Tuesday, June 02, 2009

Thoughts Economic, What We Own

So now we, as taxpayers, own two car companies. Along with parts of some banks and maybe an insurance company or two.

It looks like we won’t be owning Hummer. I know personally I’m crushed by that. All kidding aside according to the article:

GM said the Hummer transaction was set to close by the third quarter of this year and should secure more than 3,000 jobs in manufacturing, engineering and at Hummer dealerships around the United States.

Anything that can save jobs and dealerships is a very good thing. I think communities are going to get an eye opening when all these dealerships start closing (2,600 will be closed by the end of 2010). They’ll see just how much they contribute to the community with all the things they sponsor. Some places may not be able to cover that. Now a large part of this is sponsoring youth sports teams. Most notably baseball but there is a place for that. In some cases there will be leagues that won’t be able to survive without the support of dealerships.

It will be interesting to see how GM comes out of this. It will also be interesting to see what happens to all the people that will be laid off because of this. This is going to be tricky for Obama. He’ll need to show that the federal government can help people out. If not the Dems will suffer come elections next year. But then again a year is a very long time and a great deal can happen.

There are signs through fits and starts that the economy is starting to get better. The market is up. People are spending a little more. Housing looks like it might have bottomed out. Again small fits and starts to getting things a little better. The problem is that the unemployment rate is just about the last thing to get better. And if it keeps going up what will that do to people’s confidence and at what point does this become a vicious unending circle.

That’s why GM emerging quickly from bankruptcy would be a good thing. After all Chrysler got the final go ahead to emerge from in just 31 days. Hopefully GM will be just as quick. The sooner it’s done the sooner GM can get back in the black and pay us back.

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