westvirginia Posted March 29, 2010 Share Posted March 29, 2010 You do realize what likely would have happened had our auto industry, and all the companies that supply parts, services, transportation, etc. to it, been allowed to fail, right? The fact you think it resulted in a "net loss" for taxpayers is very curious. They would have gone into bankruptcy, just like they ended up doing anyway. But then the judge would have awarded the stock to people who actually held debt in the company, instead of paying off unions like the obamessiah did. Quote Link to comment Share on other sites More sharing options...
i_am_the_swammi Posted March 29, 2010 Share Posted March 29, 2010 but bailing out companies that have slowly been digging their own hole of failure for decades is just bad economics (ask wiegie if you don't trust me). Oh, I trust you, and agree with you. But the larger problem here was the nature of the industry, and its wide-reaching implications of failure, had it been allowed to happen. Not only would the companies themselves gone bankrupt, but likely many of the companies that supply parts to them, transport them, privately dealerships that sell their cars, banks that provide debt for purchases of new cars....the list is ridiculously extensive. Also include in your analysis the idea that, had a major industry been allowed to fail, what it would have done to unemployment, consumer confidence, fthe impact on foreign trade, loans related to new car purchases..... this was not like lettling Chuck-E-Cheese go under. Quote Link to comment Share on other sites More sharing options...
wiegie Posted March 29, 2010 Share Posted March 29, 2010 (ask wiegie if you don't trust me). my thoughts from 1.5 years ago haven't changed Industrial organization is not one of my fields and I haven't given this this much thought at all, but how about something like this. f' em and let them go bankrupt: Let all current equity holders get nothing. Fire the CEO's, Board of Directors, and other people in charge and let them walk away with nothing either. Convert long-term debt into equity. Convert short-term debt into long-term debt. Government then "bails out" the firms by obtaining new "super-senior equity holdings" that will be paid back even before debt-holders are paid back. (Could also put in some restrictive covenants to force the auto industry to do things that the government wants for it to do.) Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted March 29, 2010 Share Posted March 29, 2010 But the larger problem here was the nature of the industry... hogwash. you can make that lame "interconnectedness" argument with any large company, and that's still all it is. they all have tons of clients, vendors, etc. hell, even your example of chucky cheese, if it were as large as GM, would have as many "jobs" tied to it growing wheat for crust, milking cows for cheese, manufacturing balls for the ball-bin. those jobs and businesses would either find new clients (I assume the demand for pizza wouldn't suddenly disappear), or they'd continue doing business with whoever bought chucky's assets out of bankruptcy, or yeah, they'd go out of business too if their primary client had to go out of business because they couldn't turn a profit. that happens all the time. it is how the economy works. when you go away from that, you reward bad business and, by extension, punish good business. Quote Link to comment Share on other sites More sharing options...
The Wolf Posted March 29, 2010 Share Posted March 29, 2010 this was not like lettling Chuck-E-Cheese go under. I hate CEC, but they are printing money hand over fist...THEY could have bailed out Citi...! Quote Link to comment Share on other sites More sharing options...
i_am_the_swammi Posted March 29, 2010 Share Posted March 29, 2010 hogwash. you can make that lame "interconnectedness" argument with any large company, and that's still all it is. they all have tons of clients, vendors, etc. hell, even your example of chucky cheese, if it were as large as GM, would have as many "jobs" tied to it growing wheat for crust, milking cows for cheese, manufacturing balls for the ball-bin. those jobs and businesses would either find new clients (I assume the demand for pizza wouldn't suddenly disappear), or they'd continue doing business with whoever bought chucky's assets out of bankruptcy, or yeah, they'd go out of business too if their primary client had to go out of business because they couldn't turn a profit. that happens all the time. it is how the economy works. when you go away from that, you reward bad business and, by extension, punish good business. Um, like I said, I generally agreed with your original premise. But, in the economic spiral we were/are in, there was no way we could afford to have perhaps our most important industry fail. As for the "hogwash" comment, I bet you couldn't find 1 person in a million that really believes the success or failure of Chucky Cheese is as important to our nation's health as that of its auto makers. Just a hunch. I liked your effort, though. Quote Link to comment Share on other sites More sharing options...
WaterMan Posted March 30, 2010 Share Posted March 30, 2010 I'm sure history will look back on the autobail out as one of the worst events in written history. A President saving families and jobs is horrible. He should have been looking out for the 3 or 4 men who owned the most stock. Quote Link to comment Share on other sites More sharing options...
Big Country Posted March 30, 2010 Share Posted March 30, 2010 As for the "hogwash" comment, I bet you couldn't find 1 person in a million that really believes the success or failure of Chucky Cheese is as important to our nation's health as that of its auto makers. Just a hunch. I liked your effort, though. Well, if Chuck E Cheese fails, that is less pizza for our kids to eat, that could possibly be replaced by healthier food choices. This in turn leads to a healthier generation. A healthier generation is less of a burden on our health care system. This reduced burden would reduce the costs associated with health care and insurance, freeing up resources to pay down national debt, improving our economic conditions and providing a general boom to our society. Too much of a stretch? Quote Link to comment Share on other sites More sharing options...
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