“When I see GM find success in other countries, I wonder why they can’t find that same success in the U.S. It’s a shame we can’t buy some of their European models here in the U.S.”
GM had design rules for the US market that made them produce the older generation Malibu and LaCrosse. The Malibu was one of the first cars where the design team was given more leeway, and they produced a winner. GM management was willing to take that chance because of the success of the CTS and they were just plain out of options. Those successes led to other attempts, like the Cruze.
You can buy European models in the US: Buick Regal and Chevy Cruze are based on European cars.
The spending problem is in part due to two wars and also due to the housing price bubble. It’s impossible to know what President Gore would have done if he’d been elected; maybe the same thing (maybe not). It’s probably too early to tell if the Iraq war was worth it and it’s certainly way too early to say if the Afghanistan was was worth it. The last time we spent like this on Defense was during the Reagan years. President Reagan continued to spend on the Cold War as his predecessors did, and even increased the budget. Was the destruction of the Soviet Union worth all the money spent?
As for health care, repealing existing legislation isn’t possible at this time. Even if the Republicans could get enough votes in Congress, they would have a difficult time passing Senate muster. Even if it got through both assemblies, Obama could veto it and there is no way there are enough votes to override the veto. Don’t think that Republicans are of one mind on the issue. Bob Dole has been in favor of universal health care for decades. No, he no longer sits in the Senate, but I can’t believe that he and I are the only Republicans that think universal health care of some sort should exist.
That is right. I would have considered it ‘worth it’ even if the money had not been paid back, as long as it kept the people working. I would prefer to pay for that than an unemployment check any day. That is why I wish people would quit harping and get behind the incentive programs. As long as a program produces something, a bridge, a trail, a museum, whatever, and cost-effectively keeps people working, I am for it.
We couldn’t afford to let our automakers fail. I only saw it mentioned once above (forget who said it), but the US must maintain some form of auto manufacturing, due in part to our ability to meet the needs of our Airmen, Soldiers, Marines and Seamen during times of conflict. Confiscating the automobiles owned by private citizens could only go so far.
I am not saying we should give bailout loans anytime someone asks for them. I am saying the Obama Administration got this one right when they deemed the Detroit Big Three worthy of credit.
Next time, I hope they look at this time as a lesson on how to do it right. I hope they don’t just do it without looking back at times it has worked and times it hasn’t worked.
It made money for the government and it saved American jobs. You can’t say that about all bailouts. Obviously, the Detroit Big Three were worthy of the credit.
I’m NOT saying it didn’t work…It really did…and I’m glad it worked…
I just don’t like the idea on principle. It set’s a president and it now sends a message to any HUGE company…Mis-manage your company any way you want…just keep getting bigger because the bigger you get the more likely it’ll be for the government to bail you out when you fail.
We also don’t know what would have happened if we didn’t bail them out. Would they merge?? Would they get bought out by some other company??..File for chapter 11 and reorganize into a smaller for viable company with better management practices???
First of all I’d like to complement Eraser on an excellent overview of the GM bailout. And everyone else here has also provided thoughtful and knowledgable responses worthy of note. The thread has proven something I’ve said numerous times, that intelligent and educated people can draw diametrically opposed conclusions even when presented with the same data.
Like Mike and some others here, my discomfort isn;t with whether the bailout was successful or not, my discomfort is with the whole concept of using tax dollars to bail out private enterprises. I realize there’s precedent. Way too much precedent. I also realize that this is the first time we’ve gotten an equity share for our money…but I’m uncomfortable with our money even being used in that manner.
I’m no expert in the history of tax law, but something about this just doesn’t seem quite kosher. And I have a pretty good gut. I do know that this was not the purpose for the involkation of federal income taxes. During the Civil War Congress passed the Revenue Act of 1861 which included a tax on personal incomes to help pay war expenses. The tax was repealed ten years later. However, in 1894 Congress enacted a flat rate Federal income tax, which was ruled unconstitutional the following year by the U.S. Supreme Court because it was a direct tax not apportioned according to the population of each state. The 16th amendment, ratified in 1913, removed this objection by allowing the Federal government to tax the income of individuals without regard to the population of each State. But I’m unable to find any clarification on the courts’ interpretations of the amendments or any of the countless subsequent laws and regulations on the use of tax funds. To interpret them would probaly take a team of lawyers years of study anyway.
It just doesn’t seem like a proper use of taxes to me.
It doesn’t seem a proper use of taxes to me, either. However, even though Mike jumped on me (which I really do understand), I still don’t think the US could afford to let it’s car maker fail. This has absolutely nothing to do with free enterprise - which would most assuredly have led them to some other solution, such as detailed by eraser in his well thought out post. It really is a matter of national security. No other industry can produce - and provide - vehicles for use during wartime like GM and Ford. Having only one left would have forced us into a quandary…do we just take that from the American public, or do we let our fighting men and women do without? At what point does it offend you to rely completely on foreign inputs to support the ends our country is fighting for?
I, personally, was offended that the government stepped in and helped them out. But, now that it’s over, I’m glad they did, and it turned out much better than I expected.
Chaissos, you make a good point. If in fact maintenance of a strong and ready military and providing the best for our men and women serving (including my son) were a deciding factor I could support the decision, provided we gained in return ownership of those resources to manufacture the armament. We already own all the design work and manufacturing tooling. Unfortunately, I don’t recall reading that as a factor anywhere.
Wouldn’t the automakers have to retool and reconfigure the assembly lines (partly robotic these days?) to manufacture military vehicles? Or are we worried about a shortage of olive drab pickup trucks and SUVs? Yes, I’ve read up on HMMWVs. Surely we could have separated out AM General from the rest if that’s the issue. The value of the BOG’s stock in GM is still not enough to pay back our “investment.”
"It just doesn’t seem like a proper use of taxes to me."
So what are the proper uses of taxes ? The maintenance of industries that make cars in peace and military vehicles in wartime seems plenty appropriate. Regardless of who officially makes many military vehicles, motors transmissions and other parts and expertise come from the big three many times. Even for a strict conservative or libertarian, providing for the our national defense requires we maintain these industries, regardless of their peacetime malfeasance. These are workers like you and I who are loosing jobs to mismanagement and not through their own negligence and provide parts and service for military hardware, directly and indirectly.
When I was in the service, I didn’t drive, shoot, wear or fly one item that wasn’t manufactured by private industry. So what are the proper uses of taxes if this is not ? Next we let Boeing go under then wonder where we subcontract our fighters and tankers etc…China maybe ?
These industries as a much part of our national defense as EDUCATION is and anyone who doesn’t get it, plays politics with the times and those who do get it. Even if the bail out isn’t/wasn’t successful, we just have to find a better way that still may require more tax payer money. We just have to “git er dun”.
Yep, there comes a time when you have to be pragmatic not ideological for the good of the people. Money is collected as taxes to promote the general welfare of the people. Sometimes that means loaning money to a business. There is no reason we shouldn’t do that when the alternative is economic havoc.
Chaissos, you didn’t do the set up. The joke is "Knock knock. Who’s there? Vietnam vet. Vietnam vet who?
You weren’t there, man! You don’t know!"
It’s still a bad, and yes, probably unconstitutional “investment”.
@Bing: "Money is collected as taxes to promote the general welfare of the
people. Sometimes that means loaning money to a business. There is no
reason we shouldn’t do that when the alternative is economic havoc."
Archer Daniels Midland seems to be doing okay. The entertainment industry seems to be doing okay. Exxon Mobil continues. Perhaps there were/are systemic problems in the auto industry that will come back to bite us (as part owners). Whether they included:
Excessive benefits packages for union workers
Poorly managed and maintained pension plans
GMAC
is left as an exercise for the reader.
What happens when we go to war with China and our supply of cheap computers and parts is cut off? Ooops!