Need rebuttal help on a RW email I received.

[Sherman A1]

I am not going to post the whole thing, but am having a grand time taking this one apart, but could use a little DU help.

This guy is playing the He's taking us to socialism card citing the Auto Industry mess. The specific comment relates to pulling the dealership affiliations, which he lays at the Gov't dictating this plan and how this reduction helps the car companies.

He also cites a government requirement that the car companies reduce marketing by 50%.

Anyone got anything on this in the form of information or reasoning. I have taken apart various other Rush talking points, but haven't kept up on all the auto industry stuff.



Thanks

[madrchsod]

1. well he`s correct on the government

telling the auto companies to ax the car dealers..i do`t know if i call it socialism and i have`t heard about the marketing but the rest is correct.

[able1]

8. Auto co's profit more from fewer dealers. So do dealers.

They all prefer policies that get closer to monopolies than to more competition.

[Mythsaje]

2. Is this person really trying to argue that the "free market" has

done the American auto industry any good at all? Despite all the competition, they've consistently put out inferior products without the slightest hint of shame for several years (if not decades) and now expect a bailout with no strings attached? Put it another way, would this guy give money to his shiftless brother in law who got fired from his job because of laziness and/or incompetence without insisting on getting something for it?

[Kalyke]

12. The products weren't inferior - just the PR.

The products have been less expensive and equal to their Japanese counterparts, but some consumers keep thinking this is 1986.

[Canuckistanian]

3. Seems to me that the government is applying good business sense

As a major investor, one can specify the terms of a buy-out.

And by getting rid of unnecessary dealerships, the government is just showing normal business acumen.

I think that the car companies privately came to the same conclusions, but were unwilling to implement the changes.

This situation has NOTHING to do with "socialism".

[Sherman A1]

11. Actually I think you are right and it reminded me of a news piece

from a couple of years ago comparing the business models of the Japanese car makers and the US ones. It was noted that the Japanese use far fewer dealerships to achieve their results.

Thanks!

[The Straight Story]

4. Tell them it is called - negotiations and then ask them this

If you owned a bank and were bailing out a company, wouldn't you make some demands on the borrower to insure you get your money repaid?

It's called business, and the people own the company, the government. And in this case, the government is the bank.

[and-justice-for-all]

5. Well for starters he does not have a clue what Socialism is...

The only thing needing to be nationalized is our Health Care, which is for the most part if they just expand Medicare to the rest of us.

The Auto industry employs more then just the people that work at the assembly plants, it has far more reaching consequences if any went belly up.

The Government has assisted them with our money, we now have a stake in that company. Since they employ so many, including beyond the auto makers walls, the Government had to step in to try to keep so many from becoming unemployed.

A company the size of GM should have been more responsible, now with our money invested in GM, rules and reorganization come along with it, like cutting cost where ever possible.

[MannyGoldstein]

6. The Government Saved Them, So It Gets A Say

This doesn't apply to banks, of course.

And ask your friend how he feels about having public military, roads, police, water, sewers, and so forth. He might be a Socialist too...

[RandomThoughts]

7. He has framed the argument.

He is making the argument that we are moving to socialism. But that avoids the bigger topic of the value of pure unregulated capitalism. The argument would be to first get a concession that some government programs are good. No child labor, programs for safe food, etc.

Then after convincing him that the label of moving to socialism is not the issue. Compare how the programs can help or hurt society. Don't let him get away with a blind accusation with a label without making him explain why each label is bad.

Politically its a bit different because the word socialism is a loaded work, it has been packed with alot of sneer. So that is probably his attempt to attach the action to that sneer, since his argument is not about weather it is good or not, but just going after the reaction people will have.

There are options, redefining using a new word is a common way to do it, that way they have to reattach the sneer to the new word, or transfer it by saying it means the same thing. Or using a word with good emotion attached to it.

Like saying it isn't socialism, it is societalism, because it helps all of society including the private sector and competition, by helping transition to a more competition including ideas of more then just money competition, and by modifying the negative cultural and buisness effects ads have on consumerism. Consumerism is not good for buisness because it creates demand where something is not needed. If demand is to be created it should match some known good for society. Like a low pollution car. It should not just be created to lazily push a product that does not have demand based on its own value.

The specifics of dealerships could be addressed by showing how vertical monopolies take from competition and are not free market, so by removing dealerships you are increasing competition a free market idea. Also car dealers are not a result of demand for cars, but an industry trying to create the demand to increase sales. If a demand exist a dealership will spring up, currently many of them are to create demand for there product in an advertising like method.

The lessening of advertisement is tougher, advertisement is more about increasing consumerism then informing people of what is available. But in an environment where only one company has limited advertisement it seems to create a problem. But advertisement adds nothing to productivity. If everyone cut advertisement in half, there would be absolutely no change in the effect in what car they buy, only in how much extra consumerism is generated.

As far as advertisement limitations for one company, they get that revenue to shore up balance sheets, and government funds has paid for short term loss if it lessons sales, but more importantly if they have to 'gin' up sales with advertisement they should be transitioning to some industry that has its own demand. Green cars for example, since their is an implicit added demand based on thoughts of future direction of where cars should be.

The real way to cut advertisements is tax it, since any ad level, lowered across the board, leaves for same level of competition, and then that waste money can be put back to good use instead of no use.

[demosincebirth]

9. Socialism? Ask him what he thinks of Medicare and SS.

[Sherman A1]

10. That's on my list as well as

The EPA, OSHA and the Food Inspection Service.