[ExI] Greed + Incompetence + A Belief in MarketEfficiency =Disaster

[painlord2k at libero.it]

Il 30/01/2009 18.27, Henrique Moraes Machado (CI) ha scritto:
> Painlord> Germany, USA, France, Italy all they want help/bail out their
> car sector
>> so it will survive the crisis. The problem is overproduction but if
>> they all do the same, the overproduction will continue.
>> So, herd mentality is not only in the market, as BillK said, but also
>> in the government.

> The problem with the auto industry is not overproduction but
> underselling. The production volume was ok until people stopped buying.

The problem is people have not and had no enough money to buy the same 
number of cars and home and all other stuff.
The housing bubble gave them the impression (an illusion) to be able to 
buy homes, gain money from them and be able to afford the new cars (and 
other stuff).


> Apart from that, this should be taken by the auto industry as an
> opportunity to do things differently.

For example, abandon the Taylorian model of industry where the worker is 
dependent from the industry for health care and pension security.
The Health Care and the Pension Plan are personal business of the 
employee. The employer must give the money for it and then be obligation 
free.


> Why do cars have to be huge
> expensive hunks of steel with engines capable of towing a house?

Because buyers like them and want them?

> Why a four or five seat car to mostly transport a single person?

Because this is how the buyers want it.
And, sometimes, the law prop them to buy bigger cars (like my insurer 
that lament his accountant push her to buy a bigger car and not a 
city-car for the tax deductions available - she go for the city-car for 
the easy parking).

I wrote about government interfering with the markets?

Mirco