My 3-Step Solution for GM

Here's my white guy with blue eyes solution for GM:

Step 1: Declare Bankruptcy and Restructure
Get out of the union contracts and pension obligations. I'm done with unions. I'm sorry if you are in a union and you love them, but they are outdated. Companies have to take care of their employees now, even if their employees work in China, Indonesia, or South America companies no longer get away with treating their employees like crap. Its not 1920 anymore. Unions are just another way to allow people to be lazy. I bet that people have been more productive since September of 2008 than they have been in years because they are now competing to keep their jobs. If you are in a union, you don't have to compete for your job and you get paid more than you are worth. Its a burden that companies can't bear, especially when their product is crap (see step 3).

Step 2: Stop Making Cars that Suck
GM makes the following cars that are terrible: the Cobalt, Aveo, Malibu, Impala, and the HHR. This doesn't include the entire line of Buicks, Hummers, and Pontiacs that can go as well. Don't get me started on Chrysler (which is a whole 'nother animal), that PT Cruiser is hot garbage. GM should make the trucks and SUV's because that is what you are actually pretty good at. I don't care if you just stop selling cars other than the Corvette and the Cadillac line, or if you private label a Toyota or a Honda, but stop making the current crappy cars. Here's a crazy business model: make products that you are good at making and carve your niche in the market.



This is the only car I refuse to rent. Jesus H. Chrysler, give me a break.



Step 3: Copy Ford
Ford hasn't had nearly the problems that GM has, so figure out why and do it. Not that tough of a concept, car companies have copied each other from the beginning of time. That's why there's only a couple of difference options available after 100 years of mass production.

Finally, do not let the government tell you who to hire or fire or how much to pay your employees. The government is full of lawyers and career politicians, not car-guys or businessmen and they cannot run a government, much less a car business.

Man-Made Financial Crisis

So, I hear a lot of people slinging blame around for the financial crisis. The banks were greedy and loaned money to people that couldn't pay their debts. The people were greedy and lived beyond their means. The investment banks were greedy and made money by selling investment packages containing the bad loans. The one entity that is escaping a lot of blame is the federal government.

Money first started being used about 3,000 years ago when people got sick of bartering for everything. The day after the first person started using money, the second person borrowed it. In that 3000 years, lenders have learned a thing or two about lending money. What made banks throw all of that knowledge about risk and reward out the window? Federal government intervention.

Because 'underserved' demographic populations were not able to obtain loans as readily as white people with blue eyes, the Federal Government stepped in with Bill Clinton's (A white guy with blue eyes) National Home Ownership Strategy. Basically, home ownership was the gateway to financial freedom and was deemed 'the American Dream'. Who can vote against the American Dream? There were several elements including reducing the cost of building houses, targeting assistance to underserved communities, opening homebuying to underseved populations, but most importantly making financing more available, affordable, and flexible. So, create new financing options, reduce and remove downpayment requirements, and reduce closing costs. Surely the Federal government knows more in their almost 210 years of existance knows more about lending money than lenders have learned in the last 3,000 years.

By bending the rules established by banks and lending institutions, the government made it possible for those people who could not previously get loans to receive loans. It also made it easier for everyone to get a loan, or two, or three. Everyone made money. Houses require lawn mowers, rakes, concrete, drapes, blinds, carpet, appliances, and everything else that makes your house, your home. From this, Home Depot and Lowes thrived, the logging industry and furniture industry made hay. It only made sense for the banks to wrap up the loans and sell them as securities to reduce their risk.

Well, if everyone is buying houses, then the price of houses goes up. So, the cost of the ancillary housing equipment could be rolled into the loan and remain under the value of the house. Since downpayments were a thing of the past, there was little investment from the homeowners into the house. The entire economy grew, until the oversaturation of the market caused housing prices to drop. Those riding the wave were caught with too much debt and the banks were left holding the debt as foreclosures and bankruptcies came through.

So, it is my contention that government intervention got us to where we are today. Further, I believe the market would correct itself if government would remove its impact on the economy. Unfortunately, if there's anything I've learned over the years, it is that the government needs reasons for the population to require its existance.

White People with Blue Eyes

The inspiration for this blog has been building since before the 2008 Presidential election. I disagreed with almost everything Obama said through his campaign, or at least took issue with almost all of his ideas. I basically just threw my thoughts into conversations, but I never really felt like it meant anything since most of the people I talk to share my thoughts. But now, Brazil's President, Luiz Inacio Lula has called me out. The quote in its entirety is “This crisis was caused by the irrational behavior of white people with blue eyes, who before the crisis appeared to know everything and now demonstrate that they know nothing”.

So, as a white person with blue eyes who thinks he knows everything, I'm willing to create a blog to demonstrate that I, in fact, know nothing.

The first thing that I know is that I am a white guy with blue eyes, here is proof.