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Automotive News & Views Do You Favor A Government Loan To The Detroit 3?
3958 messages, Last post on Oct 02, 2009 at 4:52 PM
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
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It is a fundamental business mistake to pump money into a business that has proven to be unprofitable and a money loser. It doesn't matter what caused the failure or who is responsible, you only invest in businesses that are profitable. If Mopar, Ford, & GM fold due to their lack of business expertise, so be it. That formerly coddled union members lose their jobs, so be it. My tax dollars are not there to reward management and union goof balls. The market took a hit today, but remember when it was running around 2,000, a loss of 88 wasn't a worry so why should the hit today be so bad? History tells us the business world has been declining for about two years and that correlates to which political party has been in control of Congress in the meantime? When the Big 3 goes under, it will not be the end of the world.
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Replying to: euphonium (Sep 15, 2008 1:28 pm) But on the other hand, a bailout of the big 2.5, while not the soundest investment, couldn't be worse than bailing out a bunch of banks and their worthless overpaid irresponsible executive management.
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Replying to: fintail (Sep 15, 2008 1:32 pm) As for the banking industry, when they fail, they fail. If you can't handle the doctrine of "Survival of the Fittest" or hard ball business, maybe you are a Socialist in the Peoples Republic of Puget Sound. 
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Replying to: euphonium (Sep 15, 2008 1:49 pm) I will guess insurance industry or maybe property development...
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Replying to: fintail (Sep 15, 2008 1:32 pm) Rules and regulations create a huge impact on businesses. The current Congress hasn't been able to do much of anything because every impartial political observer agrees that the leadership has been ineffective, and some of their actions have actually made things worse. Which might be why their approval rating is below President Bush's rating. (For example, their changes to the student loan program have made banks less willing to make these loans, so the availability of student loans has declined. These changes were supposed to help students by reducing the fees that could be charged by banks. Didn't work out that way.) fintail: If you want to see the true evildoers in the business world, look to the neocon supporting banks and brokerage firms, and the neocon federal reserve and similar treasury etc Then go seek some studies in money and finance. The roots of the present crisis stretch back to the 1990s, when groups such as ACORN began pushing charges of "redlining" against minorities. Among those pushing for a loosening of underwriting standards were former Clinton Administration official Deval Patrick, now governor of Massachusetts. Eventually credit standards were loosened across the industry (for credit cards, car loans, etc.), and the Bush Administration joined in the act (the "ownership society"). This kept the economy going in the wake of the dotcom implosion and 9/11, but it would eventually lead to a credit and housing bubble, which is now bursting. Its roots began before the Bush Administration took power. He continued those policies, and in some cases made them worse, but these aren't "neocon" policies, unless ACORN, Deval Patrick and various liberal interest groups are now neocons. fintail: But on the other hand, a bailout of the big 2.5, while not the soundest investment, couldn't be worse than bailing out a bunch of banks and their worthless overpaid irresponsible executive management. There was no "bailout" as most people understand the term. What happened in the case of Bear Stearns is that the federal government assisted in the takeover of the financial institution and its remaining assets by another insitution. Shareholders still lost everything, and current management was shown the door. This is exactly the role envisioned by the federal government when progressives agitated for the formation of the Federal Reserve Board in the early 1900s. They were concerned that, in the Panic of 1907, J.P. Morgan the MAN (not the institution) stepped forward with his own money to prevent a financial collapse. The Federal Reserve Board was designed to eliminate the reliance on one person for financial stability, and do exactly what it has done in the past few weeks. Whether it will work or not is another matter. For the equivalent to happen in the auto industry, the federal government would basically have to take the assets of GM, fire present management, strip the shareholders of everything, and give what is left to another automobile company to run. Given that Ford is only marginally healthier than GM, and the condition of Chrysler is a mystery (although sales are awful), exactly WHICH domestic company would run GM is a very big question. The government would probably be better off giving GM to Toyota to run, but that would cause a political uproar.
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Replying to: grbeck (Sep 15, 2008 2:46 pm) The "ownership" society is very much embraced by neocons, for corporate profit. Easy credit is the way to obtain this when real incomes are simply not keeping pace No side is free from guilt, but these problems are much deeper than the past 2 years, and have their deepest roots in the Bush regime. The Fed used public funds for guarantees for Bear Stearns, right? That's enough of a bailout for me. Let's see if neocon Bernanke's planned rate cut can save the day. One trick pony.
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Replying to: grbeck (Sep 15, 2008 2:46 pm) Meanwhile, do you favor a loan to the Detroit automakers or a Bear Stearns type of bailout or Chapter 11? Is Sirius XM next?
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Sorry to get off subject, but I never heard the term "neocon" applied to the recent and current bailouts of financial institutions. Neocons alledgedly influenced the Bush Administration to invade Iraq, in the hopes of establishing a democracy that could serve as an example for other countries in the region. Can you name two or three "neocon evildoers." I won't rebut you, and will get back on topic, but as long as you brought this up I'd like to be enlightened.
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Replying to: hpmctorque (Sep 15, 2008 4:55 pm) |
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| We could, but I think this relates to the bailouts, plus I intended to get back on topic after fintail's response. | |
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