Friday, May 1, 2009

Lot 'o bullshit going down...

Greetings good citizen,

If you live in a cave you may not be aware that the US government made good on it’s threat to force Chrysler into bankruptcy at noon today.

This has sparked all manners of outrage from many quarters depending on which axe you have to grind.

Win, lose or draw, Chryslers’ workers begin an immediate 60 day furlough…(which they may or may not return to work from…although there was some mumbling that they would still be paid…only ‘they’ weren’t specified nor was the level of pay. So at least some Chrysler employees will see some compensation even if it is only unemployment insurance. (Which is only a fraction of anyone’s ‘regular pay’.)

I didn’t read about it in the MSM but I heard on the BBC tonight a rather frank discussion of what this means to Chrysler’s suppliers. Later next month GM will shut down all of its US production lines for a similar period.

The question here is whether a majority of these suppliers have deep enough pockets to survive 90 days with zero orders? They will most certainly ‘furlough’ their workers as well (although nobody is saying whether or not these people will be ‘paid’, unemployment aside.)

This is what starts a ‘cascading systemic failure’. “I didn’t get paid so I can’t pay you, thus you can’t pay your bills and the people expecting a check from you can’t pay who they owe…” ad infinitum…ad nauseum.

Then there is the inevitable downsizing (not all of today’s workers will be ‘recalled’ if demand remains weak.)

So the probability is getting stronger that yesterday’s ‘green shoots’ will become tomorrow’s ‘scorched earth’.

Ironically Yves Smith of naked capitalism fame has posted an excellent article on the topic of the negative effects being overly optimistic.

To which I would add the effects of being ignorant can be equally as disastrous.

It is vitally important for you to understand that when our economy stops dropping, it will have shrunk to where it can be drown in a shallow bath tub so it won’t be anything to be even remotely ‘happy’ about.

There are no plans on the horizon to restore any of the jobs that have been lost over the past year, nor are there plans to restore the jobs that will be lost this year.

By the time this nonsense is over, the ‘not in the labor force’ figures will dwarf the number counted as employed.

The ‘apologists’ are going to come off as real lame trying to defend this outcome but defend it they will.

Um, I was going to parse this piece tonight [Hat tip: The Automatic Earth] but it pasted in at 14 pages without any commentary of my part…so there’s the link if you’re so inclined.

I’m not one to follow ‘polls’ but it seems the current president is still polling well, despite the fact that many noted progressives are ‘less than enchanted’ with Mr. O.

Not only does Naomi take a few shots at ‘Dear Leader’, but Ilargi lands a couple of punches too!

Mr. O. has ten weeks left with which to avert disaster…and from where we are right now, it’s not looking good.

Thanks for letting me inside your head,


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