I think this is still beating a dead horse--regardless of the numbers, this was a political AND a diplomatic necessity for American prestige.
The world's only superpower cannot just sit there and let 2 of its 3 major automakers (who makes military vehicles by the way) go down the drain, or worse, be bought up at bargain prices by China and Malaysia and Japan.
Remember when the UK had an automobile industry? Remember how low they sunk in the world's self-esteem afterwards? Jaguar! Rolls Royce! Bentley! Lotus! MG!
Now owned by foreigners.
What president in his right mind would want to preside over THAT?
Bankruptcy is the ultimate and finest goal in the USA.
Unfortunately due to the unfunded and underfunded pension, healthcare, welfare, food stamp, and other social service obligations, that is pretty much where every local municipality, county, and state government is headed.
Oh, and the US govt HAS to pay interest on $17 trillion. What happens as the interest rates go up?
Not just that, but bailouts and subsidies are the playing field of the 21st century. You play along, or die - as your competitors are all receiving some kind of similar benefits. The D2 also needs to seek better managers, but that alone won't do it.
Just think if the money pissed away on the war machine and on aid to ungrateful nations was used to help domestic industry. It's kind of what the competition is able to do, as the US provides virtually free protection due to the ego of the military-industrial monster.
Well yes of course, meaning that any president in his right mind would have bailed GM or Chrysler unless....UNLESS...there were some way out of it that would have mollified the majority of the American people.
You know, when Packard or Hudson or Studebaker went belly up, the consequences for the economy were basically local, and these were not part of American prestige or manufacturing power in the 1950s and 60s.
But General Motors---Detroit---The Corvette---this would be like selling the Statue of Liberty back to France......say, that gives me an idea..... :P
What's the difference between a dollar that has Zero value .vs. not having a dollar at all?
I don't think they're the same. By printing money they just dilute the value of the currency to cover the debt. But the dollar still has value, just not as much.
The Eisenhower administration decided that Studebaker-Packard couldn't (shouldn't?) go out of business and sent government business their way, and also meddled in the Curtiss-Wright management S-P got in the days after Packard Detroit went away.
Of course, the dealer network was national and there were implications outside of Detroit and South Bend there, both post-Packard and post-Studebaker, although a fair number of Packard-only dealers then were signed up to sell Edsel.
2024 Chevrolet Corvette Stingray 2LT; 2019 Chevrolet Equinox LT; 2015 Chevrolet Cruze LS
There was a butcher shop right next to my parent's house back in the day. The same guy ran the shop until her passed away at age 86 in 1992. He made the best kielbasa anywhere. Philadelphia still has an abundance of small mom and pop stores. Lots of neighborhoods lack a supermarket. To get to one requires a lot of bus tokens and transfers from some places.
Those Mom and pop stores are still probably pretty viable in big cities, where real estate is too valuable to put up something that would take up a lot of space like a WalMart. And, out in really rural areas, where the population is really spread-out, they probably work as well. When I go down to my Mom and stepdad's house in Southern Maryland, sometimes I'll take the back roads for a change of pace, and they're still scattered about.
And, I have a friend who lives in DC. There are three Mom & Pop stores just on his street, within perhaps a 1000 foot walk. And I'm sure that if you go over to the next street, either way, there are probably more.
Yes, but for pennies on the dollar of what we actually spent propping up a failed GM, we could have had the Ford Corvette, the Tesla Volt, and so on and so forth. If Ford didn't buy Corvette someone else would have (and not necessarily a foreign company).
It wasn't an industry going under, just GM and Chrysler, let's be real. Yes, Ford would have been affected and hence why a few pennies on the dollar of the bailout might have been wise to keep the unfailing companies afloat from the collateral damage (suppliers, Ford).
Bush could have been the President to let GM and Chrysler go under, but he was a coward. He didn't bail them out enough to keep them alive long though, just enough to make Obama do it.
We could have new company startups like Obama motors (oh wait, that's GM), Romney motors, Bill Gates motors, Buffet motors, and others.
'18 Porsche Macan Turbo, '16 Audi TTS, Wife's '19 VW Tiguan SEL 4-Motion
I don't think they're the same. By printing money they just dilute the value of the currency to cover the debt. But the dollar still has value, just not as much.
I guess my point was that both examples approximate the same conclusion.
Ask anyone still alive that experienced the hyper inflation in pre WWII Germany, where it took wheelbarrows of currency to buy a single loaf of bread, and I'd bet they would tell you there really wasn't much difference. When one doesn't have the capability of carrying sufficient funds on one's person to buy the most basic of needs, then the currency has reached a de facto "nothing" in value.
NYC, the only way to live in Manhattan is to be a financial sector criminal, a trust funder, live 10 to an apartment, or to hold gobs of illicitly acquired foreign wealth and buy your way in. A theme park indeed.
Ruin porn is a real thing, Detroit could do it - just be sure to armor plate the tour buses.
Anti-bailout when it comes to the FIRE cabal, maybe. I suspect most Americans are also against the wars and foreign aid black holes the US has embraced over the past 60 years. The average voter really has no say, when both sides ultimately bow to the same interests.
Even after the bailout, where the proponents say they were wildly successful, you have about 55% to 61% directly opposed, even after the fact we all still think it was a bad idea.
Even the very selfish Midwest had a majority 53% against the bailouts of the Big 3.
I'm getting older, but my memory isn't that bad yet, was easy Google search to find these.
What Bush, Congress, Senate, and Obama did with the bailouts was nothing short of a:
coup d'é•tat (ˌku deɪˈtɑ)
n., pl. coups d'é•tat (ˌku deɪˈtɑz, -ˈtɑ) a sudden and decisive action in politics, esp. one resulting in a change of government illegally or by force.
'18 Porsche Macan Turbo, '16 Audi TTS, Wife's '19 VW Tiguan SEL 4-Motion
You know, you were doing great with your citations until you added the coup d'etat business. Not a good idea to go hyperbolic on this subject.
But ANYWAY---all the polls proved (and polls are polls, polls are not facts, remember!) is that the majority of the people polled were, in fact, wrong---as the majority sometimes is.
The bailouts most certainly helped the economy---this seems to be no longer in question IMO.
The problem with supporting my view is that I can't show you what would have happened in the other scenario other than to point to the general economic downslide of the "Rust Belt" in historical perspective.
Also you have to put all this into context of the TIME in which it happened. The US economy was in free-fall. It was in a death spiral.
I think immediate decisive action was absolutely necessary.
Today, in July 2013, given the better state of the economy, I might agree with you on no bail-outs. But back then, I think it was unavoidable.
The bailouts most certainly helped the economy---this seems to be no longer in question IMO.
There's really no way to run the comparison to see how the economy might have been helped by the alternative decision.
Also, the bailouts might have "helped" more in the short run, but no bailouts might have "helped" more in the long run. (re: competitiveness of US economy).
I see your point but the logic doesn't work for me. I don't see how the US could have remained 'competitive' with 2/3rds of its auto industry wiped off the map.
If you mean that Ford alone was going to compete globally with Mercedes, VW, BMW and the Japanese and Koreans...well, good luck with that....
My recommendation for the coming dreaded any day now we warned you, we really did, oh laugh-if-you-want---- apocalypse--- is not to horde gold or silver, but rather cans of Spam! :P
Here's how I see it; most Americans have short memories and aren't really worked up about the bailouts one way or the other. They will buy what makes the best deal for themselves regardless. Ford may have gotten some short term spin by avoiding them, but I think the new product is driving a lot of their gains. GM is doing some dumb things though. Why would you keep building the coarse 2.4L 4 banger along side of the new 2.5L, let along continue putting the substandard engine in your vehicles after the new one is out? Doubt what I' saying? Let's look back to Toyota - they were doomed, right? Quality issues, unintended acceleration, the tsunami... but they seem to be doing alright. The Camry was really more of an update than an all new product like the Fusion and Altima, so no surprise it isn't in as strong of a position. However, they still move and still do pretty well mechanically and on resale. GM has a good chance of having a spin up in a few years as they put out more new product, as long as they don't keep acting stupid on occasion!
If Tesla was given 60 billion instead of GM, we'd perhaps have a full line of Tesla models. I'm just using Tesla as an example, but certainly that kind of bailout/subsidy would make the Model S competitively priced, with say, a Volt by now. I just don't see how new and small car companies wouldn't have grown faster without GM in the way.
'18 Porsche Macan Turbo, '16 Audi TTS, Wife's '19 VW Tiguan SEL 4-Motion
Today, in July 2013, given the better state of the economy, I might agree with you on no bail-outs. But back then, I think it was unavoidable.
The unavoidable argument falls in the same line and vein as the TOO BIG to fail argument. Unavoidable, no choice, too big to fail, unthinkable, catastrophic, the world will end if we don't, yeah, all the same argument.
It all comes down to arguing that inaction would have been doomsday.
No question the bailouts helped the economy a little bit, but that is short-lived, unsustainable, and as others put it, bad for the long term. It lengthened the recession/depression were having.
Look at Detroit as an example of how the bailouts failed. They are going bankrupt in 2013 yet bailouts were 2008 and 2009. If the bailouts were so great then why are cities still going bankrupt.
If bailouts are so great, why not rescue Circuit City, Sears, Tucker, and every failed business in all of history?
And let me point out one final jab at my favorite punching bag, Chrysler, bailed out before, bailed out again in 2008/09, history repeats itself, what makes GM different?
'18 Porsche Macan Turbo, '16 Audi TTS, Wife's '19 VW Tiguan SEL 4-Motion
Here's how I see it; most Americans have short memories and aren't really worked up about the bailouts one way or the other.
Your right about that. The majority is sometimes wrong as MrShift stated, but in the case of bailouts, the majority got it absolutely 100% right. The fact they still think they were right in the same percentages years after the bailouts helps confirm that.
The bailouts only helped the 1% in my humble opinion.
Bush gave taxpayers a $1,200 credit, would have been interesting to see if we gave all taxpayers a $12,000 bailout instead; to see how the money was spent and whether GM was deemed worthy enough to save by consumers spending their own money!
No doubt Americans aren't worked up enough about it. If they were, we'd have few Republicans and even fewer Democrats still in office. 3rd and 4th party candidates would rule the day. The 2 party system would have been broken by now, and a revolt or revolution would have taken place.
Also, the NSA wouldn't track this post.
'18 Porsche Macan Turbo, '16 Audi TTS, Wife's '19 VW Tiguan SEL 4-Motion
The bailouts only helped the 1% in my humble opinion.
Not true. The bondholders lost their money, but the workers retained their pensions and healthcare. I seem to remember that GM had twice as many retirees as employees at the time of the bailout. That is not a good business model and was a major reason for the need for the bailout. Leaving the retirees' pensions and healthcare intact was part of Obama's socialist plans. Making the corporate investors (large and small) whole was not.
Watch what happens in Detroit. I can guarantee the bondholders will lose everything and the workers and retirees will lose very little if anything.
Unfortunately anybody that holds municipal or government bonds (which I do) will see their interest income and/or principals diminish. It will also be bad for any City, state or municipality looking to sell bonds. After all who would buy them knowing losing your investment is a fair possibility, of course unless the US govt insures them, adding to the national debt.
GM CEO Daniel Akerson received as much as $9 million in annual compensation, including $1.7 million in cash. His predecessor, Ed Whitacre, took home $6.4 million for only eight months as CEO, including $300,000 for “staying on” as company chairman from September 1 until the end of 2010. The pay packages were approved by Kenneth Feinberg, President Obama’s “pay czar” for firms bailed out by the Troubled Asset Relief Program (TARP).
In contrast, the average autoworker has given up anywhere between $7,000 and $30,000 in pay and benefits through the Obama administration’s reorganization of the auto industry, according to the New York Times.
Bush gave taxpayers a $1,200 credit, would have been interesting to see if we gave all taxpayers a $12,000 bailout instead; to see how the money was spent and whether GM was deemed worthy enough to save by consumers spending their own money!
Alaska does something like this, distributing around $1,000 a year from oil wealth dividends. I probably got ~$15,000 in dividends for the 20 years I lived there. Last year was a bit low, only $878 (link).
Some people save the money for something "noble", use it for their kid's college fund or for rent. Others "blow" it on 4 wheelers, travel or clubbing. Either way, it's a big economic driver. I don't remember any stories over the years about groups of people getting together to pool their dividends and create a business.
And let me point out one final jab at my favorite punching bag, Chrysler, bailed out before, bailed out again in 2008/09, history repeats itself, what makes GM different?
Have no idea if GM will get Bailed Out again - but I do predict, it won't be many years before they are Bankrupt again..... They still don't get that they need to RESTRUCTURE their model, not just cut some models to be competitive in the market. They'll be back. This bailout made it too easy on GM to remain essentially the same.
Comments
The world's only superpower cannot just sit there and let 2 of its 3 major automakers (who makes military vehicles by the way) go down the drain, or worse, be bought up at bargain prices by China and Malaysia and Japan.
Remember when the UK had an automobile industry? Remember how low they sunk in the world's self-esteem afterwards? Jaguar! Rolls Royce! Bentley! Lotus! MG!
Now owned by foreigners.
What president in his right mind would want to preside over THAT?
Unfortunately due to the unfunded and underfunded pension, healthcare, welfare, food stamp, and other social service obligations, that is pretty much where every local municipality, county, and state government is headed.
Oh, and the US govt HAS to pay interest on $17 trillion. What happens as the interest rates go up?
Just think if the money pissed away on the war machine and on aid to ungrateful nations was used to help domestic industry. It's kind of what the competition is able to do, as the US provides virtually free protection due to the ego of the military-industrial monster.
Are you asking the US to pull their heads out of the sand? Oh the humanity!
In the end, aren't the same results attained?
What's the difference between a dollar that has Zero value .vs. not having a dollar at all?
Rhetorical question, no doubt..... :sick:
You know, when Packard or Hudson or Studebaker went belly up, the consequences for the economy were basically local, and these were not part of American prestige or manufacturing power in the 1950s and 60s.
But General Motors---Detroit---The Corvette---this would be like selling the Statue of Liberty back to France......say, that gives me an idea..... :P
I don't think they're the same. By printing money they just dilute the value of the currency to cover the debt. But the dollar still has value, just not as much.
Of course, the dealer network was national and there were implications outside of Detroit and South Bend there, both post-Packard and post-Studebaker, although a fair number of Packard-only dealers then were signed up to sell Edsel.
And, I have a friend who lives in DC. There are three Mom & Pop stores just on his street, within perhaps a 1000 foot walk. And I'm sure that if you go over to the next street, either way, there are probably more.
New York solved its financial problems by becoming a Theme Park. :P
Maybe GM and Chrysler could have become a "Cars" Theme Park for Disney?
Ford Model T Plant May be Opened to Tourists
It wasn't an industry going under, just GM and Chrysler, let's be real. Yes, Ford would have been affected and hence why a few pennies on the dollar of the bailout might have been wise to keep the unfailing companies afloat from the collateral damage (suppliers, Ford).
Bush could have been the President to let GM and Chrysler go under, but he was a coward. He didn't bail them out enough to keep them alive long though, just enough to make Obama do it.
We could have new company startups like Obama motors (oh wait, that's GM), Romney motors, Bill Gates motors, Buffet motors, and others.
The majority of the American people were very ANTI-Bailout.
Any poll outside of Detroit would probably agree with that statement.
Okay, any poll take outside of a city that has a Big 3 plant/factory.
Make no mistake, the bailouts were a government take over by corporations.
I guess my point was that both examples approximate the same conclusion.
Ask anyone still alive that experienced the hyper inflation in pre WWII Germany, where it took wheelbarrows of currency to buy a single loaf of bread, and I'd bet they would tell you there really wasn't much difference. When one doesn't have the capability of carrying sufficient funds on one's person to buy the most basic of needs, then the currency has reached a de facto "nothing" in value.
Citation needed for that one!
Ruin porn is a real thing, Detroit could do it - just be sure to armor plate the tour buses.
Corporations own government, not vice versa.
http://www.nationaljournal.com/daily/despite-detroit-comeback-public-opposes-bai- lout-20120228
http://townhall.com/tipsheet/katiepavlich/2012/02/29/majority_of_americans_still- _oppose_auto_bailout
Before the bailouts it was still about 61% against even with CNN (67% against in West):
http://www.cnn.com/2008/POLITICS/12/03/auto.poll/
Even the very selfish Midwest had a majority 53% against the bailouts of the Big 3.
I'm getting older, but my memory isn't that bad yet, was easy Google search to find these.
What Bush, Congress, Senate, and Obama did with the bailouts was nothing short of a:
coup d'é•tat (ˌku deɪˈtɑ)
n., pl. coups d'é•tat (ˌku deɪˈtɑz, -ˈtɑ)
a sudden and decisive action in politics, esp. one resulting in a change of government illegally or by force.
But ANYWAY---all the polls proved (and polls are polls, polls are not facts, remember!) is that the majority of the people polled were, in fact, wrong---as the majority sometimes is.
The bailouts most certainly helped the economy---this seems to be no longer in question IMO.
The problem with supporting my view is that I can't show you what would have happened in the other scenario other than to point to the general economic downslide of the "Rust Belt" in historical perspective.
Also you have to put all this into context of the TIME in which it happened. The US economy was in free-fall. It was in a death spiral.
I think immediate decisive action was absolutely necessary.
Today, in July 2013, given the better state of the economy, I might agree with you on no bail-outs. But back then, I think it was unavoidable.
There's really no way to run the comparison to see how the economy might have been helped by the alternative decision.
Also, the bailouts might have "helped" more in the short run, but no bailouts might have "helped" more in the long run. (re: competitiveness of US economy).
If you mean that Ford alone was going to compete globally with Mercedes, VW, BMW and the Japanese and Koreans...well, good luck with that....
Seeing as the prison system is often corporate-managed and owned, maybe they can get some subsidies to locate there.
You mean no bailouts will help the US compete with others who receive both bailouts and lots of federal coddling? Interesting.
Also Twinkies, they last longer now too, and must be better now that the union has been broken by managerial ineptitude.
If Tesla was given 60 billion instead of GM, we'd perhaps have a full line of Tesla models. I'm just using Tesla as an example, but certainly that kind of bailout/subsidy would make the Model S competitively priced, with say, a Volt by now. I just don't see how new and small car companies wouldn't have grown faster without GM in the way.
The unavoidable argument falls in the same line and vein as the TOO BIG to fail argument. Unavoidable, no choice, too big to fail, unthinkable, catastrophic, the world will end if we don't, yeah, all the same argument.
It all comes down to arguing that inaction would have been doomsday.
No question the bailouts helped the economy a little bit, but that is short-lived, unsustainable, and as others put it, bad for the long term. It lengthened the recession/depression were having.
Look at Detroit as an example of how the bailouts failed. They are going bankrupt in 2013 yet bailouts were 2008 and 2009. If the bailouts were so great then why are cities still going bankrupt.
If bailouts are so great, why not rescue Circuit City, Sears, Tucker, and every failed business in all of history?
And let me point out one final jab at my favorite punching bag, Chrysler, bailed out before, bailed out again in 2008/09, history repeats itself, what makes GM different?
Your right about that. The majority is sometimes wrong as MrShift stated, but in the case of bailouts, the majority got it absolutely 100% right. The fact they still think they were right in the same percentages years after the bailouts helps confirm that.
The bailouts only helped the 1% in my humble opinion.
Bush gave taxpayers a $1,200 credit, would have been interesting to see if we gave all taxpayers a $12,000 bailout instead; to see how the money was spent and whether GM was deemed worthy enough to save by consumers spending their own money!
No doubt Americans aren't worked up enough about it. If they were, we'd have few Republicans and even fewer Democrats still in office. 3rd and 4th party candidates would rule the day. The 2 party system would have been broken by now, and a revolt or revolution would have taken place.
Also, the NSA wouldn't track this post.
Not true. The bondholders lost their money, but the workers retained their pensions and healthcare. I seem to remember that GM had twice as many retirees as employees at the time of the bailout. That is not a good business model and was a major reason for the need for the bailout. Leaving the retirees' pensions and healthcare intact was part of Obama's socialist plans. Making the corporate investors (large and small) whole was not.
Watch what happens in Detroit. I can guarantee the bondholders will lose everything and the workers and retirees will lose very little if anything.
Unfortunately anybody that holds municipal or government bonds (which I do) will see their interest income and/or principals diminish. It will also be bad for any City, state or municipality looking to sell bonds. After all who would buy them knowing losing your investment is a fair possibility, of course unless the US govt insures them, adding to the national debt.
Oh the irony. So you're okay with the money loaned to Solyndra when it was in the R&D stage as well?
In contrast, the average autoworker has given up anywhere between $7,000 and $30,000 in pay and benefits through the Obama administration’s reorganization of the auto industry, according to the New York Times.
Alaska does something like this, distributing around $1,000 a year from oil wealth dividends. I probably got ~$15,000 in dividends for the 20 years I lived there. Last year was a bit low, only $878 (link).
Some people save the money for something "noble", use it for their kid's college fund or for rent. Others "blow" it on 4 wheelers, travel or clubbing. Either way, it's a big economic driver. I don't remember any stories over the years about groups of people getting together to pool their dividends and create a business.
Have no idea if GM will get Bailed Out again - but I do predict, it won't be many years before they are Bankrupt again..... They still don't get that they need to RESTRUCTURE their model, not just cut some models to be competitive in the market. They'll be back. This bailout made it too easy on GM to remain essentially the same.