If cars don’t sell, dealerships are in trouble. If dealerships get into trouble, they won’t buy more cars coming off the assembly line. Hence manufacturers will stop making cars and there will be even more layoffs. And the layoffs will ripple through the value chain. The suppliers to the auto makers will cut back and layoff employees so more houses will then go into default because mortgages can’t be paid. Cars will be repossessed as car payments will be missed and these cars will come onto the market at a deep discount furthering the car sale issues and the cycle will continue to spiral down. We have been grinding to a halt: No credit and liquidity in the market; no consumer purchases; no more credits cards being issued; no more retail sales; and on and on.
In regards to tonight’s debate, the scary thing is that the only candidate with any true small business management experience is Sarah Palin. She ran a fishing-based company with her husband and she drove a budget for a state. If it is all about the economy now, I always worry about electing politicians that have never really worked in industry or started a company or made a payroll. Let us hope each candidate has smart people surrounding them in these matters. I almost wish that each candidate was forced to introduce the teams that would support them post election so we could meet who would really be running the country and the economy on the go forward.
These problems are deep, systemic and complex. They aren’t handled via sound bite, quip or political showboating. My bet is that most of the politicians voting on these mega bills don’t know the difference between an income statement and a balance sheet; about synthetics and derivatives; short selling; mark to market; and all of the arcane financial instruments that got us into the mess we face today.
When we have real issues with autos; credit cards; mortgages; gas prices and availability; and healthcare costs, how can we ever say our issues are about Wall Street and not Main Street?
