Good

But not great yet. Getting there.

The auto bail out, put in small town perspective

Let's suppose the town of Keithland, population 3000 has a grocery store, Jim Dixie. It serves the population of Keithland and provides jobs, about 20 full and part time employees. Jim's is a great place to work. You work hard, but the pay is 1.5-2x higher than you can get anywhere else for unskilled labor work, and best of all you can't get laid off! Well, technically you can, but you still get paid; you just show up for work and sit in the breakroom all day and still get paid for months, even years! They also provide a pension beyond belief, lots better than anyone else in America. What does it matter, the company can afford it, the guy at the top just bought himself a brand new Cadillac Escalade.

As time goes by things change without Jim Dixie changing with them. A Super Walmart went up in Esteeville, 10 miles away. Jim Dixie never really carried a lot of low fat foods, because it was just a fad anyway. The economy slowed down, more and more people quit buying at Jim Dixie because they were overpriced for what they sold. Jim Dixie was facing a finacial crisis, so ownership decided it needed to improve the cash flow situation with a bailout from the city.

Jim Dixie's basic arguement was this: We are a vital part of Keithland and we are a big part of the community. We provide something vital, and if we go under there are a lot of people that are going to be unemployeed, and that for sure is going to put a big dent in the city of Keithland's budget.

So the city fathers put their head together, and ask the owner: "How much do you think you need to keep afloat?"

JD: "I'm thinking about $730,000."

Fathers:"Wait a minute, what's your business worth anyway?"

JD:"Well, the building and fixtures are worth about $500,000, but we have to pay out a lot in pensions, bonuses, advertising, etc. We can't lay anyone off, and we promised the shift managers big bonuses"

Fathers:"Wait a minute. How are things going to improve so the city doesn't get stuck with the tab?"

JD: "The grocery store in this town is vital! Just think of the jobs lost and what that will do to Keithville if we have to go bankrupt!"

Fathers:"Well what happens if you go bankrupt?"

JD: "Well, someone else will come along and buy it."

Fathers: "So what you're saying is that someone will come along and probably do a better job at staying competitive with Super Walmart down in Esteeville."

JD: "Maybe, but we've promised all these employee's huge bonuses and overtime and sitting around doing nothing and getting paid. That's all going to go away!"

Fathers: "??"

This is in a nutshell what the conversation is like in the auto industry. This particular bailout would cost the city of Keithland about $250 per person in the city. I intentionally made the number of employees the same percentage of Keithland as what the auto industry is in the United States.