today. He makes the clear case for some quarters of negative growth in
the future, but his view is that a double dip is irrelevant. I agree
with him.
While it may be hard to forecast a double dip it is now a slam-dunk that
we are going into a longer period of sub par growth. That outlook is
even worse than two quarters of negative growth followed by six quarters
of anemic recovery. If we go two years with growth around 1% our fiscal
books will be in the tank. We would be so far off on the critical
issues of total debt, debt service to GDP, debt to GDP, deficit to GDP,
employment and unemployment that I can’t envision how we could dig
ourselves out of that hole. If we don’t grow we die.
Krugman says that we should throw everything we have got at the problem.
It was clear that he was angry at the lack of action at the Fed and the
Administration. I got a sense of trepidation in his words. Here are his
suggestions of what should be done:
The
Administration can use Fannie Mae and Freddie Mac, the
government-sponsored lenders, to engineer mortgage refinancing that puts
money in the hands of American families.
Mr. K we are doing that. The Agencies are 95% of the lending. One can
still get a 96-1/2% LTV loan for heavens sake. QE-1 and now QE-2 have
killed savers and brought mortgage rates to 50-year lows! With HAMP and
HARP nearly anyone who has a chance of landing on their feet can get a
trial modification. The FHA is lending $50k to people in default at zero
interest and the loan is non-recourse and subordinated. What the hell
is that?
Mr. K wants to turn up the dial on this? The only way to do that would
be to drop lending standards. The stupidest thing that we could do. Bad
lending got us into this mess. Bad lending is not going to get us out
it. It will only ensure our demise.
The Fed can buy more long-term and private debt.
Private debt? Who’s private debt? GE’s? BP’s? Citi’s? AIG’s? This is
over the top in my opinion. We have already socialized big parts of the
financial system. Now Mr. K wants everything to be owned by the
government. This is not an idea that will sell in America. There has
already been too much intervention. If the Fed starts buying Wal-Mart
bonds America is finished. And heaven help us if the buy common stocks.
Japan started doing that 20 years ago. Their market is down 70%.
The Fed can raise its medium-term target for inflation.
What does that mean? Does the Fed come out with a statement that says, “Our old target for inflation was 2%, we have changed it to 4%”?
There is only one way to achieve that goal. The Fed would have to print
money. Trillions of it. The fed balance sheet would go to $5T. To me
this is assured destruction. I don’t think we would get to $5t. The
financial system would implode before we got there. America would look
like Argentina in the 1980’s.
Treasury can finally get serious about confronting China over its currency manipulation.
I’m sorry but just shut up with this Mr. K. In the past 24 months the US
has intervened and supported financial markets at levels never before
seen in history. The Federal Reserve bought $1.75 trillion of fixed rate
paper! Have you looked at the tape lately Mr. K? The yields you’re
seeing are in no small part due to those POMO operations. And he wants
to do trillions more? Talk about a double standard. When America
actually stops the intervention in the global credit market it can then
sit down with the Chinese and talk turkey. Before that it is the pot
calling the kettle black. And Mr. Krugman knows it.
These steps are big gambles. The downsides are enormous, the upsides questionable. Krugman acknowledges this:
Nobody
can be sure how well these measures would work, but it’s better to try
something that might not work than to make excuses while workers suffer.
No one wants to see “workers suffer”. I think this use of words was a
cheap shot. The fact is the steps Mr. Krugman is advocating could very
well destroy most of the things we consider important.
Friday evening. The markets are up big. The weather is perfect. But
there are big storms in the Atlantic and I am worried that we are dead
either way.
Let's not paint with too broad a brush here.
I hope you've noticed some particular demographics trends as far as civil disorder, rioting, crime, and the absence thereof.
The "blood in the streets" will depend solely upon what people are in the streets
I'll pass on that sentiment. Thanks anyhow.
web bot
http://ferfal.blogspot.com/2010/08/what-kills-you-after-economic-collaps...
Tuesday, August 24, 2010
What kills you after an Economic Collapse
Even though by definition the ultimate objective is living, when we talk about urban survival we aspire to a minimum amount of freedom and dignity in our lives. Living as a prisoner, slave or in a cardboard box under a bridge and cleaning windshields for a living is still living, but alas, its certainly not the life quality we want. Its about maintaining the minimum standard of living we need so as to not go nuts. None the less, I though it would be interesting to notice what actually gets you killed after an economic collapse. I think it’s an interesting exercise and it also helps reevaluate our priorities from a more realistic perspective. For this I used some statistics after the 2001 Argentine crisis. Its not an exact science, but it does put together an interesting picture.
Rioting and social unrest: It may come as a surprise for some, but these are by far the ones that kills the less amount for people when these things happen. In our case it was 32 to 38 people across the entire country. About the same amount still dies per week in Buenos Aires suburbs alone during armed robberies and other crimes.
Already in our first stop, we destroy a popular survivalist myth: When a country collapses, hordes will run wild burning every single building to the ground in every mayor city. The idea that bugging out should be some sort of standard procedure when there’s social unrest is simply flawed. The preconceived notion that somehow made it from Hollywood to the real world, that the population can go down by significant amounts in a matter of days with millions dieing is not realistic at all. My dear friends, that only happens in fiction books and movies. It happens to be good entertainment but don’t take it any other way.
Hunger: As of Match 2010, 2.920 kids starve to death in Argentina per year. (source: http://www.elmundo.es/america/2010/03/28/argentina/1269793765.html) That’s children alone and you could easily add another 50% for adults and seniors. Older people have it pretty tough here since most pensions and retirement programs (recently “nationalized”) place the old folks BELOW the poverty line. This means, its not enough to even classify as poor. They can’t buy the minimum calories required per day to survive and the medicine they often need. Lucky for the government, an old person dieing of malnutrition isn’t as obvious or as unnerving as seeing a healthy little boy or girl become a bag of bones.
Child in a Hospital in Tucuman, Argentina
In average, at the very least 12 people die per day of hunger in Argentina. This of course doesn’t take into account all the illneses that may caouse death because of a poor diet. In any case, food is of course of extreme importance and history keeps teaching us that storing 6-12 months of food is a life saver during catastrophic events such as an economic crisis, planned genocide (Irish Potato Famine) or civil wars that have long term duration (seriously consider going for 12 months)
Crime: In the Bs As suburbs where I live, 4 to 8 persons are murdered every 24hs during robberies. Like with inflation, the government has its own twisted way of what is actually considered murdered, so I’ll go with the private census and statistic companies which are more realistic. (source: http://www.diegopietrafesa.com.ar/mistextos_detalle.php?id=30)
Poverty: Here's where it gets a bit more complicated to get hold of hard numbers. How does poverty kill you? The place where you can afford to live, how many police officers and patrol vehicles it has available per block, what kind of health services are available. Is it close to some of the polluted dumpsters and streams full of sewer water and chemicals the factories dump in them with no control whatsoever, causing cancer, genetic disorders, malformations and respiratory illnesses? Suffice to say, child mortality rate is twice as much depending if you live in the poor parts of town, compared to the ones that are better off. (source: http://edant.clarin.com/suplementos/zona/2008/02/10/z-03015.htm)
Poverty deaths due to poor healthcare: According to UNICEF, 25 children under the age of 1 die per dau in Argentina of preventable causes such as poor treatment of illnesses that could have been cured, untreated infections, respiratory problems and low weight. If we substract the 8 kids that starve to death each day which we analized earlier, we realize that roughly 17 kids die per day simply because they can’t afford better than free public health care. I pay dearly for my private health plan, but do so gladly knowing fully well what public hospitals have to offer. As a side note, this should be a good example of how well government owned pubic health works.
Poverty deaths due to crime and location: Not all districts are the same. When you see the map of insecurity (these are only the crimes reported to this website http://www.mapadelainseguridad.com/) you see a clear difference between districts. Crime may be 10 times worse depending on if you live in a good or bad neighborhood.
Car accidents: This is something that may surprise most readers and the cause is directly linked to the 2001 crisis, with fatality rates going up ever since. Lack of control of bus drivers (responsible for 38% of the accidents), corruption when getting the drivers license, lots of drunk driving (and no serious penalties for doing so) no traffic or vial education for children in schools (not enough money for that) roads and traffic lights in poor condition ( no money) a fleet of cars that is usually old and in poor mechanical condition because of the general poor population. To make matters worse, we have a liberal government that wont take away a persons license, even if they murder people when illegally street racing. The results? Traffic accidents kill more people than AIDS in Argentina, kills more people than cancer. Argentina has 300% more deaths due to traffic accidents per hundred thousand persons than USA or Europe. 25 persons die per day, 70% of the deaths are pedestrians. You’d do well to check and look all around you when crossing a street in Buenos Aires. Ignoring red lights and not caring about hitting people is pretty common around here. Its not as if you’d go to jail if you kill someone with your car. (http://www.oei.org.co/sii/entrega3/art01.htm)
Stress and heart related problems: And we reach the number one cause of death, directly linked to the crisis. According to studies done by the Favaloro Foundation and the University of Massachusetts, from April 1999 and December 2002, there were 20.000 more deaths due to coronary illnesses than the previous averages.
Stress kills, and no doubt it kills much more after an economic collapse. Note that survivalists rarely ever discuss this, how to avoid it. The lack of hope in the future, financial problems, unemployment, it all kills you slowly in its own way. (source: http://www.cronista.com/notas/186545-epidemia-estres-el-costo-oculto-la-...)
How do you stop an Economic Crisis from killing you and your family?
1) Watch your back and look out for criminals. Avoid taking unnecessary risks going out late, going to the ATM when there’s little people on the streets.
2) Careful when driving and pay particular attention when crossing the street. Even when on the sidewalk or the side of the road, listen to car engines rushing your way: You never know when a drunk driver will go up to the sidewalk, even crash into buildings and stores. I’ve seen it happen enough times.
3) Work our two or preferably three times a week. Have a hobby, learn to relax. Go camping, have fun within your means. At least an hour per day, you should do some activity that helps you unwind.
Take care people.
FerFAL
That was before Argentina Idol was on TV.
It is interesting seeing the people. They are obviously middle class and not peasants. That should scare DC.
Well folks: forget about debt/GDP. How about debt/Revenue. Ours is now over 500%; worse than Spain, Ireland, or almost anyone else you can think of. They can't keep using bandaids and paper clips to keep the engine running. They are trying to make it to November to satisfy the one-worlders. I don't think they'll make it that long.
The engine isnt running, Tim is on the starter motor and Ben is spraying ether in the carburetor and we are pushing it down the road. When they put our nitro in the tank, the engine will fire at full throttle and no steering to a full reset.
Fresh cans of tuna have a 5 year shelf life, .62cents each at walmart.
Ah....
Been there, done that, seen the picture all ready, already been to that rodeo before.
Not a single one of Mr.Krugman's proposals is anything different that what has already been tried, excepting the fine print....e.g., buying private debt. Once rates on Treasuries are driven low, those seeking higher returns will extend along the term structure, decrease quality....etc.
A similar counter (logical and consistent, I might add) can be made opposite each of his suggestions.
The simple fact is that economies will experience substantial and extended periods of painful economic correction subsequent to excessive and unsustainable credit growth. Period.
QED
Come on, all ready. I mean the guy works for the NYT (the Official Organ of the Democratic Republic of Mature World Optimists with Views Limited to the Hudson) his bogey man is failing, his social programs are failing, his economic prescriptions are failing. Of course he's gonna call for More. He has no choice but go all in. He has no retreat to sanity. Those of us familiar with 12 Step programs know exactly from whence he comes. He's not yet hit in this case, his intellectual bottom.
Hi, my name is Keynesian Multiplier. I am a Negative Number.
He's all in, and everyone is standing up at the table...waiting for the river.
"Private debt? Who’s private debt? GE’s? BP’s? Citi’s? AIG’s? This is over the top in my opinion. We have already socialized big parts of the financial system. Now Mr. K wants everything to be owned by the government. This is not an idea that will sell in America."
Ha, ha, ha. The Fed didn't have to 'sell' anything, it already did it.
In fact, it's doing less of it now than pre 2008.
Lets start with individuals' debt. Let the "system" and its miscreant entities fend for themselves for awhile.
We either socialize it or shut it down or let it fail.
The people have already taken the initiative on this, in view of the gov't inaction. We have decided to let it fail. Eff 'em.
I see. Very enlightening.
The let it fail approach is valid but has drawbacks. Consider how just letting British rule of the colonies fail on its own would have played out. In any of the change scenarios, if what you are after is success (defined as freedom, peace and prosperity or something along those lines and not anarchy) one needs to have the replacement systems in place and ready to go. Not just be prepared to survive the step changes in society and be a non-participant in the creation of new and similarly flawed social, economic, and political structures.
Letting it fail may seem like the easy way out, but is by far the most intensive approach.
Thanks for the reply.
No, one does not have to have a backup plan. What's wrong with taking a fling and doing one's best. Your comment betrays a sort of dependence and reliance on others to maintain. We have different philosophies I guess. That's ok. I do have a wide and obvious contrarian streak. Sometimes it gets in the way of constructive discourse, for which I apologize.
No issues.
If the plan is to take it as it comes then thats a plan.
Oh, and thank you for the "government centric" comment above. Any entity that could structure and execute the plan works for me.
People acting responsibly and doing their best would go a long way to cure our ills.
I like it! You are advocating thinking outside the government box.
They cannot save us, and when they try the price is way too high.
If I were President Obama, I might be tempted to push for the "Krugman inflation hail-mary". This would be an immediate one-time expansion of the money supply by about 20%. For example, he could mail "stimulus checks" totalling about $200 billion to every taxpayer. The money would come from a special issue of treasuries which would be purchased directly by the Fed. This could be expected to cause prices to increase by about 20%. If this was done immediately, we might perhaps expect about 10% inflation for 2 years and inflation might even be decreasing by November 2012.
After the inflation, all those mortgages which are 20% underwater would be back above water and a lot of dodgy mortgage loans would be looking a lot better. Effectively, debt levels throughout the economy would be decreased by 20% and people would almost certainly be spending more due to lower debt-to-income ratios (and because of fears of losing purchasing power due to inflation).
Of course, this stunt would be very dangerous and at a minimum would certainly raise US government interest costs substantially for a long time to come. In the worst case, it could trigger a worldwide sovereign debt collapse. So I certainly would not recomend this idea!!! But politicians generally don't seem to be looking forward any further than the next election, and Obama's reelection prospects are currently looking rather grim. So perhaps he might be open to a radical scheme like this.
I rather doubt that Bernanke would go for this idea. But it is something to consider before loading up too much on long term USTs.
That money would go to debt reduction, starting with credit card debt, and then the left-overs go under the mattress. Come up with a better plan like handing out debit cards that can only be used to buy consumer crap. If you're going to waste my money at least do it in a fool proof manner. Oh, wait, did I say "fool proof"? Never mind.
What you suggest would be economic suicide because it would tell the rest of the world that the U.S. had lost all semblance of restraint. The only thing that holds a fiat currency system together is the belief that the issuing government won't do what you propose. Once they do it, Pandora's box is opened and it's "game over".
autorefi autounderwaterfix autowithholding to the irs
Interesting philosophical argument but much smarter people that our current leaders wrestled with these problems at the Constitutional Convention. I suppose it's human nature to tinker but what Krugman is really after is a socialist state which in the opinion of this humble blogger is unconstitutional for a myriad of reasons, not the least of which is the establishment of religion clause
Three simple words: One world order!
Sometime the best thing to do IS to do nothing.Things just need to find their own level (and if this means housing drops 15% more then so be it)
there needs to be a much greater acceptance in the US. Acceptance of responsability by individuals for jumping on the property boom and overleveraging; Political acceptance that the US really is in a precarious spot; acceptance that there has to be a huge destruction of perceived asset values over the next few years (which will hurt a lot)
The nation is largely in denial right now; politicans are clearly too frightened to come out with a true picture of the national finances, and many of us don't want to face the reality that we weren't quite as smart as we thunk we was. It's time to grow up America.
Great post.
"Sometime the best thing to do IS to do nothing".
I've been thinking the same thing. Obama should stay on permanent vacation, spread his golf games around. Maybe hike the border with Mexico, a 3 month walkabout with select Senate and House leaders. Stay the hell away from any "lawmaking"/ spending.
Yes, this desire to always "do something" is crazy. Let's stop the house price fixing by the government and let markets do what they are designed to do: set prices.
Good traders understand this from the adage: the best trade is often the one you didn't make!
There is no limit to the amount of stimulus or interference Krugman wants. The Fed could jam 1=10^300 dollars up our asses and he would howl for more "The Federal Reserve is being to tight! They must loosen up!". His whole intellectual defense is the stimulus didn't go far enough, and the wonder of the argument is until the stimulus hits infinity he can use that argument "Everyone knows that 1=10^300 dollars is not enough to stimulate an economy. I would have used 1*10^600 dollars. That would have revived the economy and forced people onto 64 bit operating systems, further fueling economic growth"
Reminds me of the Seach For Extraterrestial Intelligence (SETI) program. They would look for radio signals from aliens, and when they wouldn't find any would claim "We just need more money to buy a bigger telescope".
Precisely! Calling for the Fed to do the same thing over and over again just proves the man is INSANE!
Bruce,
Spot on calls Bro.
Big Dog, was saying on T & V look for 5-6 yrs of the same we have now.......no changes.
NO CHANGES..............
While he's likely correct on the Economic outlook, there will be changes......really BAD one's.
Imagine a program, and many people have been hitting all around this for a couple of years now, called the Primary Residence Program (PRP). A government initiative to help individuals directly, yet hold them ultimately responsible for their individual actions.
Higher education, auto purchases and home ownership are the big ticket essentials many people borrow to acquire. Higher education being the most "vital" as the alternatives are not as practical as they are for autos and housing. An auto purchase could reasonably be done without financing (save first and then buy) with a six year delay in the start of the purchasing cycle. (Given the current conditions a Primary Auto Program might also be implemented, completing the big ticket debt trifecta). Housing can be attained by renting. Higher education loans are completing their move to government direct. K-12 moves to K-16, probably a good thing. That, and a lot of other refinements aside, look at what happens when the PRP gets implemented.
The PRP lends money directly to individuals. The loan is secured by the person's future earnings (human capital) not the house. The IRS is tied into the loan processing and servicing to insure ratios and payments.
A loan will be issued up to say 38% of your AGI so a simple table will layout how much house you can afford given your AGI.
Should a person need to sell and be underwater they take the hit and are issued a gap loan for the difference. That gap loan reduces the ratio available to them and they will need to find a lower priced home on their move, rent or increase their AGI. Yup no jingle mail, no buy and bail, no NINJ loans.
Without going any further into the terms for the individuals and the PRP's detailed implementation you probably get the idea of the general change in the landscape for the individual: A government direct loan for a percentage of their AGI to be used to purchase a home.
Now the financial markets side.
The government issues lets say $xT of loans. Thirty year bonds with a 4.00% coupon. (They may even sell pretty well in today's market.) Individuals get a 30 year mortgage for 4.25%. The quarter point pays for running the system and then some. The mortgage interest deduction goes away for those who participate so as to add to the country's ability to be fiscally responsible.
Most of the bank primary mortgage programs and the RMBS market disappears along with the associated securitization and derivatives markets. Managing creative destruction will likely be a core competency during the great deleveraging.
You've posted this elsewhere. I'm still shaking my head from the last time.
Gentlemen,
Okay, its been posted twice and that is twice to many.
Take a long hard look at the experience of those borrowing for higher education. I've had numerous experiences over the years assisting people with this and the experience with dl.ed.gov is orders of magnitude better than with the banks. That drives part of my proposal.
As for the rest of it, I would love to improve the idea, even if it means coming to the conclusion that it is fatally flawed. The way our country handles mortgages is horrid. Lets work on a better system and then move it into place.
I am somewhat familiar with the concept of unintended circumstances and for me it comes down to poor planning and execution. Unpredictable results are output only from unstable, errant or otherwise flawed systems.
Just one teeny part of your comment:
Think about that for a second. Why the government? Why not anyone make the loan who is concerned about getting THEIR OWN money back with some interest. The government doesn't loan ITS OWN money -- ever. It is MY money they are loaning and I should have the right to retain my own money for whatever I see fit. Your "proposals" are too government -centric.
You need to stop re-posting this insanity on every active thread. You should research the meaning of the phrase "unintended consequences" and look up some historical examples. I would almost suspect that you are a bought-and-paid-for GSE troll.
That $xT you refer to is actually about $6 trillion. This means debt held by the public would go up as all these refi's happen. So debt to GDP would be at 140% and the debt limit of 14b is blown by 6T. That would be toilet city.
There is demand for bonds. But not $6T. If Ben B were to step in and buy that much the lights go out.
Funny thing is, we are already there. We just don't count the debt of the Agencies.
Is consumer mortgage debt based on original loan amount or balance?
I am getting ready to refinance, balance is 65% of original loan amount and am wondering what effect these very low interest rates will have on consumer debt percentages (i am assuming that many others will be doing the same type of refi)
Exactly. So why not help individuals immediately. I think TD may have found a source for some of the $6T on a little ol' island in the Pacific.
how about this instead?
stop thinking more debt is the answer
The debt is already there. This moves what is already there to reasonable terms (30 year at 4.25%) at a low cost (no points) to the borrower, and makes the current lender whole.
so this program you propose would not be encouraging individuals to add any more debt, but simply to restructure the debt they already have?
"restructure" = "somebody takes a haircut"
Who?
What's intrinsically worse about buying Wal-Mart debt, versus buying private mortgage debt?
In both instances, private sector debt ends up on the balance sheet of the Fed.
At least in the instance of Wal-Mart, there is a productive business backing the bonds. In the case of mortgages, there's, in many cases, real estate that is certain to default, with negative value (the note is a liability, not an asset!).
The private sector, the one that actually employs people and generates tax revenue, needs a break here. Think of what the Fed and the government could accomplish, in terms of promoting energy independance, if they drove the cost of financing new energy production down to rates more reminiscent of residential mortgage borrowers.
QE1 has been a smashing success in terms of keeping mortgage rates down and house prices up (if not for QE1, we'd now be in a cash liquidation value situation). A QE2 targetted towards business financing might also do the trick.
QE1 put 1.75t of assets on the fed's BS. We have not even begun to feel the pain that this will cause. You think it was a smash success and want to do more. The debate has been drawn.
I don't think DC should be 95% of the mtg market. But some level of involvement is probably appropriate. This is the government helping the people. That is quite different with the government financing the S&P 500.
I think the history books will show that the dominance of Wall-Mart and the likes of Home Depot was central to the collapse of many aspects to our economy and society. Lending them cheap money so they can buy more goods from China is not a solution to our problems.
How is it that these companies, that charge as little as possible for their products instead of the maximum amount the market will bear, are part of the problem?
I've been thinking that charging as much as the market will bear along with "people" trying to get over on each other and on the system were some of the root causes of our issues.
Your thoughts on this would be appreciated.
Go to 'globalization'. Look at 'free trade'. If you can't spot the planned economy meme then either I'm crazy or you are dumb. It's one or the other.
See? There you go again. Limiting your thinking. Both could be right.
Whistle nonchalantly as you tiptoe past what else the Wal-Marts of the world do!
They also pay their workers so low that they are forced (well, they qualify! you gotta be pretty damn poor to QUALIFY for said benefits) to go on medicaid and food stamps to get by. This externalizes cost of doing business onto state & local govt.
They run small businesses into the ground with price wars (Current targets: your hometown optician and pharmacy). I read with some amusement a recent come-on from K-Mart to signup with their prescription program & get a $25 bonus.** offer void in ARKANSAS and wherever else prohibited by law.
Wal-Mart also is known for negotiating huge tax breaks and infrastructure freebies with local govt's, then picking-up and leaving town to reopen 30 miles down the freeway. They are also known to close stores as an alternative to allowing employees to unionize. Those abandoned megastore buildings will make great homeless shelters.
All-in-all, I consider Wal-Mart to be part of the Too-Big-To-Fail / Too-Big-To-Prosecute cartel, as they repeatedly get busted for race & sex discrimination, unfair work practices, etc, take their wrist-slaps & pay their miniscule fines with a chuckle, and get back to what they do best -- "getting over". If four Waltons in the top 10 U.S. Billionaires isn't a sign of "getting over"; If the spread between what the owners clip in coupons and what they pay their workers isn't "getting over", I'd like to hear your definition of the term.
With all due respect, prophet, look at the whole picture.
In many, many threads on ZH you can see a leit motif of how small business is the true engine of economic growth. OK, let's first square this with the Wal-Marts of the world (in a host of industries, not picking on them individually).
Then you have the old Henry Ford insight, pay the worker enough to buy the product they are creating on the assembly line. Update that for these modern times and how many companies, especially retailers (can't say producers since we produce few tangible products), pay wages that would allow their workers to shop in the stores they work. All rhetorical, the answer is prima facie evident.
My general point here is that we cannot, on a macro level, have it both ways. Laud small businesses as the true engine of sustainable economic growth while ignoring Ford's, for its time fairly revolutionary insight, pay the worker a wage which allows them to purchase the literal fruits if their labor.
Hey, I moved all my money [sic] from Wachovia to a local credit union. Who's with me? Did we give up when the Germans bombed Pearl Harbor?
I think dropping those atomic bombs on Dresden put a stop to that.
Henry Ford didn't have to pay Social Security taxes nor did his workers. He didn't yet have the UAW skimming the workers' pay for dues. And, he didn't have Corporate Average Fuel Economy standards, either.
the chinese have mandated higher fuel economy than us, Japan, all of europe. that as an excuse just doesn't pass the logic test