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So anybody else find it shocking that Obama basically took over GM?

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TraceOneInfinite:

--- Quote from: Matty on April 02, 2009, 11:15:57 AM ---my view would be if the government has to step in to prop up a company financially, it has already failed and bailing it out not only prolongs the inevitable but takes away the incentive and capital from being used effectively in the meanwhile. regardless of the amount of jobs lost, it is far more damaging to the economy long term to try and keep failed enterprises afloat.

with the case of banks it is straight up robbery of the tax payer when funds are used to shore up bad balance sheets. although car companies have plenty of bad debt to their names, they do continue to produce a tangible product (whether banks choose to continue lending is debatable) and this side of it is problematic when you get into government beauracrats making management decisions where they should have no say whatsoever. i could be wrong, but GM may need even more money and fail in the future regardless of whether it is propped up as a zombie-company in the short-term. time will tell...

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Word

Matty:
m dogg takes a political stance in his post above. it represents the government viewpoint in the sense that you 'cannot let gm fail' is a short-term politcally motivated decision as opposed to having any relevance to long-term prosperity or economic foundation. maybe the government can actually force GM to turn itself around, but the chances of this are extremely remote, to say the least. it is representative of the wider argument of government intervention. what people fail to see is the long term consequences of keeping failed companies afloat. it's not rocket science either, it's just what has to be done for the country to remain free and prosperous in the future.

the funny thing is obama has hinted he may let them fail anyway. the right thing to do, but also proves his leigance to the banks that do even less for the economy directly and due to the sheer amount of deriatives and exotic bad debts are slowly squeezing the wealth out of the nation.

M Dogg™:

--- Quote from: Infinite African AND American West Coastin on April 02, 2009, 11:17:48 AM ---
--- Quote from: M Dogg on April 02, 2009, 10:04:48 AM ---GM was/is on the verge of bankruptcy, and GM is just too damn big to fail. The alternative would have cost us millions of jobs. As the son of a UAW (United Auto Workers) union leader, I follow the auto industry closely. From the time FDR had GM close their car productions to make room for tank production, to now, the auto industry has been on the verge of socialism. The 70's saw the invasion of Japanese cars, and the 80's saw GM and Ford try to milk profits by making shitty cars so that people buy cars more often. Instead, by the mid-90's, GM was fucked over when people wised up and then went to foreign cars. Ford managed to recover, reintroduce the Mustang and rebuild itself as an American Icon. GM however went big, Chevy was making Hummers, going large with SUV's, which worked until gas prices shot through the roof. Just recently, they changed their model to more compact, fuel effectuate cars, one which an Impala gets 30mpg instead of my '03 Impala which gets 23mpg. GM was starting to change, but no one is willing to invest in GM. They have screwed themselves of 20-30 years of bad business. If you think GM is bad, Chrysler is even worst. My dad, a buy an American junkie said after working on Chrysler, he'd never buy a Chrysler (though he did buy my sister a PT Cruiser... ha ha ha), and many people would agree with them.

Bottomline though, we can not let either company fail, because people like my father, and many other fathers across this country, were/are employed by GM, and that is millions of jobs lost. We cannot have that happen, not now. In all honestly, GM deserves to fail, it deserves all it would get, but with millions of blue collar jobs on the line, we need to step in and get them in the right foot. I don't agree with firing the CEO, but it was more symbolic than anything. No one else was fired, and the same team is still there. It was a message, get your act right and lets do what we have to do.

--- End quote ---

Your commiting a most common error when it comes to analyzing the economy; and that is to focus upon what is seen and not what is unseen.  You are only focused upon the people at GM losing their jobs.  But what you neglect to see, is that this government bailout will be expensive upon the American public at large, and therefore, it will cause everybody to have less money either through inflation or taxation; therefore, instead of one business failing, 100's of businesses will fail because people will have less money to spend on the things they truly want and desire.  There standard of living will decrease because the government is now dictating to them where they should spend their money, rather than the individual making the decision as to what will benefit him most.

--- End quote ---

See, but here's the problem, putting 2-3 million people in the unemployment line, and in a highly concentrated area in the upper mid-west, you will see a region of the country decline to almost 3rd world levels. When GM fails, not only does GM fail, but all the companies that build parts, tires, service shops, dealerships, it hits harder than the burden it puts on taxes.

See, here's the deal, for many years we never gave a flying fuck what companies did, and they worked themselves into a hole that sadly homie, you, me and our generation will pay for until we die. As I talked to a Baby Boomer, he said that he hoped he would never have to see the day when we will have to pay off all the selfish governing we have done for 30 years. He said everyone knew what was going on then, they knew it was costing the next generation, but as long as they could keep their way of life, no one cared. Well homie, we will have to pay, we will have to find a way to keep banks from falling, from manufactures from putting millions out of work, and yeah our economy will suffer, but when we were spending more than we were making, when we were borrowing more so our government could spend to keep people in office, it's all coming to a head. Homie, it's over, it's either 2-3million more unemployed, or we spend more and fuck the dollar. I'm a liberal, I can give 2 flying fucks about the dollar, as long as people can eat.

I TO DA GEEZY:
Brian, I'm not sure Microsoft is the best way to support your case. Without the good services of the government Microsoft wouldn't be the empire that it is. In other words, Bill Gates didn't make it on his own. The question is whether you support the idea of allocating public funds and goods to corporations. You claim you "speak against it". If so then why did you just attempt to justify the parasite nature of Microsoft. Sure, it provides jobs, so did slavery, so do sweatshops, does that make them legitimate? If not, it also doesn't justify the privatization of public funds.

You seem to be concerned with individual rights. Corporations infringe on individual rights non-stop. They dominate the traditional media, they are making attempts to dominate the internet, they dominate the government, they constantly deceive the public through propaganda, not to speak of their tremendous impact on foreign policy.Let's also not forget their institutional structure which is straight totalitarian top-down control.Yet, all of this does not count as infringements on individual rights in your moral calculus.

Now, clearly you understand the idea of collectivist entities existing for their own purpose.I share your disgust with such entities.However, there is hardly a more paradigmatic example for such entities than modern corporations, which were initially designed to be temporary public projects, with revocable charters, untill early in the 20th century when they were granted the rights of human beings, not through legislation, not through the constitution, but through judicial  activism. They were also ordered a new pathological purpose by the courts- to maximize profit, without any regard for the human environment, unless it serves their business interest. Governments, though often corrupt, have at least some accountability to the public.

In addition, people like Adam Smith, not indifferent to individual rights and markets,would be disgusted by such monopolies that totally undermine free markets, while subjecting people's labour to external control.

herpes:
We need more post like this, lets get legit discussion going in this section again.

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