EclectEcon

Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre                                     A View from/of the Econochasm by John Palmer

Richard Posner deserves the next Nobel Prize in Economics
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the Soft Underbelly of the No. Amer. Auto Industry;
The Auto Workers' Job Bank (and foreign competition?)
Phil Miller clearly explains why the Big-3 automakers and their employees are being out-competed:
Leaving aside the fact that it's difficult to talk about cars as being "foreign-made" and "American-made" these days, consumers are not the ones to blame for the closings. Consumers want to get the best product for their money and for lots of consumers, that means buying a car not made by one of the Big Three American automobile producers.

Blame can be appropriately heaped onto politicians who passed and lived with tariffs and quotas that shielded US automakers from competition. Blame can be placed on union and firm negotiators who agreed to contract language that allowed stuff like this:

"If there's no work, they go into Ford's union-mandated jobs bank, where workers continue to report for their shifts, even if they aren't working, in exchange for getting most of their old wages and benefits. But Ford is expected to push hard to get rid of the jobs bank when the current union contract runs out next year."

... a couple of years ago, a driver pulled his car hauler in front of a neighbor's house to pick up a car and transport it to Washington where the neighbor's daughter lives. Our boys (and dad!) thought it was really, really cool to have a car hauler parked outside so my family and I went to look at it. The driver, a friendly fellow, and I were talking about this and that , but one remark he made has stuck with me. He pointed up to the cars sitting on his hauler with their undersides exposed and said:

"When you look at the undersides of these cars, it's easy to see that Japanese cars are much better-made."

That, in a nutshell, is why consumers are not to blame for the Ford plants' closing.
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