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Old Feb 25, 2012, 11:53 AM
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The Economist apologizes to Obama on GM

They were wrong. They had the integrity to admit it.

http://www.economist.com/node/16846494
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Old Feb 25, 2012, 12:00 PM
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What the article fails to acknowledge is the $18-31 billion that the taxpayers are on the hook for.

"Successful" would imply that they paid back the loan, with interest. GM has not and will not ever pay it back. The amount of money required would be taxing to even a highly successful oil company like Exxon.

GM cars suck. Period. I have owned 4 of them in the past and due to the bailout I will NEVER own another one.
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Old Feb 25, 2012, 12:07 PM
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interesting article,but it's from 2010.I guess GM is doing even better today.


...too bad all those thousands of holders of the old stock got hosed,
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Old Feb 25, 2012, 12:16 PM
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Originally Posted by SKYPILEIT View Post
interesting article,but it's from 2010.I guess GM is doing even better today.


...too bad all those thousands of holders of the old stock got hosed,
Thy would have been hosed if gm was liquidated which is what would happened given no private money was stepping up to bail them out. That would have been disasterous for the industry and the country.
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Old Feb 25, 2012, 01:15 PM
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"Had the government not stepped in, GM might have restructured under normal bankruptcy procedures, without putting public money at risk. Many observers think this unlikely, however. Given the panic that gripped private purse-strings last year, it is more likely that GM would have been liquidated, sending a cascade of destruction through the supply chain on which its rivals, too, depended."

"That does not mean, however, that bail-outs are always or often justified. Straightforward bankruptcy is usually the most efficient way to allow floundering firms to restructure or fail. The state should step in only when a firm’s collapse poses a systemic risk. Propping up the financial system in 2008 clearly qualified. Saving GM was a harder call, but, with the benefit of hindsight, the right one. The lesson for governments is that for a bail-out to work, it must be brutal and temporary. The lesson for American voters is that their president, for all his flaws, has no desire to own the commanding heights of industry. A gambler, yes. An interventionist, yes. A socialist, no."
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Old Feb 25, 2012, 02:40 PM
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Thy would have been hosed if gm was liquidated which is what would happened given no private money was stepping up to bail them out. That would have been disasterous for the industry and the country.
How would it have been disastrous for the country?

No more pile of crap GM cars? Oh, wait! The Unions would have taken a huge hit and not voted again for Obama!

Now I understand.....
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Old Feb 25, 2012, 02:47 PM
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Thy would have been hosed if gm was liquidated which is what would happened given no private money was stepping up to bail them out. That would have been disasterous for the industry and the country.
I don't buy that line of thinking. We've purchased equipment from and hired former employees of bankrupted businesses in the past, and it was a boon for us.

Big government types don't really understand or respect free markets.
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Old Feb 25, 2012, 02:49 PM
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A cascade of destruction through uneconomic suppliers is what is supposed to happen for a distorted economy to clear the distortion. Instead we have the State interfering with a perfectly well established bankruptcy process and billions in public debt replacing what should have been private loss. What has occurred is a wealth transfer from private risk to public debt, totally empowered by State action.
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Old Feb 25, 2012, 02:52 PM
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What our government did with GM should be a warning where we are headed. The rule of law is no longer important, obamacare is another example. America is in real trouble and not many understand the implications of these actions, however, we all will soon.
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Old Feb 25, 2012, 02:53 PM
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Those with zero imagination can't seem to see all the jobs lost and businesses ruined by ripping 18 billion bucks out of the private economy. Or adding that debt to the economy of the future. They only see a company which is doing well after billions given to it. Heck, any worthless business could "succeed" with that sort of payout.

Also invisible to those who only see the surface is all the opportunity and jobs lost because GM stayed in business. Ford, Tesla and maybe even entire new companies would have done so much better with GM gone.

The marketplace would have worked this out so much better for more people without the heavy fist of socialism. Once again we'll never know, and most can only see a company "saved"
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Old Feb 25, 2012, 02:57 PM
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I don't buy that line of thinking. We've purchased equipment from and hired former employees of bankrupted businesses in the past, and it was a boon for us.

Big government types don't really understand or respect free markets.
GM is not just another business. It's collapse would have far reaching efects. Not to mention the thousands more who would have been unemployed.
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Old Feb 25, 2012, 03:23 PM
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GM is not just another business. It's collapse would have far reaching efects. Not to mention the thousands more who would have been unemployed.
You could say that. I could say that saving GM will have far reaching effects. Not to mention the thousands of people who will be working for a company held in such contempt.

You imply disaster if we didn't save GM. I think bailing out GM would be like bailing out the brother-in-law who doesn't seem to learn from his mistakes. You're rewarding bad behavior.

The problem is, this isn't capitalism. By bailing out GM, you're rewarding workers who decided to work for a poorly managed company. You're rewarding managers who have demonstrated an inability to make sound business decisions. Your rewarding suppliers who gambled. Their rewards were not limited, but their losses were, thanks be to the government.

Not sure why you think all of this will produce a good result.

Better to let GM fail, their equipment and land be bought for dimes on the dollar, their workers find other employment with competitors or in different fields...from the dust, something bigger and better could and probably would rise.
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Old Feb 25, 2012, 03:30 PM
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GM deserved to go under. Other companies who made better business decisions would have picked up the workers and business as the need for cars was still the same. Obama saw an opportunity to pay off his union boyz and did. SCREW the law SCREW the bond holders, obama got HIS way while we collectively stood there and watch and did nothing. Sort of like watching a mugging on the streets of New York.
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Old Feb 25, 2012, 03:38 PM
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Originally Posted by Griffin View Post
Those with zero imagination can't seem to see all the jobs lost and businesses ruined by ripping 18 billion bucks out of the private economy. Or adding that debt to the economy of the future. They only see a company which is doing well after billions given to it. Heck, any worthless business could "succeed" with that sort of payout.

Also invisible to those who only see the surface is all the opportunity and jobs lost because GM stayed in business. Ford, Tesla and maybe even entire new companies would have done so much better with GM gone.

The marketplace would have worked this out so much better for more people without the heavy fist of socialism. Once again we'll never know, and most can only see a company "saved"
It wasn't just GM. ONE IN SEVEN here work in autos in some form. Sure, let 'em fall on their faces...along with HUNDREDS of suppliers and subcontractors and from there all the businesses the employees of all those companies buy things from. It's real easy to play "armchair economist" but with all that potentially at stake, if YOU sat in the Big Chair, would you hav e taken the risk of such a domino effect? And no, it shouldn't be needed in the first place, but that's the kind of garbage that companies "too big to fail" handed us. To me too big to fail means too big to MANAGE, as Ford and GM seemed to prove by divesting companies they should not have bought in the first place. Guess those corner office boys weren't worth those huge salaries after all.
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Old Feb 25, 2012, 03:43 PM
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Originally Posted by BE77 Pilot View Post
GM deserved to go under. Other companies who made better business decisions would have picked up the workers and business as the need for cars was still the same. Obama saw an opportunity to pay off his union boyz and did. SCREW the law SCREW the bond holders, obama got HIS way while we collectively stood there and watch and did nothing. Sort of like watching a mugging on the streets of New York.
Only if many, many other companies were willing to hire thousands of people...which they weren't and still aren't in big enough numbers. Oh, and the need for cars was in in the toilet, along with all the laid off employees.

As usual, management screws the pooch and the rest of us pay for it.
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