Bailing out an inefficiently run company just because we need the jobs they provide is not going make them change practices. Remember what AEG did when they got their bailout money? A multi-million dollar, multi-country bender of a party for the top exec?s. Ouch.
It?s our money, give us armchair quarterbacks a chance; we certainly couldn?t do worse!
They need the money, and in such a quantity to gain a say in running the company, so let?s do it. There are many top-notch exec?s available who have not been indoctrinated in the culture of the absurd who have the skills to make these companies work, efficiently and for us.
Give them a chance, but on our terms.
Is There A Question Besides, “Remember what AEG did when they got their bailout money?”
probably not as easy as you think.(a world of logistics)
most guys that watch football ,truley belive they could play the NFL,well I hate to say it,but MAYBE 2% actually could.
cheerio!
It’s AIG.
Our tax dollars have no business invested in the private marketplace and our elected officials and government employees have no business trying to run companies. That is not the purpose of taxation or the function of government.
I disagree with the assumption that there are many top-notch execs that could turn the companys around. At the core of the problems is that these companys have been being run by accountants with no intrinsic passion for the product. Lee Iaccoa turned Chrysler around because he was, first and foremost, a “car guy”, who loved great car designs and also had a flair for promotion and in insider’s knowledge of the inner workings of the industry. I see no Lee Iacoccas out there right now.
Remember, Cerabus thought they could turn Chrysler around and make tons of money.
Good Insight!
I totally agree with you that … “Our tax dollars have no business invested in the private marketplace and our elected officials and government employees have no business trying to run companies. That is not the purpose of taxation or the function of government.”
Quite a few people have forgotten that taxes are to maintain a military to defend our country from attack, maintain a judicial system, and maintain national monuments. Some people seem to want it to do more and more with more and more taxes.
Thanks. For the record, I disagreed with the government backing for the Chrysler loans, even though Lee performed a miracle with them.
I read today that the the housing industry is lining up for a handout too. We’ve started down a long, slippery slope. Wait 'til January when the retail figures are in. They’ll be in line with their hands out too.
I believe we are seeing proof here that while pure socialism does not work, unbridled capitalism does not work either in a modern state. In both cases, human nature, revealed by greed, sloth and various other undesirable traits, will sink the system. Michael Douglas uttered the infamous remark; “Greed is great!”
The great depression proved that business needs very firm guidelines and rules. When so-called businessmen start gambling with other people’s money, they are neither business-like nor honest. I thought the Enron fiasco would have taught us something.
If war is too important to be left to the generals, then the market place is too important to be left to pure “marketers”. China is now also experiencing this first hand; “to be rich is glorious” is often achieved at the expense of public health, the environment, and the country’s international reputation.
However the purpose of laws and regulations is to protect the vulnerable from the predators. This situation is the predators and the greedy having brought on their own difficulties.
I contend that laws, regulations, and tax dollars are not there to protect poorly run businesses from failure.
I’m somewhat of a constitutionalist.
Mountainbike; I can’t argue that. The problem is that many very large businesses don’t seem to care about their shareholders, employees or the public.
So, transparency is needed to protect the shareholders, safety and environmental laws are needed to protect the public, and the employees get social security when the compaony fails. If the employees are as greedy as the owners, and the company fails, they deserve no more than any other employee left jobless.
So,I agree wth you that this is not a legal or even a moral issue, but one of keeping the whole economy on an even keel. I therefore support a forced restructuring of the Detroit 3, and no more. It would be a good gesture if the three presidents offered to work for $1 per year as a start.
The AIG chief executive was fired. Are you happy now? BTW, he refused the $22M golden parachute.
I would like to see some more long term vision in our corporations. As it is there is a lot of incentive for the CEO and other top executives to work for the short term goals of the company. Long term goals are not a priority of a CEO who will be retiring or moving on to a different company in the next two years and who’s retirement will be based on the last years profit.
Decisions are made to increase the current year’s profit rather than the long term 10-20 year profit. Why would a CEO or other executive worry about the long term, under today’s system.
Why not make the CEO’s payment dependent on not only today’s profit, but the profit that the company will make during the next 5 or 10 years?
In a private company the owner is concerned about next year and the years later when his children may be owning the company. We need to build an incentive for CEOs to worry about the future.
As is with most news, the media keeps repeating the most simple and dramatic video with commentary to fit the agenda of each network. The convoluted tale of insider hedge funds and futures markets and manipulation of SEC and FDIC controls is likely much deeper and costlier than we are told. It seems those of both parties wish to keep us in the dark regarding many $pecific$… Capital Default Swaps is a rarely mentioned but apparently large part of the collapse… Or so it seems to a greasy redneck.
The basic problem was and is risky real estate loans (sub-prime loans). The capital default swaps were insurance for companies that were overweight in sub-prime loans. The companies that insured the sub-prime lenders did not adequately calculate the cost or magnitude of the defaults. Sure, it’s further up the food chain, but the same basic problems led them to the same unhappy conclusion.
If default swaps were only used as insurance, it would have been less of a problem. Unfortunately defaults swaps were used by a number of companies as pure speculation. They weren’t using them to counterweight loans, they simply wanted to make money off of them. The amount of default swaps at one point far exceeded that amount of debt that they were supposed to back.
My recollection is somewhat dulled with time, but I recall warnings re CDSs last year. The stories alluded to CDS contracts written and traded as pure speculation and although un-regulated, and, i.e.,undocumented, estimated the total liability was far in excess of the GDP.
It amazes me that M Stewart was tarred and feathered for her ‘insider trading’ while speculators were playing pin-ball with the markets and cashing in their scores with the TILT light taped over.
“If default swaps were only used as insurance, it would have been less of a problem. Unfortunately defaults swaps were used by a number of companies as pure speculation.”
Are you saying that there was (is) a market for capital default swaps, or something else?
Martha appears to have participated in something the SEC understands. No one understands CDSs very well, including (especially) those who underwrote them. Why would the SEC get after CDS traders if they had little idea what they were? Also, Congress has to make them illegal before the SEC can do more that say “who would buy that crazy stuff?”.
How did we find such myopic dim-wits to watch out for us, jts?
Or possibly our representatives were very astute with their personal finances and just overlooked the current calamity as they kept count of their growing bounty.
You voted for them, Rod. It’s all your fault.
More importantly, intelligence is not required for elective office. Making people feel good about themselves seems to be the main qualifier.
NO company works for us, they ALL work for profit. The bail-out is pure socialism, and although something needs to be done, a bail-out is not it. Not to mention the fact that it wasn’t even thought out. The following is a quote from Forbes;
In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.
“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”
We just wanted to choose a really large number? Our government has no idea what they are doing! We are supposed to trust these people with 700 billion dollars?!?