Sunday, March 8, 2009

Detroit Goes To War Over Gas Mileage


In this day and age of bailouts by the billions, it amazes me that Detroit automakers still think they should have a say in what kinds of cars they manufacture.
For decades these companies have blocked and impeded change to our nation's fuel economy standards. Which is regulated by the Environmental Protection Agency (EPA), and who has, since the Bush-era, prevented places like California from developing stricter standards.

The automakers claim that any new stricter regulations would stifle innovation, but yet fail to account for how, with the current standards, the end result is still a lack of innovation. For decades Detriot's Big Three could of been leaders in innovation and manufactured 100 mpg vehicles, but instead manufactured gas guzzling SUVs and trucks. Then have the nerve to complain that, although people want 100 mpg vehicles, to innovate and give the customer what they want would prevent innovation.
It is no wonder Detriot's Big Three is on the verge of bankruptcy.

Don't get me wrong, I think the automobile manufacturing industry should be government supported, if for no other reason than places like Japan and China support their automobile manufacturing. Therefore to compete with Asian auto manufacturers, we need to compete on an even playing field. However, that does not mean that they should be given free reign to obstruct what consumers want, or that government should not have a say, if they are supporting them financially. Hopefully, with what could be their final battle over EPA miliage rules, will be one they lose.

(Photo Courtesy of TIME Inc.)

Sunday, March 1, 2009

Economy Slumps Job Losses to 60 Year High

I'll tell you, there is not a day that goes back that I one can not read how the job losses continues to decline, each to a new "all time high." In fact, according to the Institute for Supply Management (ISM), which is the single leading indicator marking the end of a recession, "The ISM plunged to 32.9% in December...and is expected to dip back to 34% in February" (WSJ: MarketWatch). What do these numbers mean? it means that our economy is continuing to decline and that the bottom still has plenty of room left.

If that was not bad enough, the Department of Labor is soon to report, for Februray 2009, that the current unemployment rate of 7.6% is expected to rise 7.9%. Now keep in mind that none of these figures reflect contract works, part-time workers and those who have given up looking due to being unable to find work. If you include those numbers, according to Meryl Lynch, the actual unemployment rate is much higher at 13.9% (Financial Week). If you compare that to the "Great Depression" of 1929, which peaked at 25% in 1933 (NY Times), we are more than half way there.

Most economist believe that the economy will continue to get worse, as more are forced to seek temporary or contract work. As a result, we continue to break new records, which were set back near the days of the "Great Depression." While the stimulus package will booost the economy, it is still to early to tell if it will make a significant, long term, difference that can revive our economy.

(Photo Courtesy of: Bureau of Labor Statistics)

Sources:
NY Time: http://www.nytimes.com/2008/10/05/business/05count.html?_r=1
Wall Street Journal: http://www.marketwatch.com/news/story/Worst-job-losses-60-years/story.aspx?guid={3DD6787D-0D70-4B14-94EC-808F4212D419}
Financial Week: http://www.financialweek.com/apps/pbcs.dll/article?AID=/20090206/REG/902069980