Posted on 12/04/2008 12:46:12 AM PST by Thorin
The govt takeover is almost complete. Your belief is incorrect as to how that is done.
There are two models, the NAZI model amd FDR really liked this model. And the one most are aware of the communist model.
Once someone learns the two models a better understanding is reached.
Besides, bailing out a company so pain isn’t experienced is bad policy and based on protecting people from experiencing the consquences for their actions.
The unions have sucked the life out of their host. The blood sucking leaches now get to reap the harvest they have sown.
Who are you to protect them from their bad behaviour?
You are the one being emotional by wanting to protect people from pain for their bad behaviour.
How can you on one hand want to privatize Fannie and Freddie and nationalize the failing auto industry.
Absolutely correct.
Great post proving the “let them eat cake” position that so many conservatives hold is terribly simple minded.
“Who are you to protect them from their bad behaviour?”
No one wants to reward them for their bad behavior, but it is necessary to do so in spite of this. In the past couple of years they have displayed better behavior, renegotiated Union contracts, and are retooling, then the economy tanked.
Now, if you want a Great Depression, then you would leave all the banks fail, starting with CitiGroup. Then there would be a total collapse in the world financial markets as major banks toppled into bankruptcy. During the Great Depression, the gov’t did nothing, and it resulted in, obviously, the Great Depression. Depends on what you want for your society, a total collapse of not only our economy but the world economy also, as when we sneeze the world catches a cold, or an attempt to take certain steps as a gov’t to try to mitigate a total disaster by turning it into only a mini disaster. Choose your poison.
The article is BS on so many levels. Suspend principles in a crisis ? Yeah, there’s a conservative response...we’re all Democrats now !
So if the Big 3 are in a crisis - get the unions to bring the new rules forward...now. Cut down the pension obligations and healthcare obligations to standards used by other car companies and industries. Fire the folks who won’t take a cut in pay and benefits. Get rid of lines that don’t make a profit. Shut down dealerships that are not making a profit.
The automakers can do all this right now, or they threaten to go out of business. The unions will go along or be out of work - their choice.
Bring the prices of autos down to competitive or below levels with Honda/Toyota and people will still buy them, especially if the steps are in place to conserve cash.
We don’t need socialism - never did, never will. Any bailout will just allow the companies to continue their unprofitable practices. The steel companies went thru all this decades ago - time for the automakers to follow along.
Not to mention - all the automakers must cut down on their lines/vehicles, as the market now and for the next few years won’t support their current rate of output.
They must cut back in any case.
I appreciate your patriotism.
“The truth is the American automobile industry has been in decline for 30 years. They have consistently lost more than they made. The Chrysler bailout sent the wrong message and now the situation is 100 time worse.”
That wrong message was 30 years ago, and solved the problem then didn’t it. Chrysler merrily survived for 30 years after the loan and paid it back with interest. Also, you do not address the national security interests of allowing our major suppliers of military vehicles to go under, when it is those very manufacturing industries that retool in times of war to produce the vehicular equipment we need to fight that war.
“I appreciate your patriotism.”
Thanks, one voice of appreciation. I’ve been fighting the good fight all nite and morning, and now I am tired. The libertarians were after me bigtime, lol!
You might also appreciate this article: http://www.takimag.com/blogs/article/whats_good_for_general_motors_is_still_good_for_america/
Any bailout given to the automakers, financial industry, etc. should be predicated FIRST on all company executives foregoing any bonus or incentive compensation until all loans are paid back in full, with their base salary limited to the same annual adjustments they give to the rank and file.
Lets see, they declined from about 75% of the mkt in 1992 to 45% of the mkt today.
Let's protect a bureaucratic unionized dinosaur, that will really get them to make the changes necessary to survive.
True, but they don't respect money enough to realize what they have started won't stop just because they say so.
Nobody in their right mind is saying just close their doors and go out of business. If they want to survive they are going to have to do a bunch of things that can't get done without a managed chptr 11 bankruptcy.
They need to cut 50% of their dealerships.
They need to end their retiree programs.
They need to end their "job bank".
They need to pay labor 25-33% less.
They need to cut their management in half.
They need to eliminate half their models.
They won't do any of this if they don't face the possibility of extinction.
Are you familiar with the economic application of the term "moral hazard"?
The problem is that there are long-term commitments that GM has that must be shed to go forward. It would be very difficult to shed them outside of bankruptcy court.
As an example, one problem for GM is that it has too many dealerships. As noted, getting rid of Oldsmobile led to protracted, multi-year, expensive litigation with shuttered dealerships.
In bankruptcy court, all the dealership contracts become disposable. GM can keep the dealers it needs and shed the rest. Outside of bankruptcy court, it’s just not possible.
It is possible that Congress could try to structure a bailout that would give GM the legal ability to do many of the things it could do in bankruptcy court, in which case, GM could go through a bankruptcy without calling it bankruptcy. Perhaps some folks would be warmed by the fig leaf.
The problem with this is that I’m not really sure that Congress could constitutionally give GM all the tools it would need, as the consequences for many of GM’s business partners would be extremely adverse, and I suppose that they could sue, calling the legislation a “bill of attainder,” or something like that. Just the very fact that they could sue could tie things up for years, whereas in bankruptcy court, all the processes are well-known and judicially-tested.
It would be nice if there were a way to effectively do a bankruptcy through “bailout legislation,” but I’m afraid that there are certain relationships with business partners that MUST BE ABROGATED OR SERIOUSLY MODIFIED that would take bankruptcy court to do.
No, what's that?
A course of action you pursue produces behavior and results that were not intended, or opposite of what you wanted.
In the case of the Big 3 by opening up the checkbook of the govt to them a dependent relationship will be established, when the original idea was to make them self sufficient. The idea that the monies being discussed are a "loan" and "one time event" just don't add up. The legacy costs (contractual benefits to workers and retirees) is only one part of the problem. They also have mgmt and bueracracy that is killing them. In addition to these problems they have to many models and dealerships.
A govt bailout does not get them to address these problems it only pushes their extinction date back. If we want a strong native auto manufacturing base in this country they have to be turned upside down.
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