Category: The Economy
Posted by Libby Spencer on Mon, Nov 2, 2009 at 9:53 AMStimulus working: Ford posts third quarter profit - UPDATED
This is good news. Defying dismal expectations, "Ford Motor Co. posted a surprise third quarter profit of nearly $1 billion today -- its first operating profit in nearly two years."
Although sales that were still much lower than before the economic crash of '08, "Ford's third quarter results received a much-needed boost by the federal government's 'cash-for-clunkers' program, and by similar stimulus schemes implemented in other countries."
As I've been saying for a while now, the effects of the recovery spending weren't going to manifest overnight, but this seems to be another sign that it's working.
Update: In response to comments, many experts agree the stimulus spending was a help to turning around the economy. But of course, not all of them. Krugman says it worked like a Keynesian textbook case and the only problem is that it was too small. At the NYT there are four experts with those who don't believe in the Keynesian model declining to credit the recovery spending. Take your pick. Something to support everyone's point of view there.
Comments
| Jump to bottom |
CyberSurvey: Ford profits, UAW contract collide
http://detnews.com/article/20091103/OPINION03/911030375/Howes--Ford-s-$1-billion-profit-signals-turnaround
I suggest you read this article in the DetNews for a different point of view and one that is much closer to reality than c4c or whatever smoke and mirror policy kenyesian economics is.
Fords profitability
Very well said!
Regards,
Fords profitability
Libby Spencer wrote in part "Me, I'm going with the Keynesian model, because it was not using it that got us into this mess, as far as I can tell.
Perhaps you might inform us what *specific* aspect(s) of the Keynesian economic model will improve the economy?
Please show us that you have some basic knowledge of economic theories.
According to your bio, you are old enough to remember the last time the nation attempted to use the Keynesian approach to the economy.
You do remember the "Good 'ol Carter" era don't you? Double digit unemployment, interest rates and inflation.
Looking forward to your response
---------------
"Regarding my posts on economics. I am not going to debate the veracity of the experts I link to."
Libby Spencer 1/27/2009
Fords profitability
Libby, please re-read you headline and original post. Your initial contention was to use FoMoCo's recent profitability as an illustration of benefit coming from the stimulus spending. Now you're trying to "mis-direct" us into the topic of economic growth as a whole, after we have clubbed you original claim to death with facts...
But even your mis-direct is lame as you grasp at staws with the same tired extreme left-wing "sources" as "unbiased experts". Please...
Paul Krugman - everyone who is familiar with Krugman knows that his economic model are driven more political ideology than true economic theory. He is a joke that liberals have been trotting out since Obama got in office to justify invasive policies:
Here for a video of Krugman making an idiot of himself over health care: http://www.youtube.com/watch?v=3EPd2i4Jshs
Here for Krugman saying the first $787B wasn't enough: http://www.huffingtonpost.com/2009/02/17/paul-krugman-stimulus-too_n_167721.html
Here for Krugman as a left-winger on economics: http://newsbusters.org/blogs/julia-seymour/2009/03/31/krugman-garners-newsweek-cover-left-wing-criticism-obamanomics
Here for Krugman's book "Conscience of a Liberal": http://www.amazon.com/Conscience-Liberal-Paul-Krugman/dp/0393060691
NY Times Opinion Blog - this blog states that 650,000 were saved or created thanks to the stimulus. But these are a direct quote of the WH-reported numbers:
"Stimulus saved, created 650,000 jobs, gov't claims"
http://news.yahoo.com/s/ap/20091030/ap_on_bi_ge/us_stimulus_jobs
But we know these WH-reported numbers are likely overstated (for political reasons?) all of these stories seem to report the same thing eh?
"STIMULUS WATCH: Stimulus jobs overstated in report"
http://www.google.com/hostednews/ap/article/ALeqM5jMNoef6xDenBbHWO0Im6rIjDmAgAD9BL1D800
"Stimulus job numbers overstated by thousands"
http://www.post-trib.com/business/1853606,Stimulous-numbers-1101.article
"AP IMPACT: Stimulus jobs overstated by thousands"
http://apnews.myway.com/article/20091029/D9BKOK580.html
"STIMULUS WATCH: Stimulus Jobs Overstated in Report"
http://abcnews.go.com/Business/wireStory?id=8942985
"State budget director: Obama administration overstates stimulus job growth"
http://www.missoulian.com/news/local/article_d4ac590e-c5d5-11de-a3a6-001cc4c002e0.html
Oh, but WH Press Secretary Gibbs claims the adjustment will reduce the number only by a few thousand. Yeah, right...
Even before any corrections, the stimulus has not been very efficent as reported here:
"$160,000 Per Stimulus Job? White House Calls That 'Calculator Abuse'"
http://blogs.abcnews.com/politicalpunch/2009/10/160000-per-stimulus-job-white-house-calls-that-calculator-abuse.html
Time to admit it Libby. The "stimuls package" has not helped significantly with job growth. We've got you cornered with facts...
----------------------
"Yes, you can expect that I'll hold Obama responsible for his own policies." - Libby Spencer, 23-Jan-2009
Maybe it's time to MoveOn to your next post about how the GOP kills puppies or something...
Fords profitability
Me, I'm going with the Keynesian model, because it was not using it that got us into this mess, as far as I can tell.
Which shows that you can't tell much Libby. We practice Keynesianism everyday of every year in this country: government expenditures on infrastructure through deficit spending every day of every year, government taxation of savings every day of every year, the devaluing of the dollar every day of every year, prevailing wage laws to keep incomes high every day of year, incentifying consumption over production every day of every year, and the list goes on. It was Keynesianism that got is in this mess. See, what you don't get is that Keynes gave cover to governments to stick their nose in the economy. Now they are there to such an extent that you can't get them out.
Fords profitability
I suggest that it is BECAUSE Ford DIDN'T sell out to the government that the CONSUMERS, The People, respect Ford and voted their support with their dollars. They will continue to do so to the detriment of Chrysler and GM.
Fords profitability
MT, I just updated the post with a couple of links to several other POVs. Take your pick. There's an opinion among the five essays that will support everybody's position here.
Me, I'm going with the Keynesian model, because it was not using it that got us into this mess, as far as I can tell.
Ford profit means stimulus is working?
Yet MORE evidence Libby doesn't know her rear from a hole in the ground.
Fords profitability
Libby quote: "...still think we have to credit Obama with turning around the decline - even if it's just a little."
All evidence (presented below) to the contrary. But I guess Libby would prefer to ignore economic reality in favor of her continued devotion to Pres. Obama...
------------
"Yes, you can expect that I'll hold Obama responsible for his own policies." - Libby Spencer, 23-Jan-2009
All evidence to the contrary here too...
Fords profitability
There is no empirical proof that Obama, Congress, or any government action is responsible for "turning around the decline". It is just as likely that the economy corrected itself (which is the more likely case).
Fords profitability
Not forever demi, but since the banksters won't help, it seems necessary at the moment to keep the economy rolling. Don't forget we were to a complete meltdown of the world economy in Sept 08. While I don't agree and in fact hate that we gave the banksters the bailout, still think we have to credit Obama with turning around the decline - even if it's just a little.
Actually I should say, I hate that we bailed out banksters and didn't punish them for gaming the system, since I did support the bailout as necessary at the time.
Fords profitability
Not surprised that Libby's shirks responsibility for information she uses in her posts, her president does the same for the effects of his policies. She continues to ignore that her post steals the credit for FoMoCo's success from the hard-working families of Michigan (and other areas) in order to propagandize the Obama administration's failing intervention in the industry.
If she is going to use the article, let's present more than just one sentence from it to get a REAL perspective on the credit Obama truly deserves:
Results based on Ford's own actions:
""The positive outlook reflects the better-than-expected progress on Ford's cost-reduction program, production and inventory discipline that has resulted in solid pricing performance and continued market share gains," the firm said. "Although Fitch expects a weak rebound in industry sales in 2010, in part recognizing the hangover from the 'cash-for-clunkers' program, Fitch expects that cash drains will be materially reduced and comfortably within Ford's liquidity position."
"...the automaker managed to reduce its structural costs by $1 billion in the quarter, thanks to lower manufacturing and engineering expenses due to productivity gains and personnel reduction in North American and Europe."
"In the first nine months of the year, Ford cut its automotive structural costs by $4.6 billion, putting it well ahead of its $4 billion goal."
Effects of Obama Administration Intervention:
"But Ford's turnaround efforts in the United States were dealt a setback over the weekend as members of the United Auto Workers rejected contract changes aimed at matching recent concessions the union gave rivals General Motors Co. and Chrysler Group LLC as part of their government-mandated bankruptcy reorganizations."
"Ford will now be at a disadvantage to its domestic competitors, particularly as it still has billions more in debt on its balance sheet. GM and Chrysler were able to erase most of their debt in bankruptcy court."
Source: Libby's linked article in the DetNews
CG is correct that Ford provides a shining example of a private-sector company taking corrective actions to save itself. Libby continues to try to "spin" this as a win for the Obama administration. Anyone with a rudimentary understanding of business and economics will understand that FoMoCo has been successful IN SPITE of Obama policies, not BECAUSE of them...
Maybe now, Libby will begin to see that the heavy-handed tactics of the Obama administration may ultimately hurt Michigan competitiveness more than helped it...
--------------------
"Yes, you can expect that I'll hold Obama responsible for his own policies." - Libby Spencer, 23-Jan-2009
Fords profitability
Libby,
So you think the government should continue to pay people to buy things?
Fords profitability
Um guys, I know I usually use a different font to make it clearer, but since they were short I didn't do it this time. But those quotation marks around those statements you're so hotly disputing means I'm quoting directly from the DetNews article. If you don't agree, your gripe is with them for writing it, not with me for quoting it.
Fords profitability
2% Libby. Cash for Clunkers accounted for a 2% increase in Fords sales for the third quarter. Normal sales account for 45% of total domestic sales and they went to 47%.
I agree totally with Chris. You've taken a shinning example of how a company sustains itself in a free market, and tried to turn it into an example of government bailouts and handouts.
Shame on you Libby. Shame on you for taking the sacrifices all the Ford employees gave and then giving credit to Obama.
| Jump to top |
