gee, remember, it was Obama who said (in contrast to Hillary during the debates) that HE would not mandate insurance coverage; just another lie. He WAS going to take the taxpayer funds for campaign; another lie. And he constantly feels the need to apologize for MY country. Yeah, there is NOTHING that I like about this man.

    But you carry a fine bucket for him Larry; a FINE bucket.

  17. Hydra Avatar
    Hydra

    If being a Boomer is geddon me one of those honeys in the pink dress, sign me up.

    Send the bill to my children, it wont be like they got no benefit out of the deal.

  18. Hydra Avatar
    Hydra

    Accurate: premiums were going up anyway, and have gone up under the last ten presidents.

    Only this time there might be a reason for it: more coverage.

    You tell me how the Obama plan is more expensive and provides more rationing and worse care than what happened to me in 1989 (under Reagan, as if that made any difference)

    Paid premiums for thirty five years, got sick, got ejected from the plan, could not buy any insurance at any price, and got zero care under my ( suddenly previius) insurance.

    Then I bought and paid for insurance for my wife, but after 18 months of premiums her insurance was rescinded, retroactively, after her doctor had the gall to order a colonoscopy.

    Obamacare isn't perfect, but if you want to know why I'm unhappy with it, it is because the same freaking insurance companies that robbed me came out the big winners.

    And why is that? Because the Obama plan was almost an exact copy of one the Republicans proposed. – right down to mandatory participation and the public option.

    Yes we will have to draw the line someplace. We are not going to do full body replacements, like some auto insurance does. No one is claiming that universal coverage means unlimited health care, except the liars that dreamed up the death squad story.

    I have even had utterly ignorant and clueless Republicans tell me my story is a lie. And if it was true I'd have grounds for a major lawsuit.

    These are beyond clueless morons who have insurance that hasn't been canceled yet.

    And mine is a relatively good story. It is NOTHING compared to the real horror shows.

    And since the insurors are the big winners, you can count on a lot more horror stories. These guys wont give up until they commit eneough atrocities to cause a full government takeover.

    If you want to blame someone,start with the insurors. Be sure to do it anonymously, so they don't cancel your mom.

  19. Hydra Avatar
    Hydra

    Accurate is correct. Bondholders loaned money to GM with the expectation that if things went badly, they would at least be first in line to get what money there was. It wasn't FM's money, and now it is, since they don't have to pay it back.

    If there is a root causefir all if this including the auto bailout, I still lay it at the foot of the bond rating agencies that let this happen.

  20. Hydra Avatar
    Hydra

    I will listen to and probably support any plan that does not start by reviling the president and end with the idea to repeal health insurance oversight.

  21. Hydra Avatar
    Hydra

    I would bring a homeless dog who got layer off from his job home with me. (And have)

    But a dog has enough sense to be grateful and not rip you off or bite you.

    I would not do the same for a person, probably, but that doesn't mean I'm willing to let him die from homelessness. But that also does not mean I wont let him die, ever.

    That, I cannot guarantee, even to my dog.

    We have to stop confusing health care with death care, and Republicans have to stop deliberately confusing them.

  22. Hydra Avatar
    Hydra

    I'm willing to stop caring for humans as soon as Republicans will let me drop the bodies on their doorstep.

  23. Hydra Avatar
    Hydra

    There are more people studying English in China than speaking English in the US.

  24. Hydra Avatar
    Hydra

    Republicans don't want to be taxed to take care of others.

    Who are they going to tax to bury others?

  25. Larry G Avatar
    Larry G

    well, I thank you accurate because despite the testy language at times – I've learned more about how you feel – and I presume it probably represents others.

    I don't agree – of course.

    Our health care has been going up at the rate of doubling every decade when other countries in the G20 have not.

    Every administration since Clinton has said that if we don't address the problem that it will take up a larger and larger percentage of our GDP and that simply it' not sustainable.

    You said you went to a clinic – did not like it but glad it was available to you …didn't know how it got funded.

    I'd point out to you that most folks in that situation are not that lucky.

    They end up waiting in an ER – sometimes for hours – and it costs YOU because if they cannot afford to be – then YOU PAY.

    Not only do you pay, you pay about 4 times as much for the HC rendered – but that's not all. You pay for their follow on care – which is also more expensive because most people who cannot afford care – don't get it when it can detect and treat disease at the earlier stages so we have, for instance, people who started out as pre-diabetic, did not get treated and now have severe cardiovascular damage that necessitates that heart operation.

    You pay for this guy.

    You apparently don't believe it or you apparently don't believe there is any kind of a solution to it despite the fact that the rest of the G20 has found a way to do it.

    You also probably do not know or care that one of the provisions of Obama_Care is community clinics – on the premise that those who cannot afford it – like yourself once – won't have to go to an ER.

    So I see it as imperative that we do something with health care the same way as I see it imperative that we do something about GM.

    I think it is the DUTY of ANY President to address these issues and the up-front costs are going to make it more expensive initially – but if it works – bend the cost curve.

    I do not think it is a perfect solution especially when people tried to kill it rather than compromise and improve it and no, don't give me the blather about how they were locked out of the process.

    They had 8 years that they were not locked out – 8 years when their plan walked and talked like ObamaCare and they did absolutely nothing to deal with the HC issue much less the deficit or the failing economy.

    If you don't think you would be affected by the recommendations of the deficit commission then you have not read it

    If you have a job – and pay taxes – it will seriously affect you.

    but then we already know how you will react if you are affected – right?

    I don't understand the question about the homeless person.

    You must think that I think that we can and should "save" every person no matter what – the typical "do-gooder" creed.

    Nothing could be further from the truth.

    some folks you cannot save.

    but we have an entire country of people – millions and millions who have or will lose their access to health care that are not homeless.

    continued……

    They are in fact, folks like you. They worked hard. They are responsible but the health care system that we have – as opposed to the rest of the world does not care whether you work hard… have a job… or even take care of yourself.

    Getting and keeping health insurance is a crap shoot in our society these days because the basic premise behind health care was ….employer-provided and you stayed with that employer and that is no longer true.

    As people no longer stay for a career with an employer – they change – and when they change – they lose their HC.

  26. Larry G Avatar
    Larry G

    they can't take their HC with them.

    Every G20 country pays 1/2 what we do for HC and has a longer life expectancy and if you want more/better care than the minimum offered by the G20 countries – you are perfectly welcome to go that route.

    but no matter your job or your career – you and your family receive health care.

    It don't matter if you work for a huge conglomerate or a tiny 2-person business.

    it's a solution. it's not perfect and it has problems….but it's way better than our system of arbitrarily destroying people and families.

    The Republicans supported this concept in 1993 – AND they supported the concept that you would pay for it – the SAME way that right now you likely have that individual mandate to pay or SS and Medicare.

    they had a philosophy then – that HC was a legitimate function of govt just like education is.

    But they've changed and people like you – like the Republicans fundamentally no longer believe that HC should be a responsibility of govt.

    That would be fine with me – if they just told the truth and let people decide on that basis but they are afraid the tell the truth so they lie – and they attack others who do think it is a govt responsibility.

    The Republicans have not offered a plan – an alternative where they would say – ObamaCare is the wrong way and THIS is the right way and after we repeal it – we are going to do it right.

    NOPE. because – they have fundamentally shifted to believe that govt should not be doing it.

    They do not have an alternative just like you do not.

    In both cases, you want to destroy the ONLY alternative that has been seriously put forth in two decades.

    I could respect any opponent of Obama_Care if they ticked off all the bad things they think are wrong with Obama_Care and then proceeded to show their alternative and why – it's better.

    But ya'll are not doing that.

    All you have is opposition with no alternate path to a solution.

    Working to kill something – when you have no alternative is the difference between you and me.

    I'll take ANY alternative proposal that meets the same goal of everyone having access and health care costs similar to other G20 countries.

    It won't cover every homeless person and no, it won't pay for every heart operation but we won't have people dying who have treatable conditions which is what is going on right now.

    I consider what Obama did – his duty and what Republicans did – nothing – to be irresponsible.

    If Obama did the wrong thing in an attempt to deal forthrightly with the problem – and the Republicans have no viable alternative – that they support as a Party then they are worse than worthless.

    They are charlatans and frauds at governance and the idea that folks like yourself would cheer them on in their obstructionism to solving the problems.. is just beyond me.

    I have supported and voted for Republicans in the past when they actually addressed the challenges in a fiscally conservative way.

    They brought common sense to the table and found ways to solve problems without bankrupting the country.

    No more.

    They bankrupt the country with military spending…make no apologies for it …take no responsibility for the deficit and the debt caused by it…

    and they do not "own' the HC problem at all.

    it's simply not their problem …

  27. Larry G Avatar
    Larry G

    this fundamental shift is further confirmed when you look at the ONLY REAL Republican Plan for health care for elders.

    Paul Ryan believes that seniors should get a fund – like a pension plan – and go out into the market to buy their own health care.

    He thinks that if they have a fund – that they can "negotiate" for their care.

    Ryan does not see the current Medicare or SS system as Insurance – like fire, auto, flood that you pay into – and receive compensation when you suffer a loss.

    He think each of us should essentially self-insure by letting us put money aside tax free in a health savings account and when your wife needs a 200K operation and you have 20K in the fund – tough cookies.

    That's the Republican approach to health care.

    If your job provided you with ONLY the HSA option – if every employer in American offered ONLY the HSA option – for you and your family – including when you retired – would you be okay with that?

    If the Republicans were actually honest enough to run on that – to tell the country that their alternative idea for HC was HSA – do you think they' get elected to replace ObamaCare with HSAs with NO insurance component?

  28. Larry G Avatar
    Larry G

    re: GM bondholders – I'm not sure I understand this given the fact that had GM just gone down – is there any thought that the bond-holder would have done better?

    The most important thing was to keep GM from going down.

    I don't doubt for a minute that had we had more time to think it over, that a better way would have been used.

    But this Monday Morning quarterbacking about who shot john as the ship was going down is worthless – ESPECIALLY when it is combined with a virulent anti-union sentiment that when you listen closely to these people – they really did not care how many people were damaged if GM went done – ANYHOW.

    These guys keep saying – get over Bush… but they can't get over GM …

    they're not looking ahead … they're looking back.

    They're continue to blame for GM and the Stimulus and they have absolutely no support of an institutional change towards a balanced budget at all.

    They want to make excuses for Bush and the previous 10 years of Republicans then blame Obama for not handling the near-depression "correctly" and …significantly – they want the tax cuts continued no matter what happens to the deficit and the debt.

    This is how they will govern.

    They will continue to say they want to "cut" government but will refuse to make the "cuts" necessary for a balanced budget.

    The "cuts' are basically cuts to things they don't like – irrespective as to whether those cuts are part of a larger strategy to reach balance.

    Nope.

    As long as ACORN and UNIONS an NPR and their other favorite objects of hate are delt with.. they're happy.

    The balanced budget is a different story and they have zero interest in it – as evidence by the almost total dearth of Republican proposals not only in prior years – but now.

    These guys no more embrace the need for a balanced budget than the man in the moon.

    Half of them would open up a 3rd war in Iran if they could and the other half would have nothing to say about it – just follow along.

  29. Hydra Avatar
    Hydra

    Republicans have knew agenda: get rid of Obama no matter what.

    They would rather have power than progress.

    Dogma with power, no thinking required.

  30. Larry G Avatar
    Larry G

    re: dogma without thinking

    .. control without compromise

    this describes the Republican modus operandi during Bush Years and their angst about not having total control right now..

    they really don't want to compromise.

    they want a control of the government to rule – not govern.

    They had 8 years under Bush to show they wanted to govern and they failed to show any interest in it and worse.. they showed no interest in fixing health care nor balancing the budget.

    the ideology is that tax cuts generate tax revenues and jobs and if it doesn't turn out that way – too bad – it's more important to practice the ideology than getting results.

    Why people vote for that kind of governance is beyond me.

  31. Anonymous Avatar
    Anonymous

    Not just GM but ‘cars’ in general…

    Groveton added very good comments in his 12:12 PM post on 19 November.

    Beyond that two observations:

    1. A lot of rock tossing at empty pigeon holes in this post and in the comments, and

    2. No one addressed the REAL issue concerning cars – Autonomobiles (Large, Private Vehicles) as Dr. Risse calls them.

    The REAL issue is that cars have not, will not and could not provide humans with Mobility and Access in an Urban society. (And without an Urban, technology- based society, cars cannot continue to evolve.)

    No, cars will not be ‘uninvented.’ Humans still ride horses, some even build and ride in chariots. Large Vehicles and Private Vehicles will exist. But they will not provide Urban humans with Mobility and Access.

    There will be a role for some Large Vehicles and Small Private Vehicles well into the foreseeable future but they will not carry humans on a sustainable trajectory.

    Notice how we have picked up Prof. Risse’s use of Capitals? It is so easy, a cave person could do it…

    “Today, over half the working adults cannot afford to buy and maintain a fuel efficient Large Vehicle for private use that is safe to drive on the Interstate Highway system. The Volt (‘car of the year’) cost $41K to buy, operate and maintain the sophisticated systems that make it safe.”

    The above paragraph is a paraphrase from a draft perspective that Prof. Risse recently circulated. It examines what comes after the car that can provide Access and Mobility for humans.

    In the meantime, about GM:

    Why would anyone ‘invest’ in GM?

    The prospect of sales in China? Investing in GM on the basis of potential car sales in China is about as smart as investing in a cookie factory on Mt. Merapi. A lot of ‘free’ heat on Mt. Merapi but it will blow up without notice – and sooner, rather than later.

    The more likely rationale is that the stock market is a gambling venue and if you want to “invest” do it in something that is “too big to fail” as Groveton suggests.

    Sorry, nothing is bigger than the inability to meet ones obligations.

    And on the topic of subsidy:

    Every business owner has been flooded with sales brochures highlighting the “tax savings” from accelerated depreciation up $500,000 for the total cost of new trucks purchased before the end of the year. Lawn contractors are pulling around their trailers with some ‘mighty big’ new pick ups.

    When considering the past and future role of short haul aircraft (less than 500 miles) and the subsidized infrastructure to support them, a friend asked the question:

    Why would ANYONE ‘invest’ in Airlines since 1973 and especially since 2001?

    The same could be asked about cars:

    Subsidies and Too Big To Fail.

    Socialized Risk, Privatized Profit.

    Observer

  32. Anonymous Avatar
    Anonymous

    Not just GM but ‘cars’ in general…

    Groveton added very good comments in his 12:12 PM post on 19 November.

    Beyond that two observations:

    1. A lot of rock tossing at empty pigeon holes in this post and in the comments, and

    2. No one addressed the REAL issue concerning cars – Autonomobiles (Large, Private Vehicles) as Dr. Risse calls them.

    The REAL issue is that cars have not, will not and could not provide humans with Mobility and Access in an Urban society. (And without an Urban, technology- based society, cars cannot continue to evolve.)

    No, cars will not be ‘uninvented.’ Humans still ride horses, some even build and ride in chariots. Large Vehicles and Private Vehicles will exist. But they will not provide Urban humans with Mobility and Access.

    There will be a role for some Large Vehicles and Small Private Vehicles well into the foreseeable future but they will not carry humans on a sustainable trajectory.

    Notice how we have picked up Prof. Risse’s use of Capitals? It is so easy, a cave person could do it…

    “Today, over half the working adults cannot afford to buy and maintain a fuel efficient Large Vehicle for private use that is safe to drive on the Interstate Highway system. The Volt (‘car of the year’) cost $41K to buy, operate and maintain the sophisticated systems that make it safe.”

    The above paragraph is a paraphrase from a draft perspective that Prof. Risse recently circulated. It examines what comes after the car that can provide Access and Mobility for humans.

    In the meantime, about GM:

    Why would anyone ‘invest’ in GM?

    The prospect of sales in China? Investing in GM on the basis of potential car sales in China is about as smart as investing in a cookie factory on Mt. Merapi. A lot of ‘free’ heat on Mt. Merapi but it will blow up without notice – and sooner, rather than later.

    The more likely rationale is that the stock market is a gambling venue and if you want to “invest” do it in something that is “too big to fail” as Groveton suggests.

    Sorry, nothing is bigger than the inability to meet ones obligations.

    And on the topic of subsidy:

    Every business owner has been flooded with sales brochures highlighting the “tax savings” from accelerated depreciation up $500,000 for the total cost of new trucks purchased before the end of the year. Lawn contractors are pulling around their trailers with some ‘mighty big’ new pick ups.

    When considering the past and future role of short haul aircraft (less than 500 miles) and the subsidized infrastructure to support them, a friend asked the question:

    Why would ANYONE ‘invest’ in Airlines since 1973 and especially since 2001?

    The same could be asked about cars:

    Subsidies and Too Big To Fail.

    Socialized Risk, Privatized Profit.

    Observer

  33. Anonymous Avatar
    Anonymous

    Not just GM but ‘cars’ in general…

    Groveton added very good comments in his 12:12 PM post on 19 November.

    Beyond that two observations:

    1. A lot of rock tossing at empty pigeon holes in this post and in the comments, and

    2. No one addressed the REAL issue concerning cars – Autonomobiles (Large, Private Vehicles) as Dr. Risse calls them.

    The REAL issue is that cars have not, will not and could not provide humans with Mobility and Access in an Urban society. (And without an Urban, technology- based society, cars cannot continue to evolve.)

    No, cars will not be ‘uninvented.’ Humans still ride horses, some even build and ride in chariots. Large Vehicles and Private Vehicles will exist. But they will not provide Urban humans with Mobility and Access.

    There will be a role for some Large Vehicles and Small Private Vehicles well into the foreseeable future but they will not carry humans on a sustainable trajectory.

    Notice how we have picked up Prof. Risse’s use of Capitals? It is so easy, a cave person could do it…

    “Today, over half the working adults cannot afford to buy and maintain a fuel efficient Large Vehicle for private use that is safe to drive on the Interstate Highway system. The Volt (‘car of the year’) cost $41K to buy, operate and maintain the sophisticated systems that make it safe.”

    The above paragraph is a paraphrase from a draft perspective that Prof. Risse recently circulated. It examines what comes after the car that can provide Access and Mobility for humans.

    In the meantime, about GM:

    Why would anyone ‘invest’ in GM?

    The prospect of sales in China? Investing in GM on the basis of potential car sales in China is about as smart as investing in a cookie factory on Mt. Merapi. A lot of ‘free’ heat on Mt. Merapi but it will blow up without notice – and sooner, rather than later.

    The more likely rationale is that the stock market is a gambling venue and if you want to “invest” do it in something that is “too big to fail” as Groveton suggests.

    Sorry, nothing is bigger than the inability to meet ones obligations.

    And on the topic of subsidy:

    Every business owner has been flooded with sales brochures highlighting the “tax savings” from accelerated depreciation up $500,000 for the total cost of new trucks purchased before the end of the year. Lawn contractors are pulling around their trailers with some ‘mighty big’ new pick ups.

    When considering the past and future role of short haul aircraft (less than 500 miles) and the subsidized infrastructure to support them, a friend asked the question:

    Why would ANYONE ‘invest’ in Airlines since 1973 and especially since 2001?

    The same could be asked about cars:

    Subsidies and Too Big To Fail.

    Socialized Risk, Privatized Profit.

    Observer

  34. Larry G Avatar
    Larry G

    well.. here's the question about cars….and the future.

    Can you picture a car than run primarily as an electric (with a small gasoline powered generator as backup) that costs 10K?

    It's true the Volt is 41K. But it's also true the Nissan Leaf is half or less and the Indian car maker Ta Ta, which makes sub 10K cars has said it can deliver a hybrid for 10K

    GM's future may be at issue but the personal mobility vehicle

  35. Larry G Avatar
    Larry G

    … the personal mobility vehicle – has a bright, bright future in my view and auto-routing dollar vans – not autonomous but each new passenger's destination is auto-sorted by GPS to generate the optimal route – ad-hoc, continuous…..

    these vans would also be networked so that get dispatched by your cell phone.

    You just key in your destination.. send the call.. get a ETA estimate then confirm.

    My premise is that people and commerce want to move – to be mobile.

    and the main rub in satisfying that is the use of finite resources and pollution.

    If mobility were to be more sustainable and less polluting ..why would that still spell the doom of mankind?

  36. Anonymous Avatar
    Anonymous

    Mr. Gross:

    You are describing some of the many attributes of small, shared vehicles.

    You are right, there will be vehicles for Acess and Mobility, just not Large, Private ones.

    Just what Dr. Risse says in the draft Perspective I recently reviewed.

    ACSGP

  37. Anonymous Avatar
    Anonymous

    "Can you picture a car than run primarily as an electric (with a small gasoline powered generator as backup) that costs 10K?"

    Yes, but it would not be safe to drive on the Interstate.

    It would serve the same purpose that a golf cart does in the Planned New Community of Peachtree City, GA which, as I understand it, Prof. Risse helped design 40 years ago.

    CJC

  38. Hydra Avatar
    Hydra

    "Can you picture a car than run primarily as an electric (with a small gasoline powered generator as backup) that costs 10K?"

    ===============================

    Not really. Energy is energy. Batteries provide storage of energy, but they provide no energy.
    It is possible to use a relatively small engine and run it at its most efficient constant rpm, and get enough AVERAGE power to run the vehicle. Then you use the batteries to store pwer when the engine is making more than you need and provide surge power when needed.

    This only works if the cost of batteries is low relative to the cost of fuel. Even with a smaller engine running in its most efficient mode, you still need to supply nearly the same amount of fuel to move the car. There is some savings from not having an engine big enough to accelerate the car, and more savings from regenerative braking, but the basic energy requirement is exactly the same, batteries or no.

    You can, of course, start out in the morning with full batteries, charged up with coal based energy which is cheaper than gas, and plan on arriving back home on near empty batteries, but this is hard on the batteries, and hard to manage in a practical way.

    It is not helpful to raise false expectations based on promises of technlogy that violates physics.

  39. Hydra Avatar
    Hydra

    "Fire guts 28-storey building

    * Police blame illegal welding for blaze

    * Risk of simiilar fires is rising — …"

    Reuters

    53 persons dead.

  40. Hydra Avatar
    Hydra

    "…just not Large, Private ones. "

    Well, someone is going to have to own and be responsible for those vehicles.

    When I get in my own car, I know the brakes have been examined and the tires are safe.

    I beleive EMR is partially correct concerning the socialization of autos. I think what will happen first is that car navigation will be networked, which each car communicating with its nearest neighbors to prevent accidents, and maximize traffic flow.

    Some of this technology is being installed today in the form of anti rear end collision control for heavy trucks.

    The ownership of autmobiles will not be socialized for decades, if ever.

  41. Larry G Avatar
    Larry G

    I agree… at the end of the day…how much weight you are pushing – for a given speed or acceleration is the germane factor.

    However, you missed the part about "small". "Small" is how the rest of the world uses 1/2 the fuel we do on a per capita per car basis.

    We have a love affair with large vehicles and 90% of the fuel we burn is not to move people but to move metal.

    We pay $3-4 a gallon to essentially move a hunk of metal from a driveway to a parking lot – and back again.

    Of all the schemes for taxing to pay for roads – the one most overlooked – is weight.

    Allow those who are using vehicles in business to write off the weight tax.

    but everyone else.. if you want to own an SUV – fine – pay for it.

    If you can save money by driving an econobox back & forth between work/home.. then great.

    If you want to move 2 tons of metal because you like the "feel" of it – then fine.. just pay for it.

    got a bunch of kids?? well.. you know.. the more kids you have the more it costs to feed and cloth and MOVE them. eh?

  42. Hydra Avatar
    Hydra

    and auto-routing dollar vans – not autonomous but each new passenger's destination is auto-sorted by GPS to generate the optimal route – ad-hoc, continuous…..

    these vans would also be networked so that get dispatched by your cell phone.

    =================================

    This is the jitney idea I promoted years ago and which Larry laughed at. All we have to do is get the taxi industry out of the way and make Jitneys legal.

  43. Larry G Avatar
    Larry G

    if I did laugh at your idea – and it's possible I did… so I profusely apologize now that it's also my idea….

    🙂

    also … phone apps already will show you the nearest location o a Zip car … and you can then reserve it – all on your phone.

    the point here… is that personal mobility is going to remain a fundamentally what people want – and that we have have it..have more of it.. and use much less resources than we did before by optimizing it.

    The theory that autos will remain static in their use of resources and will lead us all to ….hell & damnation… is the stuff of the guys in white robes on soapboxes on street corners.

  44. Hydra Avatar
    Hydra

    " have not, will not and could not provide humans with Mobility and Access in an Urban society. "

    ==================================TThis is an outright lie. Taxis in New York carry more passengers than all of DC Metro. Automobiles are crucial to urban mobility.

    Now, we can argue about HOW URBAN. There is no point in deliberately designing an urban area to exclude cars if you have to replace them with a heroic and impossibley expensive alternate system that does not exist, yet.

    Better to design the urban areas in such a way to maximise the utility and minimize the cost of the system we have, which is private autos, rather than dismiss autos as unworkable.

    We have problems that need work, but misrepresenting the problem at hand by endlessly repeating such lies is not helpful to finding the best solution, as opposed to EMRs preferred solution.

  45. Hydra Avatar
    Hydra

    When considering the past and future role of short haul aircraft (less than 500 miles) and the subsidized infrastructure to support them, a friend asked the question:

    Why would ANYONE ‘invest’ in Airlines since 1973 and especially since 2001?

    =================================

    An awful lot of people have paid to get on airplanes since 1973. maybe you invest to capure a piece of that market.

    The load factor on commercial airlines runs around 80%, which is far higher than the Metro transit system. As a result, the airlines suffer from irrational competitiveness in an effort to capture those dollars.

    It is a high cost business, so if you screw up, you can lose a lot of money in a hurry.

    The short hauld business in particular has seen turmoil for three reasons:
    (1)the older 19 passenger twins were hideously inefficient, and only stayed in operation because government rules required two engines.
    (2)the new regional jets and resulting direct flights to smaller airports reconfigured flight patterns considerably, making short hauls to the hubs inefficient.
    (3)security delays make shorter fights less attractive.

    However, a new class of very small,and very efficient private jets may make long distance private air taxi competitive with commercial flights. This class of service would come very close to what EMR describes as a true shared vehicle system.

    I would not write off air travel on the basis of the recent hsitory of short haul travel. Even in this bad economy, new records for passenger and freight traffic are being set.

  46. Hydra Avatar
    Hydra

    ..have more of it.. and use much less resources than we did before by optimizing it.

    =================================

    Optimizing is the operative word. Nothing wrong with that. I'm going to reserve judgement on Zip cars until I see how they do without their current subsidies. They are doing better than I thought they might.

  47. Hydra Avatar
    Hydra

    re – subsidized infrastructure.

    =================================

    Isnt that the very nature of infrastrucure? Something we put up that anyone can share in the use of, and all benefit from even if they don't use it?

    Isn't non subsidized infrastructure a guarantee that it will never happen until after there is a market to support it, and therefore it will always be behind the power curve and always in shortage?

  48. Hydra Avatar
    Hydra

    "However, you missed the part about "small". "Small" is how the rest of the world uses 1/2 the fuel we do on a per capita per car basis."

    ==================================

    Small is also how he rest of the world makes their GDP compared to ours, too. They don;t move as much stuff or move as many people and as a result they make less money.

    I know you are not going to believe that, but compare recent traffic stats in the US with the recession, and see how closely they are linked.

    Otherwise, I agree with you about weight. I'm a amall car guy and always have been. i use giant vehicles when I have giant loads to haul.

    However, if the gas tax was set anywhere near where it needs to be to cover costs, heavy vehicles would already be paying a "heavy penalty"

  49. Hydra Avatar
    Hydra

    Accelerated depreciation applies to more than just trucks. however truck sales are way up, and this is a sign the economy is recovering: people expect to put those trucks to work.

    Not sure I understand the snide "tax savings" quotation marks. If you need a new truck and buy it this year rather than next, you will pay less tax. That is a tax saving, not a "tax saving".

    Unless, you are considering the larger system that says whatever wee need to spend for government work is going to be collected in taxes, eventually, and therefore the tax savings are chimeral, or temporary.

    It does not matter if my tax savings are temprorary, and I have to pay the tax someday: right now I'm still driving a brand new truck.

  50. Hydra Avatar
    Hydra

    Humans are going to decide what a sustainable trajectory is, not automobiles.

    I'm pretty certain that we will just eliminate enough people so that the ones remaining can own automobiles sustainably.

  51. Hydra Avatar
    Hydra

    "The International Monetary Fund is now predicting world real GDP growth this year of 4.6%, followed by 4.3% next year, and then 4.50% growth or above from 2012 to 2015. If so, the 2010-2015 period would be the strongest growth for the world economy during a six-year period in at least 30 years"

    ==================================

    This should give EMR sustainability nightmares.

  52. Larry G Avatar
    Larry G

    one of the biggest indicators in 3rd world countries that are developing is the ownership of automobiles.

    but virtually all of them are small by our standards.

    Most of these places have very dense historic urban areas that one would have thought had a sufficient time to develop into non-auto-centric settlement patterns but the truth is – across the entire world – that no matter how old an urban area is – that cars and the ownership of them is growing.

    Many of these places already have much, much more mass transit that we have… and yet… the demand for personal mobility is still very strong.

  53. Hydra Avatar
    Hydra

    That is because mass transit is hidewously expensive and
    It. Does. Not. Work.

    It fills a niche market, but it does not supply mobility and access that meets most needs.

  54. Larry G Avatar
    Larry G

    you mentioned taxi's and how many people they carried compared to other modes.

    How do Taxi's compare with these other modes?

    Do you think Taxi's could carry what transit now carries if transit was shut down?

  55. Hydra Avatar
    Hydra

    "The City of Austin sells valet parking companies the right to use a parking space for $250 per year. Is that the right price? I doubt it. The appropriate price would be the opportunity cost — which is at least the revenue raised if the slot were open to the public and metered. It may be much more than that. The only sensible way to determine the appropriate price would be by some kind of auction, including allowing private citizens to bid. Their bids, plus the competition among valet parking companies and the restaurants that contract with them would help the price reflect the value of the space more closely. As it is, the average driver/parker is probably subsidizing restaurant customers who use valet parking, the restaurants themselves and the valet parking companies. A classic problem — the same one that used to describe spectrum giveaways before we started auctioning frequencies."

    DANIEL HAMERMESH in Freakonomics.

    ==================================

    Another example of using the market to manage regulations to make them efficient and not overburdensome.

  56. Larry G Avatar
    Larry G

    the marketplace is a kind of an auction. A service station is holding a kind of an auction – especially the ones that can electronically change the price.

    and for that matter…so are HOT Lanes, eh?

  57. Hydra Avatar
    Hydra

    Observer made the claim that autos cannot provide mobility and access in an urban setting, and I responded with the fact that new York taxis carry more people than Washington's metro. Transit fills a niche market. It can no more do the job of autos than autos can do the job of transit. In order to optimize either one you would have to rebuild the living environment to suit their respective strengths.

    However we can easily visualize and have built many places that rely only on auto traffic. There is no place that relies only on transit. Furthermore, if you tried to build one it would be hideously expensive, and not a natural environment to live in. Neither is it a green solution by virtue of conserving open space, because that virtue is overwhelmed by the massive consumption of resources required to build and operate it, and to transport and detoxify its concentrated waste.

    EMRs vision is a fantasy.

  58. Hydra Avatar
    Hydra

    No, hot lanes not count, because there is no free market. No new capacity can spring up to compete. Government causes the problem through bad development/ transportation planning and then tries to profit from the problem it caused, and cutting in private enterprise in the process. How giving away public assets enhances the respectability of this is beyond me.

    Charging people to go downtown means less people will go. You can have the same effect by building less stuff downttown to go to, and do it a lot cheaper and less wastefully.

  59. Larry G Avatar
    Larry G

    doesn't ANY kind of an auction imply that there is a finite supply of what is being auctioned?

    You said yourself that parking spots were limited and should be auctioned.

    Now you're saying that if it's possible to build more parking that it's not a valid commodity for auction?

    Gasoline and fish are pork bellies get auctioned even though there are more of them coming available an even though both of them are finite in their supplies.

  60. Hydra Avatar
    Hydra

    You notice that when VRE broke down this morning, the called in the taxis.

  61. Hydra Avatar
    Hydra

    Nope. There is a limited amount of tables for sale at any one auction. but if the auction prices show a strong demand for tables, then a lot more tables will show up at the next auction.

    in the parking space example, local merchants pay a fee to reserve parking spaces which are used by their parking valets. the argument made is that the merchants probably are not paying enough. But, if an auction is introduced and the prices for reserved public spaces go too high, more parking spaces could be made avaialble. Not easy, but not impossible either.

    No one is going to step up and provide another new HOT lane. Mind you, I'm not opposed to the idea of HOT lanes: I'm opposed to the lies that go along with getting them sold.

    They are NOT going to reduce congestion, or travel. If too many carpools use the lanes for free, that privilege will be terminated. HOT lanes are an incentive to build someplace else, call it sprawl if you like. HOT lane payments are NOT user fees, they are taxes, because they are already being viewed as revenue streams which can be diverted, to roads in other locations and transit. HOT lanes are sending th ebill to the wrong persons. The beneficiaries of HOT lanes are businesses that are served by them, not the people driving on them. HOT lanes are a public facility; there had better be a strong argument as to why private enterprise, gets a no-risk sweeheart deal, with a guaranteed buy-out. HOT lanes do not address the root cause problem, and the money derived from them will be used to develop even more heroic transport boondoggles.

    Somebody wants to start telling the truth about HOT lanes, they want to rebate the taxes against other charges, and be realistic about the end result, then I'm a lot less opposed, but right now the sales pitch in favor of HOT lanes is a massive obfusco-prevarication.

  62. Hydra Avatar
    Hydra

    Now you're saying that if it's possible to build more parking that it's not a valid commodity for auction?

    ==============================

    No, im saying that a necessary criteria for a free market is the possibilty for new competition. The municipality cannot raise the price of reserved parking beyond the price at which merchants could afford to pool their resources and build their own garage(s). These new garages would compete with public spots and drive down the price.

    This would not be an easy thing to do, nor inexpensive, but it is at least theroetically possible.

    =================================

    But we are getting away from the point. The point is not to auction off the parking spaces. The point is to use the auction process to put a price on the government regulation. At the right auction price, the cost of the regulation and the benefit of the regulation will be equal. As it stands now, there is no way of knowing the price.

    Suppose there are residents in the area. If merchants can buy ("rent") up public spaces and reserve them for their customers too cheaply, it becomes an inconveneince for the residents. They ought to be able to bid for reserved spaces on the same basis as the Merchants.

    The same holds true for my idea about density permits. Let the county decide how much building they can stand, considering the capital budget and required infrastrucure. Give every citizen a pro rata share, in density vouchers. Any builder who wants to disrupt the neighborhood with unwanted building and excess traffic has to first buy up enough density vouchers to cover his project.

    Now we know what the true price of density is, and how much people will give up to prevent it, or what they will accept to allow it. The regulation (which consists of planning how much building to allow) is now also self regulating. If officials are not getting enough in new tax base, they can plan for more building. This will result in more vouchers being issued, which will lower the price.

    Right now density objectors don't have to give up anything to prevent density, just show up at "public participation" and scream. The property right which consists of the right to say no, and thereby control other people (or their property) is not properly priced. Now, density objectors can partially control the outcome by withholding their vouchers for sale, thereby raising the price. for those that do sell, it is a taxable event.

    Now, what happens next year when the planning board sets the next tranche of building? The focus of density objectors now turns to that meeting and the elected representatives, instead of some hapless developer. And, given the price history of the previous year, there is actual data to work with instead of a bunch of unpriced "feelings".

  63. Larry G Avatar
    Larry G

    There are some things like antiques, and Redskin stadium seats, and additional lanes on I-95 that do not have "competition" in play but they still essentially auction off what they do have and it sets a "value" for each.

    A antique or a seat at Redskins park or a HOT Lane are all worth what the auction determines they are.

  64. Larry G Avatar
    Larry G

    people are not opposed to density nor to growth.

    They are opposed to the degradation of the level of service that happens when the growth and density wants to not pay their fair share of the mitigation to maintain the levels of service.

    When a development is proposed that INCREASES the level of service – they are welcomed.

  65. Hydra Avatar
    Hydra

    people are not opposed to density nor to growth.

    =================================

    Horse manure. I'll be happy to introduce you to some, who will tell you exactly that.

    PJ O'Rouke has a scathingly funny description of them (us) in his book "On the Wealth of Nations".

  66. Hydra Avatar
    Hydra

    when the growth and density wants to not pay their fair share

    ================================

    And how do we know what the fair share is withhout a market to decide?

    According to your lame description of the process, those that are there first get to decide. And as they increase in numbers, they even get to override those that were there still earlier, and therfore preserved porperty and prevented growth the longest.

    The ironic and wrong result is that you have a bunch of people living in townhomes telling a guy with 500 acres that he can't develope because HE AND HE ALONE IS CONTRBUTING TO CONGESTION and other costs.

    Nonsense.
    Nonsense.
    Nonsense.

    Let the market put a fair price on such things and eliminate assymetric "rights". In the end you will have the proper amount of development AND the money to support it.

  67. Hydra Avatar
    Hydra

    That is correct, and that is why scalping is illegal. Hot lanes should be illegal for the same reason.

  68. Hydra Avatar
    Hydra

    When a development is proposed that INCREASES the level of service – they are welcomed.

    ================================

    Horse manure again. I could offer to double the size of every road in my neighborhood, free. Without even any devlopment proposed.

    Every single one of my neighbors woule oppose the plan. Every single one. I could throw in free water and sewer, and they would still be opposed.

    They do not want change, of any kind. Especially if they can prevent it for free.

  69. Hydra Avatar
    Hydra

    A antique or a seat at Redskins park or a HOT Lane are all worth what the auction determines they are.

    ==================================

    You are missing the point again. It is not about the price of the object. What you want to auction off is the cost of the regulation. That is how you get the most inexpensive and the most cost effective government. And everyone has a say.

    Pre-columbian antiques would cost a lot less and have a lot more protection if they were not illegal to import. The difference in price is the cost of the regulation, almost.

    It is not quite the price, because those in favor of the regulation have no skin in the game.

  70. Larry G Avatar
    Larry G

    MOST people are not opposed to growth and development that does not degrade their community and level of service.

    The vast majority of those who oppose growth – oppose it because it is done on the cheap and does not IMPROVE roads but makes them worse.

  71. Larry G Avatar
    Larry G

    what you are essentially advocating is to make the existing residents PAY to NOT have their community and levels of service degraded…

    … as if it is a "right" of those who would make a profit while degrading the levels of service and that if you don't want them to do it – you've got to outbid them.

    Sorry.

    Not even VDOT buys that argument.

    If someone proposes a development, VDOT is the one that forces them to build the additional infrastructure not the existing residents.

  72. Hydra Avatar
    Hydra

    what you are essentially advocating is to make the existing residents PAY to NOT have their community and levels of service degraded…

    ==================================

    You are deliberately ignoring the base argument.

    There is no way of knowing who is paying what for what when there is no market and assymetric power involved.

    I cannot believe your argument that residents are paying NOT to have their services downgraded, because there are no PRICES invlolved. Your claim is hollow.

    I can show you places where every single resident is living on part of what was once a major farm or other porperty. They had NO PROBLEM with subdivision BEFORE they got their lot. But now, it is a different story " I got mine, screw you. And everyone behind you, forever."

    Their lot did not come with a guarantee that thee would be no more subdivision, and if it had, it would have cost a lot more.

    If that is the case, then they SHOULD be paying more, not to have their services degraded. Otherwise they are getting something for free, now that they would have paid a lot more for many years ago.

    That is why you need much stronger property rights: to define what it is you own and when you paid for it. that is why you need more government, not less, to protect those rights. And that is why you need markets, to figure out what those rights are worth, today.

  73. Hydra Avatar
    Hydra

    as if it is a "right" of those who would make a profit by making thier property more valuable at the expense of degrading the neighbors value, by claiming control over open space as if they had paid for it.

    Your arrgument cuts both ways, that is hy the market has to decide the answer, and not ONLY those that have already reaped the benefits of development.

  74. Larry G Avatar
    Larry G

    If a developer is not made to mitigate the infrastructure impacts – it leaves existing residents two choices.

    Either suffer the degradation of their levels of service or pay to keep them from being degraded.

    The cost to maintain the LOS can be figured out fairly routinely.

    The question is who has the financial responsibility to pay for it?

    why should existing residents bid in an auction to see who is willing to pay how much?

    You're starting off presuming that the existing residents owe the developer something and they do not.

  75. Larry G Avatar
    Larry G

    Does the law require developers to maintain levels of service?

    Yep.

    It says that impact fees and proffers, in fact, must be tied to mitigation of the current LOS – and nothing more.

    If the LOS is already degraded, the developer is only required to pay to maintain that level, not improve it.

    If the LOS is to be improved, it becomes the responsibility of the existing residents – often via local referenda for high taxes to pay for it.

    That's fair and equitable.

    Under your idea, by the way, local govt could, in theory, auction off water/sewer connections instead of being restricted by law to charge only what it costs to provide them – no profit.

  76. Hydra Avatar
    Hydra

    Off the county auctioned off connnections they would have to provide them, and if they came at a profit existing residents would have no reason to complain.

    They would complain anyway.

  77. Hydra Avatar
    Hydra

    Existing residents contribute as much to congestion as new residents. It is a logical fallacy to blame lower Los on only the new residents. Existing residents equally contribute to the problem. Only difference is that they have been doing it longer.

    Congestion is not a linear function. This has the result that one more car causes a tipping point that has been building for years. Existing residents should be required to pay more. Instead they get payed in increased property values by limiting growth and extorting new services when growth is allowed.

    What my plan does is use real market forces to equalize the competing claims.

    You are avoiding my actual argument which is that claims on both sides are undocumented, but we can easily fix that AND achieve a fair result. We don't do it because the existing system favors recent homeowners above either new homeowners and original or long term owners.

  78. Larry G Avatar
    Larry G

    VDOT measures congestion, vehicles per hour, and LOS for existing residents.

    existing residents already pay and have paid to maintain LOS.

    When new development is proposed – VDOT requires them to do a traffic analysis that will show how many new trips per day are generated and how that affects the LOS near them.

    VDOT only requires them to mitigate the LOS at their entrance and not their share of of the cumulate impacts in the region.

    Those costs are born by everyone – existing and new residents either as degraded LOS or incrased taxes to pay for improvements.

    There are "no" competing claims.

    VDOT does not "claim" that you need to do a traffic analysis – they REQUIRE you to do one and based on that analysis – they may REQUIRE you to mitigate – not "claim" that you "should".

    there is no "claim" involved.

    If you add traffic – you will need to mitigate it.

    Them's the rules.

  79. Hydra Avatar
    Hydra

    Ten homes are in a community. They then pass a rule that increases the cost for any new resident to build. Their property is now suddenly worth more and the unbuilt property is worth less.
    They never paid for their services because the money is borrowed.

    If they did pay, how? And why wouldn't a new house also pay the same way, under the same rules?

    There are competing claims and what is going on now is that developed owners are stealing from undeveloped ones.

    It is the same as an HOA assessing an initiation or membership fee that only applies to new owners. The existing residents get something for nothing, and they enjoy all the same services at a new higher cost, without contributing more.

    In the outside community existing residents get new customers for their businesses to compensate for Los.

    Your argument is both wrong and incomplete.

  80. Larry G Avatar
    Larry G

    using your analogy – the homeowners in a gated community refuse to let the unsold lots to be developed for apartments or duplexes.

    Are you saying this is wrong?

  81. Hydra Avatar
    Hydra

    Yep, thems the rules. The rules are based on the assumption of costs claimed by one side only.

    If a market based rule was in effect, we would soon see how valid those claims are.

    Since we do not have that, there is no way to independently verify the costs claimed, and the odds are high that they are wrong.

    Therfore the rule is assymetric (not supportable in a democratic society), wrong, and needs to be modified.

    Mind you, I'm not saying that new residents shouldn't pay something, I'm only saying that a) the logic that says they should pay is faulty, and b) the true costs are unknown and un-negotiated.

    And, besides the logical and financial fallacies, I have been through similar development scenarios in three different locations. In each instance it was obvious, and Ihad personal knowledge of instances in which old line landowners got worked over by new residents who moved in and then wanted to protect themselves from further development.

    You can make all the arguments you want about costs and LOS, but in fact, that is not what is going on. That is a red herring argument, and many times, no amount of payment by a developer will be sufficient. That is exactly the sentiment and the driving force behind permanent conservation easements. "Lets protect ourselves forever, and put those bastard developers out of the picture, permanently."

    If you don't believe it, just look at the conservation easement map of Fauquier county. but it is the same sentiment, and the same argument at every scale down to the HOA.

    The sentiment is understandable, the argument is almost certainly wrong, and the ethics of a)misrepresenting the facts, b)refusing to even consider investigating the facts, and c) robbing your neighbors blind are reprehensible.

    And besides that, we now know that those areas which artificially jacked up home prices this way, were also the areas hit hardeest by the price collapse.

  82. Hydra Avatar
    Hydra

    using your analogy – the homeowners in a gated community refuse to let the unsold lots to be developed for apartments or duplexes.

    Are you saying this is wrong?

    ==================================

    That is not what I said, and you are deliberately mis-stating.

    There are HOAs today, where you can buy an existing home and move in, yet you will be required to pay a newly instated inititation fee to "join" the homeowners association, in addition to the maintenance fees that everyone pays.

    That initiation fee applies only to newcomers, and it amounts to existing owners getting something for nothing.

    EVEN IF the new owner built a new home on a vacant lot in the HOA, his appearance would make no difference to the maintance cost and amenities provided, yet he would pay more than his establishe neighbors, only because they got to vote against him, before he existed.

    Suppose the HOA has a pool that accomodates 50 people. This new guy has two kids and that pushes the pool over the capacity limit. Under your premise, he would be solely resposnsibe for upgrading the pool to accomodate "two more"
    kids. And yet those two are not contributing to the overcapacity any more than the other 50.

    To claim that they are solely responsible for the reduction in pool LOS is simply incredible.

  83. Hydra Avatar
    Hydra

    The HOA example I gave is not hypothetical. That actually happens: charge the new guys more.

  84. Larry G Avatar
    Larry G

    Can you name any place in the USA or the world where what you say is the right way – is the way they do it?

  85. Hydra Avatar
    Hydra

    Ten homes are in a community. They then pass a rule that increases the cost for any new resident to build. Their property is now suddenly worth more and the unbuilt property is worth less.
    They never paid for their services because the money is borrowed.

    If they did pay, how? And why wouldn't a new house also pay the same way, under the same rules?

    There are competing claims and what is going on now is that developed owners are stealing from undeveloped ones.

    It is the same as an HOA assessing an initiation or membership fee that only applies to new owners. The existing residents get something for nothing, and they enjoy all the same services at a new higher cost, without contributing more.

    In the outside community existing residents get new customers for their businesses to compensate for Los.

    Your argument is both wrong and incomplete.

  86. Hydra Avatar
    Hydra

    Does any place do that?

    Sure, the US has had successful bidding programs for em spectrum and sulfur emissions and fish quotas, so the idea isn't new or weird.

    As far as building goes, Texas has pretty much taken the opposite tack as here. If someone wants to build they pretty much have the same right as those who have already built have exercised. When I described your argument in AZ., jaws dropped open.

    "How do they get away with that?"

    And you can buy a nice home in Phoenix, for cheap.

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