@the same mountainbike: While I agree with you in principle, I also think you have to consider the importance to the country’s manufacturing base that would be lost had the automakers been left to founder. While these are certainly different times than prior to WWII, what would we have done if we didn’t have the engineering might to build our own stuff at that time?
While you could argue that the situation is completely different these days with foreign interests in auto manufacturing watering it down, I still think it would have been an enormous loss for the country to have just let so much of our manufacturing go. A huge loss in jobs, morale, and infrastructure.
Don’t get me started on the finance industry though… some of those guys I could cheerfully see tarred and feathered.
@same my good friend. TARP was approved by the Bush administration, and budgeted to give 700billion to the banks. It was a ONE page request with almost no restrictions. Due to the RECESSION, both the congress and Obama agreed that the already printed deficit monies in principal would be used. The banks had no money to lend ! Instead of bankrupcy which is real bad for the middle class workers during a recession; monies from the TARP funds should be shifted over to the bailout. Both liberals and moderate conservatives agree that an organized bankrupcy would be preferred in GOOD times. During a recession, , life liberty and the pursuit of happiness would be severely disrupted by this action. Therefore, bailout at Wallstreet giveaway expense. The tax payers would foot the bill for the benefit of themselves, which it was, then for the primary benefit of the Wallstreet wealthy. That generally flys in the face of many hard right conservatives who favor preferential treatment to their primary election donors and use Faux News to confuse the issue with Unions vs the taxpayer. Btw, no pea under the shell. Just the fact that bailing out the auto companies was an idea supported by both administrations and the majority if all branches of the govt. including moderate republicans …
The perpetual disagreement between liberals and conservatives is between those who see black and white (conservatives) and those who see greys (liberals). I am neither. I see taupe, merlot, aqua, and aubergine. Get a good night’s rest and take care !
Exactly Kevin.
After reading( trying to ) Einstein ( simple- version ) theory of Relativity, 7 times, only because I could not get to the next chapter without re reading everything; I have decided that everyone can be right from their own POV. You make decisions for the times you are in and everthing else going on and not only the situation you face.
@VDCdriver Thanks for the info. The info you present still does not change the basic premise that some charities waste large amounts of money and their leaders are grossly overpaid. And charity through government channels is always wasteful and often misdirected.
However, if the head of the Sally Ann made a million a year, I would not begrudge him that salary, since the organization is very effective.
Years ago my late father-in-law got tired of being pestered by sollicitors for charities, and did his own investigation, coming to the same conclusion that the Salvation Army was his best choice for giving.
Since “charity begins at home”, you can always start your own community charity like we did and help those in your area. Our overhead is zero and even if we need a truck, many members will lend us one. Some years ago we held a large garage sale with a neighbor over a 3 day weekend. We netted $250 or so each and came to the conclusion we would be better to give the stuff away.
@ Dag.came pretty close to grasping General Relativity (thoght I did anyway){started to see the relation anyway} at one time then it flew out of my grasp.an Einstein I’m not.But according to some sources-GR has a few holes in it(how come we cannot find the anti-gravitron? etc; -Kevin
(had a feeling in my GUT)
I have a theory on charitable donations. The more restricted I am in the amount I have to give, the closer to home I give it. The wealthier can give to larger charities. I want more assurance that the smaller amount I can afford, is better spent.
Mike,the difference is that the other organizations didn’t get into trouble when the economy was nearly in a depression. Things have not been that bad in almost 100 years. GM didn’t do that and couldn’t get credit from anyone anywhere except the federal government. The other companies you mention could have gotten credit from a lot of lenders, except that no would lend to them.
Oblivion, I truly believe that the void in supply would have been readily absorbed by other producers manufacturing automobiles in the U.S., like Honda and Toyota. The demand would not have changed, only the producers’ portions of the supply. I believe it’s a shell game going on. I believe that those who think that allowing GM to suddenly shrink (or even collapse) would have had a negative impact on jobs or on the supplier base aren’t looking at the bigger picture.
Granted, jobs might have moved to a different state, but total production and the total jobs nationwide would have been unaffected.
Re: the finance industry and the tarring and feathering…you’re much more forgiving than I. I had something much worse in mind.
GM didn't do that and couldn't get credit from anyone anywhere except the federal government.
Then they should have filed for Bankruptcy. That’s how a capitalistic system works. If the economy collapses…then companies fail. So what?? That’s how it’s suppose to work.
No company is recession proof. But there are some things that companies can do to ride the storm. I’ve worked for several of those companies. You start by cutting all unnecessary expenditures…then layoffs or cutting salaries. Maybe even selling assets…etc…etc.
By bailing out GM…we’re telling GM that when troubled economy comes along again (which I guarantee you it will)…they don’t have to do the necessary things other companies do to ride the wave.
Sorry…still not buying the justification for bailing out GM. As MB pointed out…with GM going under…other companies would pick up the slack. Thus creating more jobs for the increased demand. And in many cases buying certain factories outright.
GM did file for bankruptcy, didn’t they? They filed for Chapter 11 reorganization on 6/1/2009. That filing was forced when Pres. Obama refused financial aid to GM, forcing both bond holders and the UAW to negotiate settlements.
The president did exactly as you would have done, Mike. You should be proud to be one of his biggest supporters!
GM did file for bankruptcy, didn't they? They filed for Chapter 11 reorganization on 6/1/2009. That filing was forced when Pres. Obama refused financial aid to GM, forcing both bond holders and the UAW to negotiate settlements.
Yes…but they didn’t go bankrupt…instead the US government GAVE them money to get out of bankruptcy. So no more capitalism…We’re now socialists.
@MikeInNh
The US is so undeniably resilient compared to anywhere else on earth, because we are a nation that can’t be pigeon holed by one label or another. We practice “all of the above” all of the time. Democracy, socialism, monarchy , capitalism, dictatorship…You name it.
No, the government ended up owning all the stock. Then it was sold at a later date. I agree all the stock was sold too early, but the current administration apparently didn’t want to wait any longer.
@jtsanders The Canadian goverment took 12% of the stock on the promise that jobs would be retained in Canada. I believe they are ready to unload it as well, but at a loss.
My primary complaint is it promotes irresponsible management by the “too big to fail” firm, believing (rightly or wrongly) that “downside risk” was capped by Uncle Sam. This then makes it even harder for smaller-cap firms to compete on a level playing field, as mid-caps have to operate more cautiously for lack of gov’t support.
I believe that industry hates a vacuum almost as much as nature, and it’s unlikely GM assets would be left to rust. The 5-year difference most likely would have been different name on the front of the check.
I think any bailout should have been tied to a “poison pill” onerous enough to discourage future use. Wholesale dismissal of the management regieme, with full loss of benefits/stock options ought to fit the bill!
So its more important to punish bad managers than to insure an industry survives? Is that what all this is about?
Go back and re-read the posts…It’s about using BILLIONS of dollars of tax payers money to support a company that clearly screwed up. It has NOTHING to do with saving an industry. As MB pointed out and I completely agree…the work would have just moved over to other better run companies. That’s the whole concept behind Capitalism.
The big fear was that 1) The parts industry would fold, since all Japanese manufacturers taking over that market share would source most parts from abroad. 2) Surviving Ford would have a difficult ime by itself supporting a US based parts industry.
My own assessment is that there would be fewer jobs in total, since many of the assets of GM and Chrysler were not up to Toyota standards and located in strong union areas, whereas Japanese manufactururers preferred green field areas further South.
I don’t hink, however, that a Japanese/Korean near-monoply of the US car business would have raised prices. There would still be enough competition.
The strategic value of GM and Chrysler were highy questionable; they had sold off their defense divisions long before that and military technological innovation was not really their forte.