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Bankrupt Bailout
IBD Editorials ^ | December 10, 2008

Posted on 12/10/2008 5:34:23 PM PST by Kaslin

font size=4>Auto Bailout: As the Big Three get closer to securing billions in aid from Congress, what was once called a "bailout" has turned into a plan to nationalize the car companies. Bankruptcy is still the better idea.


Congress' idea to have a panel of overseers led by a "car czar" for the auto industry is very bad news. Not only will people having no experience in autos control the industry. They'll also be able to reach into taxpayers' pockets to keep the carmakers afloat in the future.

We could have accepted a "prepackaged bankruptcy" in which the automakers negotiate with both creditors and unions to restructure themselves in exchange for a bailout.

It might have included the closure of marginal auto brands and unprofitable plants. And unions would have opened up their gilt-edged contracts for renegotiation, bringing them in line with manufacturing norms around the globe.

But the Democrat-led $15 billion bailout does none of this. It merely replaces the efficiency of market forces and existing bankruptcy law with extensive government control. It also opens up the possibility of a never-ending stream of subsidies to automakers who have steadily lost market share since the early 1970s.

Here's the broad outline of what we believe will essentially be an in-place nationalization of a major American industry:

(Excerpt) Read more at ibdeditorials.com ...


TOPICS: Business/Economy; Editorial
KEYWORDS:

1 posted on 12/10/2008 5:34:24 PM PST by Kaslin
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To: Kaslin
Here's the broad outline of what we believe will essentially be an in-place nationalization of a major American industry:

That's been the plan all along...

L

2 posted on 12/10/2008 5:36:56 PM PST by Lurker ("America is at that awkward stage. " Claire Wolfe, call your office.)
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To: Kaslin

3 posted on 12/10/2008 5:38:01 PM PST by RKV (He who has the guns makes the rules)
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To: Kaslin

The government is basically getting ready to “Conrail/Amtrak” the car companies. Another boondoggle that will bleed tens of millions monthly and will be “too big to fail”.


4 posted on 12/10/2008 5:40:07 PM PST by headstamp 2 (Been here before)
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To: Kaslin

/mark

You should start an IBD ping list.

The articles are always a good read.


5 posted on 12/10/2008 5:42:34 PM PST by KoRn
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To: Kaslin

“The government will name a “car czar” to rule over the industry with “veto power” over any Big Three expenditure over $25 million.”

That’s basically EVERY expenditure which in turn amounts to total government control.

GM will go from being an HMO that builds cars to a Government-run HMO that builds cars.


6 posted on 12/10/2008 5:45:59 PM PST by headstamp 2 (Been here before)
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To: Kaslin

Thankfully, President George W. Bush will veto the 15 Billion Dollar Auto Bailout just like he Vetoed that Trillion Dollar Wall Street Bail Out.


7 posted on 12/10/2008 5:47:20 PM PST by trumandogz (The Democrats are driving us to Socialism at I00 MPH -The GOP is driving us to Socialism at 97.5 MPH)
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To: Kaslin
Gee, does anybody remember Conrail? The taxpayers kept that one afloat for more than 20 years.

- Traveler

8 posted on 12/10/2008 5:47:55 PM PST by Traveler59 (Truth is a journey, not a destination.)
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To: Kaslin
One possible silver lining might be the car models that can be brought back.

How about?.....

the Edsel

the Corvair

the Pinto

the Pacer

9 posted on 12/10/2008 5:58:13 PM PST by NoControllingLegalAuthority ((Barack Obama...stuck on stupid and idle as the world races by him like a bullet train...)
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To: NoControllingLegalAuthority

How about the Aztek? Only now it will be better because it will be built by the government. What a great idea! Just like government cheese is the best cheese, I’m sure government cars will be the best cars.


10 posted on 12/10/2008 6:59:17 PM PST by elmer fudd (Fukoku kyohei)
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To: NoControllingLegalAuthority

I was thinking the new government cars would be more like the Yugo or Trabant.


11 posted on 12/10/2008 7:46:19 PM PST by Pining_4_TX
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