No one is too big to fail - Disney

[McAvoy]

One of the outcomes when the car companies were bailed out was closing down Pontiac. A car manufacturer that was around for fifty years or so and responsible for some of the most iconic cars of the 60's. But by the time they were shut down, Pontiac was a former shell of itself. It made sense at the time and even now to shut them down.

Sometimes you just have to pull the plug.

[Fuzzy Necromancer]

I don't think Disney will die unless we get a demigod to slice off all but one of the heads, cauterize the stumps with fire, and then bury the last one under a rock.

[goodperson25]

I don't think Disney will die unless we get a demigod to slice off all but one of the heads, cauterize the stumps with fire, and then bury the last one under a rock.

Bonus points if we can rope in the demigod's nephew to act as a sidekick.

[Darth Wedgius]

That's ludicrously over-simplified.

It's not a case of "people need to eat, therefore there will be restaurant jobs." That's way over-simplified. They offered a style and food selection that some people liked and some people didn't, and that platform is gone. People could stay home and eat there. People could have just been in the habit of eating at this restaurant and there could be less demand now that it's gone. In this case, I used to frequent that chain, and there is no replacement.

In this case, they were a buffet style restaurant, and couldn't see a reasonable way forward for operating under the new rules for SARS-CoV-2. Neither lack of demand nor mismanagement were involved, unless you want to label lack of planning for a pandemic as mismanagement.

A pandemic is an example of the sudden unpredictable events that can result in actual closures that are not due to either form of bankruptcy (mismanagement or structural). I did in fact include that as an example of when the government could intervene to good effect. GM was not that. GM was not failing because of a pandemic, GM was failing because they were mismanaged. As we saw when they spun off car brands, others were able to take the same brands, the same factories, and make a profit making cars. That's mismanagement 101.

And my example was to show that jobs don't always come back. Sure, sometimes they do. Sometimes they don't, however.

Are you able to understand that?

If Disney goes under, there may be a reduced demand for movies. Disney has fans of Disney. If Ford went under, people unable to get the newest F-150 may sit on their old cars longer, decreasing demand.

And when typewriter manufacturers went out of business there were people who hated the newfangled PCs and wanted their typewriters back. To this day there's some writers who maintain ancient IBM Selectrics and there's even vintage part manufacturers who make new letter balls and parts for the Selectrics, so the small number of enthusiasts who swear by their Selectric can still use it to write. Doesn't mean that IBM wanted to keep any typewriter plants open though.

If Ford goes under and there's still sufficient demand for their pickup trucks, someone will buy their factory and make F-150s. They might have a new logo or whatever, but they'll still be F-150s. It's not cheap to retool a plant, so if the demand is there then the new purchaser will use it to make the F-150. If there isn't sufficient demand for pickup trucks to justify plants making them, then the plants will be shut down or retooled, and the few F-150 enthusiasts can do like the Selectric enthusiasts.

And it seems like you missed what I was saying. Lower demand for trucks can create fewer jobs because people could keep their trucks longer. I said that. Do you not understand how that could reduce the overall number of trucks sold?

Jobs can be lost. They can go bye-bye. The fact that unemployment rises and falls outside of global crises should itself be evidence of that.

Of course they can. But jobs can never be lost due to mismanagement. Mismanagement is indicative that a company can and should fail. It should be allowed to fail. Allow its assets to be sectioned off for debtors. If the core business is viable, then it's viable.

Look at the Carrier plant. It was scheduled to lay off a bunch of people. Trump gave it a huge loan. What did they do? Laid off a bunch of people. Those jobs weren't lost due to mismanagement, they were lost due to automation. Money couldn't save those jobs, because money wasn't why they were eliminated. They were eliminated because automation had made them obsolete. Carrier is a profitable company and HVAC equipment is still in demand. They eliminate jobs because they are properly managed, and automation means those jobs could be done cheaper, faster, and more accurately without people.

America's manufacturing, minus the COVID problem, is at a record high. We have never manufactured more than we do today. And yet every year the amount of people involve decline, the number of jobs decline. Manufacturing has never been in crisis, manufacturing has never needed a bailout. Those jobs are lost due to automation.

If you want to give people money, give them money. Don't give companies loans and pretend that will "create jobs". It won't, it can't. Only demand can create jobs. Giving corporations money just rewards them for bad decisions, and causes actual job losses.

And yet the GM bailout saved jobs. The Carrier bailout didn't; fair enough. But that doesn't mean that "giving corporations money just rewards them for bad decisions, and causes actual job losses." Certainly not always. Even in the Carrier case, that money didn't result in job losses. Those people were already going to be laid off anyway. The money saved some jobs.

[GreyICE]

Lets see if I can clear up some of these misconceptions.

And it seems like you missed what I was saying. Lower demand for trucks can create fewer jobs because people could keep their trucks longer. I said that. Do you not understand how that could reduce the overall number of trucks sold?
...

And yet the GM bailout saved jobs. The Carrier bailout didn't; fair enough. But that doesn't mean that "giving corporations money just rewards them for bad decisions, and causes actual job losses." Certainly not always. Even in the Carrier case, that money didn't result in job losses. Those people were already going to be laid off anyway. The money saved some jobs.

And here we go. So, the demand for pickup trucks is down, there's fewer jobs making pickup trucks, and less trucks sold. We agree. But what does the Ford Motor Company have to do with that? Ford doesn't buy pickup trucks. They're not a consumer. They don't create demand. They fill a demand.

When gas prices go up, when environmental issues are on people's minds, pickup truck sales fall. The entire "drive a pickup" was a fad thing anyway in the early 2000s, you had people in suburbs driving around in an F-150. They were even selling 5 seat pickup trucks, so you could take the entire family to Olive Garden in your truck. Low demand does indeed lower sales. But bailing out a failed industry doesn't increase demand. It just wastes money.

As for GM bailout, the only jobs it saved were executive ones. Were the executives desperately laying off workers? Yes. They were incompetent. Workers make cars, when your business is selling cars, getting rid of workers kills your business. What they should have done is what they did anyway - go bankrupt. The workers don't get fired in bankruptcy when the problem is bad management. The management gets fired.

As you said above with the pickup truck, low demand costs job. But GM is a company, they answer demand. If they can't do that, their assets should be sold to someone who can. And if there's a demand for cars today, would you rather buy:

1) A fully stocked, functional, and working factory that is currently turning out cars, and staffed with workers who know how to run it.

2) An empty, unstaffed factory full of machines you don't quite understand, which you'll need to figure out, hire people, and train them on to make cars.

3) A couple hundred tons of scrap metal and concrete that could be used to make an auto factory.

Not a hard choice is it? The creditors sell off option one for the highest price, to recoup the most of their money they can.

[BridgeConsoleMasher]

Lowered demand isn't really a concern with a company going under.

Specific demand for the F-150 will be moved the used goods market. There's a reduction in GDP, but you still get taxes from transfers. I doubt the value of the car will really go up over time though like the 60's muscle cars. Anyways, the only people that make the car for the people that make up the lost demand just went under anyway, so I don't see how it matters much for demand.

[Fuzzy Necromancer]

GreyICE, perhaps it would help if your argument was put another way
https://clickhole.com/efficiency-win-heinz-has-eliminated-all-their-executiv-1834414265/

[GreyICE]

GreyICE, perhaps it would help if your argument was put another way
https://clickhole.com/efficiency-win-heinz-has-eliminated-all-their-executiv-1834414265/

I can show it off with a 5 minute TED talk too.


youtu.be/3Wc9bWc-WRs

Or this one:


youtu.be/GOA8gICs_6w

"Let them fail"

[Darth Wedgius]

GreyICE, you aren't usually this slow. As I said, Ford does create demand, even though they aren't the customer. There are people as loyal to Ford trucks as to God, America, or the local football team. If there are no more Ford trucks, enthusiasm for that next truck can fall, and, with it, the number of auto-making jobs.

It's funny how you missed the point I started out with.

[BridgeConsoleMasher]

The demand for trucks goes down as far as demand for Ford trucks specifically is concerned. That's not a systemic effect, it goes without saying.

Job loss is a systemic economic factor.