Friday, 12 December 2008

Good Cash After Bad

Since I seem to be on the economic downturn theme, why would a sensible investor throw their precious money at a fundamentally flawed investment that (a) is failing and will continue to fail and (b) is expected to need further funding sometime soon as it travels further downhill, onto its very uncertain future?

So why oh why is the US taxpayer being forced to pump money into three failing US car manufacturers?

Could it be something to do with weak politicians who won’t say no to unions, their bloated workforce and pampered perks?

The Japanese and European car manufacturing industries have been killing Detroit for decades. Detroit has been making crap cars at a loss for too long. They need some aggressive restructuring. What we need now is strong politicians who are prepared to say: no more money, sort out your businesses, but we will fund retraining for all those you lay off.

So simple. So bold. So unlikely.

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