Bailout Follies: Bush Bails out Chrysler when Owners Would Not

Nietzche is Dead ^ | 22 Dec 08 | foutsc

[foutsc]

This is the stupidity that government intervention in markets engenders: Cerberus Capital Management LP, which owns Chrysler, is refusing to put more money into its failing company because competitors Ford and GM are not taking similar measures to save their rotting empires. This is an absurdity, and our tax dollars should have no part of it. Here's a snippet from CBS News:

Congress urged Cerberus to infuse Chrysler with capital earlier this month, but the company rejected the plea, noting that Ford and GM were not being asked to inject more capital into their flailing operations, the Journal reported.

Here's a simple question from a simple man: If the Big Three's own investors are refusing to put more money into their operations, why should the government contemplate putting taxpayer money into it?

http://www.cbsnews.com/stories/2008/12/18/business/main4675171.shtml?tag=topStory;topStoryHeadline

[dashing doofus]

This bailout has me furious. I am tossing simuated shoes at W:

http://www.aksalser.com/game.htm

[skeeter]

This Cerberus things stinks - is this the legacy W wants?

[gorush]

How about this...Bush resigns, effective immediately. Cheney becomes President and appoints Condi Rice as his VP. Cheney resigns and Condi becomes the first black President.

[dashing doofus]

The first black AND female president. Its a stroke of genius!

[EagleUSA]

Bush is just buying legacy. All he is doing is temporarily holding over the union welfare state. Then Obamunism will finish the job with the BIG quid-pro-quo payback.

Our country is broke and the commies are just kicking around the ashes. They don’t care what they rule over — ashes are just fine.

[Mad_Tom_Rackham]

Let them all fail.

[gorush]

DaGman pointed out that the Senate must approve the VP choice.

[skeeter]

It doesn't hurt that some the Bush family buddies sit on Cerberus' board of directors.

I really hate sounding like the nutbars on DU.

[kbennkc]

Too bad McCain lost . Phil Gramm could have fixed everything .

[Retain Mike]

The chief executives of the “Big Three” automakers have repeatedly abased themselves before Congress. They have carefully followed scripting provided for show trials by never mentioning crushing constraints from unsustainable union contract benefits, or CAFÉ standards: none of which impact highly profitable overseas operations. In spite or because of their obsequiousness, the Washington patricians determined to dictate future operations for the car companies.

Such a course directly contradicts the innovative path chosen by Albert Speer to raise German armaments production over three fold from 1941 to July 1944, despite round the clock allied bombing. To quote from Inside the Third Reich, Speer said, “Aside from organizational innovations, things went so well because I applied the methods of democratic economic leadership. The democracies were on principle committed to placing trust in the responsible businessmen as long as that trust was justified. Thus they rewarded initiative, aroused an awareness of mission, and spurred decision-making. Among us, on the other hand, all such elements had long ago been buried. Pressure and coercion kept production going to be sure, but destroyed all spontaneity. I felt it necessary to issue a declaration to the effect that industry was not ‘knowingly lying to us, stealing from us, or otherwise trying to damage our war economy’”.

Now a new Reichstag, while allowing private ownership, will centralize control within federal bureaucracy, thereby stifling initiative and spontaneity.

Government nationalization of private firms feeds addictions to power equivalent to chemical and pornography entrapments. The only beneficiaries are the patricians and private sector allies, who retain power by finding shelter within the debacles they fabricated. These ever more fragile constructs defer a final reckoning effecting everyone.

[clintonh8r]

I share your outrage, but your premise is flawed. Regardless of what the White House, Congress or the MSM say, we’re not bailing out Ford or GM or Cerberus...we’re bailing out the freakin’ UAW!

[Opinionated Blowhard]

Correction: Bush Bails Out Unions

[HonorInPa]

The difference is that Cerberus owns Chrysler (excluding a 20% stake still held my Daimler) as a private investment group. GM and Ford are public companies that can only raise funds by borrowing, selling more stock, or selling assets. They have put assets up for sale - Saturn, SAAB - and I'd imagine most buyers are waiting to see how cheaply they can get them. Issuing stock is not an option as who would be dumb enough to buy shares at a value that brought in much money? Borrowing money is all that is left and that what they are technically doing from the Fed.

Cerberus could inject more of their private capital if they thought it was a sound investment which, it appears, they don't.

All-in-all I still say Chapter 11 is the best option and one that will happen after they fiddle away the $17B.

[dashing doofus]

Mere technicalities..... Let Rove figure something out. Or, give Al Haig a call. He knows how to get around these things.