Alternate Views

Why does the American Auto companies suffer so? Many would have you believe it to be Shakespearian opera—Play with Vocals. The fact is that the Sector sells Millions of Cars, provides Maintenance to vast Millions more; churning a vast level of Service and Product. The level of business is huge, even in the midst of Depression where We most definitely are not! The Reader should understand that all of the Auto industry’s problems are Internal, not External; there being no real loss of Consumption, only Mismanagement. There is excessive Plant, there are excessive Pay Scales at all levels, and there are excessive numbers of various Vehicle Types. The Solution resides in Bankruptcy Court, but only if these Courts induce a realignment of the bad Management by elimination of previous Management. Vast amounts had been spent where it should not have been spent, and old Management would have Us continue the practice while taking over the financial supply quandary. They are falling off a cliff, and telling Us that We could make it a easy landing, but adding Weight to it.

This article assumes that the only way to get Credit Cards to Consumers is to charge high rates of Interest. Good, great, and totally untrue! Alternate Plan: adopt the same venue as Car Insurance companies. Make the Cards good for only Six Months at a Time, all carrying a standard rate of Interest of 1% per month, to a maximum of 12% per year–slightly lower than the 1% per month overall. Good practice without Usury, and high Production levels of Cards; all without prime high Cost to Credit Card companies. Catch 22: All Credit Cards are to be Sold only through Banks, with Charge based upon Cost of Card plus Risk premium associated with the Cardholder Credit rating. Banks have another source of funding through sale of the Cards for the Credit agencies, whose liability is limited by Time and Initial Charge, and Consumers get new Cards which are not broken, shattered, or smeared to obstruct going through the accreditation machines. The Interest rate set in Stone for Credit Cards, then Congress and Credit Card companies can argue about the Card acquisition fees, really about the largesse of those Fees. The Cards will not work in those machines beyond the Time Period subscribed, the Fees will give Card applicants pause in Spending practice, a decent rate of Interest will be integral, and Everyone get screwed except Congress. lgl