Warren Buffet On Detroit Bailout

OK.  Some may consider this is slightly off topic, but I’ve just got to talk about the Detroit bailout.  Why?  Because the decision to “live fit” extends beyond just the physical into all aspects of our lives.  Experts will tell us that people who are successful are usually successful in most aspects of their lives because they learn discipline.  Once learned, it permeates into many areas.  I’ve already written about this before, discussing the relationship between money and fitness.

The problems going on in Detroit with the Big 3 auto makers are as symptomatic of the ongoing obesity issues in this country as they are the skyrocketing foreclosure rates.  Overindulgence.  In this case, overindulgence of debt.  As consumers, we encouraged U.S. car makers to overindulge in large automobiles that lack fuel efficiency.  They made what we wanted.  But, as manufacturers, they left themselves open to a change in market conditions through a total lack of foresight and planning.  Couple that with their excess of dealerships and crippling union contracts, and they have placed themselves in cash-poor conditions relative to their foreign competitors.  All you have to do is look at the difference in compensation packages between Toyota and GM executives to see how they’re managed.  The salaries of the top ten Toyota executives combined is less than the salary of any one of Detroit’s CEO’s.  Excess.  Now they’re begging for taxpayer money.  I just don’t see how we can give it to them when they have executives flying to Congress on private jets to beg for cash.  They just haven’t learned.  Yet.

Warren Buffet has proposed a great plan to change their perspective.  Here’s a man who understands personal responsibility.  He has suggested that if the taxpayers are going to give the Detroit auto makers cash, their executives should be required to invest a substantial portion of their net worth in their companies.  Their decision-makers only have a small stake in the performance of their companies.  Maybe if they see their cash being wasted when flying around on corporate jets they can’t afford, Detroit’s auto executives will start doing a better job of managing their companies.  Having a vest interest will always yield better oversight.  It would seem that in the current conditions, executives of GM, Ford, and Chrysler are more interested in bleeding these companies, and taxpayers, dry.  That has to change before taxpayers can get on the hook for any more cash.

The U.S. public has created too many problems for itself through overindulgence and wanton consumption for it to continue.  We have to accept the fact that our lifestyles and habits must change or over consumption will bet the death of us.  Let’s stop.