Americans have feared coming inflation for some time now. We’ve heard all the warnings from economists and pundits. After all, we can’t possibly sustain the current debt load. Instead of exercising fiscal prudence, the federal government acts more like a rich debutante on Rodeo Drive armed with her Daddy’s credit card.

But what happens when the credit limit is maxed out? We can then expect the Fed to print money. And printing money creates inflation.

Should we hedge inflation by reallocating investments and retirement savings? Or should we just stock up on toilet paper and other non-perishables before they become luxury items?

Before you empty the Walmart shelves, you might want to consider another scenario. The Wall Street Journal reports in two separate articles this month (August 7, 2010, “How to Beat Deflation” and Aug. 18, 2010, “What Deflation Means for Your Money”) that deflation may be on the horizon. This scenario also makes sense.

Jobless claims hover around 10%. The stock market reacts in a downward spiral, companies spend and invest less, and workers see wages cut. Less spending equals less money in circulation so prices stagnate. Companies lose profits, cut jobs, benefits, and wages. The cycle continues and we have deflation.

Faced with two opposite scenarios, how can we possibly know what to do? Taking any one approach to the extreme would probably be a mistake. We don’t know what will happen. It might not be a bad idea to talk to a financial advisor about reallocating some stocks into more secure markets, or even into proven stocks that produce more necessities than luxury items. But even this is no guarantee. The stock market is always a gamble.

Even in an economy that may be spinning out of control there may be one thing you can do now: Pay down your debt as quickly as possible.

In his article “What Deflation Means for Your Money”, (Wall Street Journal, Aug. 18, 2010) Brett Arends gives a great explanation of deflation and the best way to gain some protection now. While he gives advice regarding bonds and stock purchases, I believe his best recommendation is to pay down your debt now. He points out that increasing income is crucial during deflation.

But how do you increase income when the money just isn’t there? Decrease spending. This puts more money in your pocket, increasing available income. Let’s say you pay $200 a month for a student loan. If you can pay that off now, you’ve added $200 to your pocket, or just given yourself a $200 a month raise.

But what if inflation hits? I still believe paying down debt is a win-win situation – just make sure you are also putting money aside for emergencies. Inflation would likely spike interest rates. You could wind up paying 20% interest on credit card expenses, making it even tougher to make ends meet in a bad economy. Suddenly the outdated Nintendo that you intended to pay for over three months doesn’t seem so appealing.

Whether inflation or deflation occurs, decreasing debt seems to be the wisest move. Cut back on discretionary spending and put it towards any debt payment or savings. For some families, this may seem impossible. In that case, do what you can. Even the smallest step, is a step in the right direction, allowing you to take some control in an uncertain world.

The economy could go into a double-dip recession, we could lose our jobs, or our wages could be cut. But as a whole, Americans are resilient. As parents, we cannot give up hope. But I’m not fatalistic enough to rely on hope. We must carve out our own destiny and that requires action. So do what you can to protect yourself. Decreasing debt load and increasing savings to the best of our abilities, are sensible and responsible actions.

“Teachers’ pay, benefits take hit” (Wisconsin State Journal, Matthew DeFour)
The Wisconsin State Journal, which ran this story on August 9, leads with the following statement: “Statewide increases in teacher compensation contracts are on track to be the lowest in more than a decade following last year’s changes in state school district financing.”

I read it quickly, and not very closely, while drinking my morning coffee and eating breakfast. I’m not a morning person, so I probably read it while still waking up. My first thought was, “What a shame, teachers are also getting a paycut – and cut to the lowest wages in ten years.”

Who among us wants to see that happen? After all, we love our teachers.

But then I took a few more sips of coffee, got up, took the dog out, waking up bit by bit. More alert, I came back inside finished my coffee and read the next paragraph. The next paragraph changed everything.

Teachers aren’t getting their pay cut. No, they are getting raises! Ok, good for them. Most of them probably deserve it. Heck, most of us probably deserve it. I also think I deserve a new car with less than 100,000 miles on it, one where the check engine light isn’t on all the time even though the last two mechanics say nothing is wrong.

But what we want, and yes, sometimes what we deserve, doesn’t always work out. It’s part of reality, and part of being an adult. I try to teach my children this. At times, I’m still learning this. After all, why not replace my car since I feel I deserve it? Why not give these teachers raises which I’m certain most of them deserve?

The increase in compensation packages come with a cost, a cost to you and me.

President Obama just signed an aid package doling out 10 billion dollars to states for teachers. In other words, he and congress appeased the demands made by powerful teachers’ unions by reaching further into empty pockets and giving teachers another annual raise. Do congress and the president need to be reminded of the mounting debt crisis: 13 trillion in debt and a 1.5 trillion federal deficit?

Then there is the all too familiar state and local money paid out to teachers. Guess how that will get funded. Either the states go more into the red or they reach their hands out to to the rest of us. In other words, as taxpayers, we get double-whammied with this financial burden.

So while Wisconsin teachers are whining about a modest 3.75% compensation increase (salary and benefits), I’m wondering how many of you, how many tax payers, received a raise this year? How many of you have had your benefits cut? How many of you had hours cut? And how many are still employed?

From my vantage point, that 3.75% raise looks pretty good during these times. It looks down right generous considering its funded by people who haven’t seen a raise in the past few years.

But 3.75% isn’t good enough for teachers. It was less than last year. Less than the year before, probably less than the year before that. Sounds bad when it’s stated like that, doesn’t it?

How about if I take out the spin and give a more accurate presentation of their compensation packages. Here is my version of their compensation: “As part of their regular annual raise, Wisconsin teachers will receive a 3.75% increase in salary. Wisconsin teachers have received an average of 4.13% since 1993 according to the State Journal article. Due to a down-turned economy, the pay increase is the lower than it has been in the past 10 years.”

If I were a teacher I wouldn’t complain to someone living in Janesville or Milwaukee about a pay increase — a pay increase that is likely funded by someone who is out of work.

Wisconsin, like most states is hurting badly. Our state is in the red. Either we cut spending across the board or we come up with a way to finance what we spend. The next line of attack is to increase local taxes. How much more can you tax people? At some point, the government is going to run out of people to tax as more people lose jobs or just watch their income dwindle and their houses foreclose.

Planning Saves Money

A little planning can make even the simplest family outings more affordable, as well as more enjoyable. Unfortunately, I didn’t have the foresight to heed my own advice when we attended the county fair last weekend, a lesson I won’t repeat next year.

In less than three hours, our family of four went through $50 eating meager sandwiches, sharing drinks, and paying for a total of four rides. I grew more exasperated when I learned that we could have eaten better and enjoyed more rides for the same amount of money if I would have planned ahead.

Fortunately, my low threshold for unnecessarily overspending has turned this into a good learning experience. Below is a list of little epiphanies (as well as common sense) that I discovered. Maybe others can benefit from my mistakes.

Tips for Saving Money at the County Fair

1. Look in the paper AND online for admission costs, discounts, or free days. County or fair ground officials are likely to have a website with information. We missed out on the free admission day for kids.
2. If admission prices aren’t listed, call the fair office. A number should be available through the county. The website for our fair didn’t list admission costs.
3. Get a fair schedule with events and prices listed. Events may be discounted at certain times of the day. Often the best prices are earlier in the day. If the fair schedule isn’t available through the paper or online, contact the fair office.
4. If the fair does not list discounts or deals, call the fair office and ask about any specials available. Also check with local organizations that have food booths. For example, the Knights of Columbus might sell two for one ice cream on a particular day. This is a good way to support an organization while saving money.
5. Look for free or discounted ride days. Rides eat up a lot of the budget, especially if you have more than one child. After paying $3 a ride, I learned about the “10 rides for $10” special that ran earlier that week.
6. Avoid the big vender concessions if you want to hold on to your cash. We wanted to give money locally as much as possible so we did this, but we also found it was much cheaper to do so.
7. Search all the food tents, or as many as possible, before choosing a vendor. Check out some of the buildings or tents off to the side that may sell concessions. This was a big mistake for us. The 4-H groups sold food for a fraction of the costs of any of the other concessions. We stumbled upon this after we had already eaten. Later, however, we came back and got ice cream cones for $1.25 each.
8. Find out parking costs and alternative parking arrangements ahead of time. This was not an issue for us since parking was free. Busy, high-traffic areas, however, are likely to charge for parking. Don’t underestimate the cost of this.
9. If no free/discounted ride day is available, plan for expensive rides, and prepare your children accordingly. It’s just a fact of life: Thirty second rides cost more than they are worth. Let kids know ahead of time there is a limit to the number of rides they can go on.
10. Choose rides or activities that are more interactive. Not only do these tend to last longer, my children seemed to get more out of these activities than the passive whirly-rides that spin them around in circles for ninety seconds. My kids enjoyed the maze of mirrors better than any of the rides, and it lasted three times as long.
11. Bring a backpack with bottled water. It’s likely to get hot and everyone needs to stay hydrated. You can still patronize local clubs and businesses for the typical fair treats like lemon shake-ups. But there is no reason to spend $3 for a bottle of water. (I’d also recommend bringing wipes/hand sanitizer. Fairs aren’t the cleanest place. It’s also helpful after petting the animals.)
12. Spend time petting the animals and looking at the exhibits. This shouldn’t cost anything. Often a 4-H or FFA group will have an interactive exhibit about farm life that even very young kids can participate in. My kids loved petting the goats and sheep. Also, many of the 4-H exhibits have really come a long way. There really is something for everyone. My son loved the lego and rocket displays. My daughter was fascinated by all the different art projects.

County fairs can be a great experience for the whole family. Not only is it fun, it’s a great place to learn about animals and farm life. It might even open new doors for your kids. The 4-H clubs hold many opportunities for children to learn and gain leadership skills.

Unemployment, pay cuts, and pay freezes have hit families hard. Income has dwindled while costs have increased.

Now time for some more bad news: Net incomes will drop again if the Bush tax cuts are allowed to expire.

Who will pay?
News surrounding these tax cuts has always focused on the highest earners ($250,000 and above.). In fact, repealing the Bush tax cuts impacts all families with children.

We are facing “the largest tax hikes in the history of America” according to the group, Americans for Tax Reform, The child tax credit would be reduced from $1000 to $500 per child. Middle income earners will pay a 3% increase in taxes. Families’ earning as little as $17,000 per year, would jump from a 10% to 15% tax bracket.

Grandparents also will feel the pinch. Retirees depending on investment income can expect a large drop in their net income. Capital gains taxes increase from 15% to 20%. Dividend taxes will more than double, jumping from 15% to 39.6%.

These aren’t tiny ripples that will go unnoticed. Instead we can expect a series of tidal waves that will wreak havoc on personal income and the overall standard of living.

Find out more
Complete news coverage has been sparse in this area. I’ve heard various sound bites offering vague promises that were short on facts. I’m still waiting to hear coverage of specific, written proposals instead of campaign rhetoric.

Forbes, however, has recently put out a good article summarizing the major parts of the tax cuts as they stand.

For first hand knowledge, The Joint Committee on Taxation, a congressional body involved with tax legislation, has pdf files with updated information. I used this site to verify and research the facts. It’s not the most exciting summer read but it takes you right to the source of some of the most current and likely proposals that will make it to the floor. (Of course, this does not include proposals from members of congress not on the committee.)

A variety of proposals is likely to come to the table, including suggestions from the White House. The Wall Street Journal discusses positions taken by Speaker Pelosi and Treasury Secretary Geithner. Many lawmakers and White House officials are taking a partial position that would eliminate tax cuts for higher earners. How this will actually play out remains to be seen.

Can anything be done?
We could speculate over which party will vote to extend the tax cuts, which tax cuts will be extended – if any, and whether or not President Obama will support the extension. But it amounts to nothing but mere speculation.

Before a decision is made, doors will shut, deals will be made. With the impending November elections, our best bet is to urge our senators and representatives to extend the Bush tax cuts.

Then, pray that they listen.

This weekend, according to the WSJ , GM is blitzing lawmakers on the enormous impact of their possible bankruptcy.  GM claims that if it goes belly-up the impact will reach far beyond GM’s doors.  To it’s suppliers, to the dealerships, to the hot dog vendors who setup shop outside it’s door, and (here’s the big one) to the federal government who will be forced to back GM’s pension plan of former workers.

The WSJ quotes a top GM advisor as saying, “There is no Plan B being discussed beyond a government bailout.”

This is considered a great American company that should be saved?  What could be more un-American than choosing to beg for a handout without any attempt to work it out for yourself?  People are much more likely to give money to a  homeless person who offers to clean their car windows or plays music than they are to a guy holding a can asking for money  There is a reason that guy standing on the street corner has a sign that says, “Will WORK for food.” 

Why should GM be any different?  Why should GM’s survival be entirely dependent on you, me, and us giving them money without any effort to do something themselves, even in part?   It’s not like this is the first time the automakers have failed, nor is it the first time they’ve run to the government for protection.

As if that isn’t aggravating enough, GM has the audacity to turn corporate begging into a government hold up.  They claim that without a government rescue, not only are they going down, others are going down with them.   GM is wagering that  it will have hit the jacktpot if it can shift  responsibility off of them and onto the government for not saving all of GM’s unintended vicitmes.  The golden key to shift blame!

It’s not our fault the big three have continually caved to the unions and drove themselves head-on into a labor cost that is two-thirds higher than competitors.  If you’ve ever been involved with the production of a product you know the cost variable with which the producer has the most control over is labor cost.  In almost all cases if you work more efficient, you can make the product cheaper.  It’s also not our fault they aren’t making many cars people want, and that they are making too many models.  Did you realize that between GM’s Chevrolet and Pontiac brands there 15 different models, not counting trucks, vans, and SUVs?  Don’t forget they own all the Buick, Saturn and Cadillac models too!  It’s not our fault they failed to recognize sooner there wouldn’t be gasoline forever, and have now leveraged their entire future on the hopes of a single car (Chevy Volt). 

To quote Forrest Gump, and this applies to both the big three automakers and the government who continues to rescue them, “Stupid is as stupid does.”

As I began writing this post, my brain kept buzzing with that song He’s got the Whole World in his Hands.  A more apt title for the Obama campaign would be He’d Better Balance the Whole World in his Hands, particularly if he plans to pull off his election promises.

It’s easy to get caught up in the Obama-Biden message–or at least get caught by their message.  Let’s face  it, Senator Obama mesmerizes people.  Just look at the crowds, nodding and chanting in hypnotic agreement.  Furthermore,  Senator Obama has promised some pretty attractive things, such as providing universal health care coverage.

But I don’t think he can deliver on these promises.  Nothing personal–I don’t think anyone can.  How can the government exercise fiscal restraint while continuing to spend?  Senator Obama claims this can be done.  Here are just a few of his spending proposals:

1. Provide national health care coverage.
2. Invest in technology for alternative energy sources.
3. Provide new jobs in the energy sector.
4. Offer every American youth an opportunity to attend college upon completing community service.
5. Give temporary assistance to families for high gasoline prices.
6. Invest in rural schools and businesses.

This would all be done while lowering taxes for the middle class and providing a relief check  for those not currently paying taxes.

I have to admit, with the exception of the relief check, all of this makes me want to climb aboard the Obama-train.  Senator Obama says he can pay for all his programs (i.e. spend more,) while decreasing the deficit.  The Wall Street Journal discusses these two contradictions.

Sen. Obama has been able to win support by convincing voters he could simultaneously be a populist and a fiscal disciplinarian, that he could invest in education, energy and health care and adhere to rules that say additional spending must be more than offset by cuts or tax increases. He attacks greed and excess in Wall Street, yet reaches out to assure financial leaders he understands markets’ needs.

But if Sen. Obama wins on Tuesday and Democrats expand their congressional majority, the party in power will quickly have to reconcile these seeming contradictions into a legislative strategy.

Is there something we don’t know? I doubt it.  If he can pull this off, he is pulling a rabbit out of a hat, and I’m looking for a president grounded in reality not a magician who toys with illusions.  And the reality is that we need to cut spending if we are to reduce our national debt, which currently hovers around 10.5 trillion dollars. 

How can we possibly pay for national health care coverage,  education,  technological advances,  and even a possible surge in Afghanistan (proposed  by Obama)?  We can’t really know the full cost of these programs at this time.  But Senator Obama has given us a few details about paying for his health care proposal.  So let’s explore this.

According to the Obama-Biden campaign website (as of this writing), tax revenues will cover the the plan.

Barack Obama will pay for his $50 - $65 billion health care reform effort by rolling back the Bush tax cuts for Americans earning more than $250,000 per year and retaining the estate tax at its 2009 level.

Why would this work? We couldn’t afford national coverage before Bush instituted his tax cuts. We couldn’t afford it prior to our mounting deficit. A national health care plan could not get passed with a balanced budget during the Clinton administration. Paperless offices and preventive care have been with us for years, so how could this make a dent in offsetting the costs? Obama says he offers hope. First, no one individual, nor one administration, has the elixir to all the country’s woes. Anyone who tells you otherwise is either selling snake oil or not in touch with reality. Second, we don’t need false hope. I do believe we can accomplish change, but with the state of our economy and our deficit, it will have to happen slowly and incrementally.

The Obama health care plans is very costly. We must ask ourselves if this is the right move, or is there another alternative. In an NPR interview, health economist, Joe Antos, explains how costly and impractical the plan would be.

Antos says the biggest problem with Obama’s health plan isn’t how little it will save, but how much it will spend. One of Obama’s key promises is under his plan, everyone will be able to get a health plan at least as good as those available to members of Congress.
“If your congressman is like your average federal employee, he’s got the Blue Cross Standard Option (plan), and it costs in excess of $12,000 a year,” Antos says. “That isn’t going to happen. It can’t happen.”
Such a generous benefit package, combined with Obama’s promise to limit out-of-pocket health costs, would require enormous public subsidies. The Obama campaign itself estimates the plan could add as much as $60 billion a year to the nation’s $2 trillion health tab.
“We could be talking about 10, 15, $25,000 of subsidy for an average low-income family that is required to put in, through premiums and out-of-pocket expenses, $1,500 to $2,000,” says Antos.

On the Obama side, NPR spoke to David Cutler, a Harvard economist who helped create Obama’s health care plan.

Cutler says he knows the plan will be expensive. And he doesn’t apologize for it.

Well, I admire the guy’s honesty.

So once again, I’m asking how Obama plans to reduce spending and pay for all these programs.  Realistically, it just isn’t possible.  This doesn’t make Barack Obama a bad man. It just makes him a man.

So every night, after the kids are put to bed, and sometimes a little before I sit down in front of the television and I settle in for my healthly dose of financial ruin and political catastrophe.  In the 9:00 hour I usually flip around between Fox and CNN.  When I flip over to CNN the guy formerly known as the host of the reality game show, “The Mole”, Anderson Cooper is now the guy “keeping them honest” for CNN.  For the past two weeks he’s been running a series called, ”The 10 Most Wanted: Culprits of the Collapse“.  This of course is referring to the credit mess our country and now the world finds itself.

The Culprits of the Collapse according to Anderson are,

“..a rogue gallery of Wall Street executives, politicians, and government officials who did not do their jobs. It’s time you know their names, their faces, it’s time they be asked to account for their actions.”

These are the culprits Cooper selected:

1. (Check, but #1?) YOU!. Us, the consumer.  According to the article cheap credit “is like crack”.  We are dramatically outspending our saving habits.  This is probably true, but someone had to make the crack and sell it, yes? 
2. (CHECK!) Franklin Raines for Fannie Mae CEO.  Raines hid problems with the books at Fannie Mae so he and the other executives did not lose large personal bonuses.  Resigned after SEC investigation backed regulators claims of hiding financial problems.
3. (huh? Check.) Bear Stearns CEO James Cayne.  Well, Cooper’s report is basically a hit piece on Cayne as just being a bad guy.  There is zero information on what exactly he did other than the claim that he wasn’t paying attention, his employees didn’t like him, and he ran the company into the ground.  Nothing is reported on how exactly he ran it into said ground.  Bear Stearns should be on the list, but Cooper didn’t make the case.
4. (check.) Countrywide and Angelo Mozilo.Mozilo is former Countrywide CEO.  Countrywide was the king of sub-prime mortgage lending.  At least they were honest, saying, “They were acting in line with goals of both the Clinton and Bush administrations” to put more low income people into housing.  Claiming they were only using the tools such as sub-prime lending the government had made available to them. 
5. (check.) Beazer Homes - Home Builder and Mortgage Company.  Under investigation by the FBI, Treasury, and the US Justice Department for fraud change mortgage applications to make buyers look like they qualified. 
6. (easy scapegoat?) Alan Greenspan for Fed Chairman.  The claim here is that he kept interest rates too low, allowing banks to offer low short-term teaser rates too easily.  In my opinion, his job is to manage the money, not regulate the banks and insurers. (Chris Dodd, Barney Frank couldn’t get some time here? They ARE the oversight of the banks and insurers.)
7. (check?) Former Senator Phil Gramm.  According to the Cooper’s report, he is on the list because in 1999 he push a bill, which was passed, to allow banks and insurance companies to merge.  In 2000 he led the charge to reduce regulation on those two business units.  My trouble with this report, is a lot of their analysis relies on an economist that Cooper’s report refers to as “progressive”.  Additionally, the regulation that still existed, even after Gramm reduced it, still caught the problem.  Congress decided to ignore it.
8. (check, I think.) Chris Cox, SEC Chairman.“The Sheriff of the Stock Exchange” The claim is Cox ignored the warning signs of the coming collapse.  Cox claims he didn’t have the authority to step in.  At the very least, he’s accountable for not getting in front of every TV camera that would listen to tell the investors there is a problem.
9. (check.) Lehman Brothers and Richard Fuld.Fuld was Chairman of the Board for Lehman since 1994 until a few weeks ago. According to Cooper’s report Fuld pushed the company to continue to buy bad debt supposedly claiming people are making a “mountain out of mole hill” and “we’ll make a lot of money”. 
10. (check.) AIG and  Joe Cassano.  Cassano as head of AIG financial products division who willingly took on bad credit-default swaps and CDs. 

Anderson’s choices for the list and analysis of them are nothing more than a populist ratings piece.  There is no information or real analysis at all.  It’s thought provoking in the sense that celebrity rags provide headlines to think about while waiting in line at the grocery store.  If fact, by omission, I don’t think Mr. Keeping Them Honest was honest at all. 

Where is Christopher Dodd?  The guy who is on the record admitting he took sweetheart deals, and got loans nobody else in the country could get because he was a friend of Mozilo.  He is not so much as even mentioned in the piece by Cooper.  Dodd is THE CHAIR of the Housing, Banking, and Urban Affairs committee, and he is getting sweet heart deals from the lending company at the center of this crisis.  In my opinion he deserves more than a mention, but Cooper didn’t even give him that.

Maxine Waters was quoted in Cooper’s piece on Countrywide, like she was an authority, saying,

“Mozilo…tried to have people believe he was only after helping the poor people and minorities get into homes.” 

Cooper, again, makes no mention of Ms. Water’s role in all this.  In 2004, she endorsed Frank Raines, even after he resigned, and condemned the regulator for trying to warn the senate Fannie and Freddie have problems. 

“…under the outstanding leadership of Mr. Frank Raines, everything in the 1992 Act has worked just fine.  In fact the GSE’s have exceeded their housing goals.  What we need to do today is to focus on the regulator, and this must be done in a manner so as not to impeded on the affordable housing mission.  A mission that has seen innovation flourish from desktop underwriting to 100% loans.”

What’s the difference between what she claimed Mozilo was doing, and what she said?  She was supporting the exact same argument for which she criticized Countrywide.  Cooper couldn’t mention this?

Where oh where is Barney Frank?  (if I didn’t think it would annoy the readers, I would have made this blink)  This guy has continued to blatantly LIE about this entire situation and his roll in it, all the while blaming everyone else. 

In the very same hearings Waters made her comment to the Fannie & Freddie regulator Frank said,

“…you seem to be saying these [problems] are in areas that could raise safe and soundness concerns.  I don’t see anything in your report that raises safety and soundness problems!” 

While he was a ranking member of the Financial Service committee the Bush Administration and then Treasury Secretary Snow went before congress to try and get more regulatory oversight on Fannie and Freddie because of their growing size.  Frank said in those hearings, “Fannie Mae and Freddie Mac are not in a crisis.”  He went on to say the government should be doing MORE to encourage low income families into home ownership.  He wasn’t done there, he went even further,

“The more people that, in my judgement, exaggerate a threat of safety and soundness, the more people conjure up the threat of serious financial loses to the Treasury, which I do not see.  I think we see entities that are fundamentally sound financially, and would withstand some of the disaster scenarios.  And even if there were a problem, the Federal government doesn’t bail them out.  The more pressure there is there, then the less I see in the terms of affordable housing.”

This guy is NOW the Chairman of the Financial Services Committee.  Anderson, couldn’t mention this either?

How about the fair housing act of 1977?  How about ACORN forcing and demonstrating against banks that would not give loans to people in low income neighborhoods?  How about a mention?

There is plenty of blame to go around here, but to not even mention some of these things is dishonest investigative journalism.  Anderson Cooper you can do better than this!

I don’t think the US Automakers get it, and I hope the US government doesn’t decide to bail them out investment bank style.  The Detroit Free Press has written an analysis on the plans GM has for Chrysler, should the merger talks between the companies come to fruition. 

GM is saying it would simply add the Chrysler brands to it’s already expansive product line.

Chrysler’s brands would become just like Chevrolet, Pontiac and Buick,

Conflicting brands could be dealt with in a few years after this industry turmoil has passed, one of these people added.

The US taxpayers have just given $25B in bailout money so that GM can continue to make the crappy cars it always has, and in addition take on the crappy cars made by Chrysler too, without changing a thing.  We’re giving them bailout money for this?  Why do we keep rescuing these automakers who refuse to change their business models?

If you look at this situation in more general terms, weren’t we just told the reason the credit problem is so bad, and the banks are failing is because they got so large.  The Treasury Secretary and the head of the Federal Reserve  told us that enormity is why their collapse requires a bailout.  Applying that same logic to the auto industry, it appears to me we have just given them $25B to consolidate into a few, more enormous companies.  Why is this OK, and that not OK?

Oh yeah, and by the way, there are 3500 Chrysler dealers nationwide.  What happens to those?

“excess dealers” would cost GM nothing in the short-term and that some — if not many — will fail on their own anyway.

So essentially GM is saying they need the US taxpayers to give them bailout money to keep them in operation.  However, when it comes to GM’s concern about Chrysler’s 3500 dealerships, let them fail on their own.

Stop the madness!  It’s time we let GM and Chrysler fail on their own.  The sun will still come up the next day.