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- - Save GM (https://www.lateral-g.net/forums/showthread.php?t=17513)

Quote:

Originally Posted by Tony_SS (Post 179623)

Please, enlighten us then, because I'd love to know just how creating 7 trillion out of thin air is good for our financial system and the value of our currency. Take a look at how the little beta test turned out in Iceland and then tell me how a private financial system, like the Federal Reserve, isn't in control of/or in cahoots with our government to loot out this entire country.

But sure, go ahead and kick GM to the curb and let them dwindle to nothing until they are forced to go under, while one of the international banks that was injected with bailout money, like Citigroup Inc, invests in China so they can buy GM up for pennies on the dollar.

Sorry if that sounded offensive. I didn't mean to imply I know everything and everyone here does not. But with the multiple complaints I have read about comparing the Big 3 bailout to the banks', it was obvious to me most do not get it. Hell, some of the smartest economists in our country don't get it either!

Our currency? That has been in the ****ter since well before this meltdown started, and we have established that we (our govt) are not willing or planning to defend the dollar. The dollar is another non-priority right now IMO.
Again, bigger issues at hand. This economy is so unstable right now and many do not know how close we have come to total financial collapse in recent months. It's very scary and real.

Quote:

Originally Posted by XcYZ (Post 179625)

This is what really burns me... How many billions have we given to Citi now? How many are they going to lay off? And they're STILL going to spend nearly a half billion on naming rights to a stupid baseball field? It's incredibly sickening.

If it was $400M all right now, yeah I would agree that is ridiculous. But spread over 20 years @ 20M per, that is a pittance compared to all other numbers at hand.

But still, I hear ya....

I just want to take a moment to say that this thread has been remarkably positive and you guys have done a great job on debating the issue without it going downhill. I think that's a product of people on one side having respect for the other side.

Quote:

Originally Posted by XcYZ (Post 179638)

Couldn't agree more, Scott. This is a highly contentious issue and it affects a lot of people, some right down to their paychecks.

Quote:

Originally Posted by Flash68 (Post 179633)

So let me see if I get it.. a private global institution like the Federal Reserve gets to hand out funds to the private global banks like Citigroup Inc while allowing, smaller national private institutions/banks to fail thus facilitating the consolidation of wealth and power that's all funded by the American taxpayer.

But GM's the bad guy, them and their suits and private planes.

Quote:

Originally Posted by Tony_SS (Post 179643)

Okay, what are you really saying? Do not bail out the banks/AIG?

You have to save the big players (or at least most of them) so a nasty ripple does not rip through the banking system and cause a catastrophic breakdown. Smaller banks can be allowed to fail and that will not adversely affect the overall system. I didn't say I like it.

Who said GM is the bad guy? Not me...

Quote:

Originally Posted by murtah (Post 179595)

Fail? No. Undergo a govt managed bankruptcy? Yes. We cannot allow a huge part of our domestic manufacturing base to collapse, nor can the population and pols tolerate it being sucked up by a foreign firm.

Many members of this forum seem to think Chapter 11 means they disappear and that is simply not true. The core suppliers and dealer network will remain if it is a managed bankruptcy.

The benefits of undergoing a managed chapter 11 have already been listed in previous posts. Managed means the govt gives the companies and their associated suppliers/ dealers federal guarantees of credit (just like fannie and freddie mae/mac) while allowing federal bankruptcy judges to oversee their restructuring.
The down side and upside of restructuring has also been stated in previous posts. People face it: this problem has 2 possible outcomes.

1. The govt loans them money WITH a wall street type set of stipulations. Those stipulations will be heavily laced with POLITICAL manipulation and agendas. The one most Americans (especially gearheads) will take issue is the sub cabinet level auto czar that will oversee the federal/legislative mandated restructuring. There are many powerful interest groups who hate the internal combustion engine and will seek to influence our govt as they (politicians) go about mandating to the domestic manufacturers the type of cars they will produce. Can you say small, green and cute? Geo metro anyone?
The problem with this option is that they will have spent billions of taxpayer dollars getting lean, mean and cute n green, but Americans still won't want to buy the line up that the federal govt said they must build. Think I'm wrong? Think the pols will give a big loan to an industry that 30% of their political constituents loathe without telling them exactly what they will do with it? The extreme wing of the green movt has a lot of lawyers and lobbyists.

2. The companies go into managed chapter 11 under the purview of federal bankruptcy judges. The govt provides loans/ guarantees to the companies along with suppliers and dealers.

The companies emerge lean n mean (white and blue collar) without federal mandates on the exact type of car they have to build and the companies took a near fatal measure of pain for their hubris and poor decisions.
I would rather trust my tax dollars and the future of domestic manufacturing to a group of bi-partisan bankruptcy courts than an executive/legislative cabinet appointee any day.

The bottom line is that the govt has to round off the sharp edges of a private sector failure, not catch the whole thing less it end up taking one of those edges through the chest. There is famous quote from the savings and loan meltdown of the 1980s: “Capitalism without bankruptcy is like religion without hell”.

Exactly! Think the regulations are bad now...Can you name any industry that is so regulated by the Government BEFORE the product even comes out?

Although I believe it was Ronald Regan who said the worst thing one can hear is "Hello, We're from the Government and are here to help"

Darren

Quote:

Originally Posted by XcYZ (Post 179638)

Respecting people even when they vigorously disagree with us ... priceless. :thumbsup:

Seriously.

Bankruptcy worked for the Airlines because they don't sell a PRODUCT. All you're buying is a ride on an airplane. There's no warranty or part longevity to worry about. History has typically shown a severe decline in sales for any product company that files for bankruptcy. It'll just motivate more people to buy foreign cars. Plus there's the issue of all the parts suppliers who would not get paid for their services under a managed bankruptcy, putting further stress on the manufacturing sector and the economy in general.

Bailout Loan with conditions is the only way to go. Bankruptcy is not the "get out of jail free" card that some think it is.

Quote:

Originally Posted by Flash68 (Post 179575)

Do you guys understand the ramifications of too many large banks/insurance/financials being allowed to fail? I don't think you do. It is paramount to keep the financial system intact. Things are very bad, but we are lucky they are not worse than they are!

That is exactly why we are in this position in the first place. As long as there are people that think their industry is more vital than the others, we will have bailouts. Let's get this straight, there are TONS of local and smaller banks that are doing fine if not outstanding because they did not and do not shell out cash for high risk investments.
So like the automakers, if some large banking institutions go under or downsize, there will be others to step into their places, and maybe, just maybe do it right.

About 8 weeks ago, Bush came out pleading and begging to get that 700billion bailout out passed. Yet they haven't written IOU's for all of that yet and they are not even using it for what they begged for in the first place.
The sky still hasn't fallen and the stock market still tanked. What exactly has any of the bailouts accomplished? We are all suckers and when these companies sink, and come to the fed to cash in that guarentee, the dollar will all but disappear and we will be far worse off, than dealing with the pain of losing some very large businesses.

The only thing the government should be doing is relaxing manufacturing regulations to bring back those business and jobs to the US while increasing tariffs on imports especially from countries that ban importing US goods.

Quote:

Originally Posted by trapin (Post 179724)

What exactly will 25 billion spread to threee huge manufacturers do? They are losing how many billions every quarter?
And yet you keep going back to eveyones comoplaint about GM's longevity, so a bailout right now, WILL SOLVE NOTHING. They can't rid themselves of the unions or CEO's. So now what? Chrysler anyone?