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US Treasury Completes Bailout of General Motors
Hugh Pickens DOT Com writes "Jim Puzzanghera writes in the LA Times that the federal government has sold its remaining shares of General Motors stock, ending the controversial $49.5-billion bailout of the automaker begun in late 2008 under former President George W. Bush. Although the GM bailout ended with a $10.5-billion loss for taxpayers, Treasury officials say the goal never was to turn a profit. The rescue prevented further damage to the economy and the potential loss of 1 million jobs says Treasury Secretary Jacob J. Lew. 'This marks one of the final chapters in the administration's efforts to protect the broader economy by providing support to the automobile industry.' At its height, taxpayers had a 60.8% ownership stake in GM. The auto bailout will rank as 'one of the most important interventions, maybe the most important, in U.S. economic history,' says Sean McAlinden, chief economist for the Center for Automotive Research. Without it, 'the upper Midwest would still be a gaping, double-digit unemployment hole in the economy, 600,000 retirees would've lost their pensions.' ... The Cadillac CTS was picked as Motor Trend's car of the year and the Chevrolet Impala was the first U.S. car chosen as the best sedan on the market by Consumer Reports in 20 years. 'We will always be grateful for the second chance extended to us and we are doing our best to make the most of it,' says GM CEO Dan Akerson. 'Today is not dramatically different from the hundreds of preceding days during which we have worked to make GM a company our country can be proud of again.'"
Union beard
$10B it's feared
Need a crony scrape
Or the market's a jape
Burma Shave
Get thee glass eyes, and, like a scurvy politician, seem to see things thou dost not.--King Lear
... does betting almost your entire pension on the fate of one single company seem like a really unwise idea?
That if GM had collapsed, it would have created a huge vacuum, that would have rapidly been filled with new startups. The automotive industry could have gotten a big injection of "new" and we'd have maybe dozens of Tesla-like automotive companies.
The Internet King? I wonder if he could provide faster nudity.
The government previously forgave $15.4 billion in loans to GM: http://www.reuters.com/article/2009/05/19/gm-bankruptcyplan-idUSN1943363120090519
In addition, the government would extend a credit line to the new company and forgive the bulk of the $15.4 billion in emergency loans that the U.S. has already provided to GM, the source said.
The government also made a "special ruling" for companies receiving bailout money... http://online.wsj.com/news/articles/SB10001424052748704462704575590642149103202
It [GM] won't have to pay $45.4 billion in taxes on future profits.
Not only is the taxpayer out over $70 billion to bail out GM, but the original bond holders who were illegally robbed are still waiting for their money too.
General Motors only employs 200,000 people. I'm not saying that there wouldn't be a peripheral effect, but 1 million jobs is a gross overestimate. Also, a large number of STEM professionals work for General Motors. Engineering degree + 20 years in the industry = almost guaranteed employment. Quality of life may need to decrease temporarily but most of those employees will definitely rebound quickly.
The EV1 was a good reason to be proud, perhaps if GM made cars like that...
My ism, it's full of beliefs.
I wish I could run my business into the ground and then just reach into the taxpayer's pockets, borrow $40B, and only have to pay $30B of it back.
" Although the GM bailout ended with a $10.5-billion loss for taxpayers, Treasury officials say the goal never was to turn a profit. The rescue prevented further damage to the economy [...] "
Funny how they don't think throwing 10 billion down a toilet didn't further damage the economy. Even if GM went out of business, which it wouldn't have, someone else would have bought the resources and done something with them. Just flatly stating that 1 million jobs would have been lost is so deceitful.
I also remember telling people over and over how this was going to be a huge loss since GM would never be able to pay it back and every liberal democrat crawled out from under every rock saying that this was going to be a great profit and win. NOW ... now its "Oh, we never meant to make a profit." Yeah, just like if I liked my health care / doctor I could keep it.
Just wait till the 2014 elections ...
Corporate Suit
Thinks it's a hoot
$10B in loot
GM still a coot
Burma Shaved
May the Maths Be with you!
From the standpoint of your typical national politician, upon whom the fallout of job loss and economic strife will land, too big to fail is a no-brainer. Whether or not these bailouts are actually good for the citizenry as a whole is entirely another matter. Since national elections are funded on the backs of the Corporatocracy, instead of publicly (and evenly) funded, it would appear prudent at this juncture to assume it will continue.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
But Detroit is bankrupt and the GM workers are most likely not going to see any kind of pension.
Guess they weren't big enough not to fail.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Why would I ever want to buy a car from a company that already owes me money?
The government can just print more money. Then those dollars go sit in some foreign bank account, so it doesn't affect inflation immediately. Then some electronic currencies appear, make national currencies worthless, and the whole financial world explodes. Then we go back to creating local neighborhood markets, planting food in the backyard, and trading based on barter because no money of any kind is trusted by anyone.
Build your own energy sources from scratch. http://otherpower.com/
Well done - maybe next time you could try and break even? (Depending on how you look at it, AIG was a profitable bailout, for example.)
Ken
should keep its stinking hands out of tax payer pockets
Socialism for megacorporations (which, after all, are people too!) that have been managed into oblivion, but free-market capitalism for the rest of us slobs.
Could this money be better spent to improve the economy? Yes
Could the government bureaucracy spend this money in a better way to improve the economy? No
Did the government made the right decision with the loan? Yes giving the bureaucracy.
I don't claim to be right, I'm no economist.
the numbers of correct, the US could have let GM collapse and give ever person directly affected (1 million people) 50,000$ in a lump sum and we (the people) would probably still have come out ahead.
Something to think about...
So rise up, all ye lost ones, as one, we'll claw the clouds.
How is it the rich and wealthy big businesses can get away without paying their debt? How is it the Tax Payer is left to foot the bill? They should have failed. People can get by, move, or find jobs. That's the chance we all take working for any company. We aren't getting that 10.5 Billion back.
& it's spreading... cahoots is cahoots. how embarrassing being fake heritage addicts has become?
no bomb us more mom us
no drone us no bone us
free the innocent stem cells
read the teepeeleaks etchings
Why is it that taxpayer money can be used to bail out corporations and banks while not lifting a finger to help "We the People"? _And_ to "forgive" or write-off billions in unpaid debt? I'm shocked the CEO's and corporate officers who drove those companies into the ground haven't been lynched by the citizens of your country.
... which leads me to once again wonder if the bottom 99% in America will ever wake up to discover they have a comment interest and see how powerful they can be when acting together... but that's a topic for another time...
That if GM had collapsed, it would have created a huge vacuum, that would have rapidly been filled with new startups.
No it would not have. You clearly have NO idea how much capital is required nor how much infrastructure is needed to build an auto company and the supply chain that goes with it. Furthermore you seem to be forgetting that in 2008 there was ZERO capital available. Nobody could get capital from the banks because there was no liquidity to be had. Your notion that a bunch of startups could even begin to fill the void left by a suddenly missing GM is laughable. Even if we could have magically waived a wand and provided the capital the engineering would take years. It takes many years to even build a very small auto company like Tesla.
GM isn't just an assembly line. It is the keystone in an entire supply chain. GM goes under and so does virtually every Tier 1 supplier as well as Ford and Chrysler. Even the CEO of Toyota admitted publicly that GM being liquidated would have hurt Toyota badly because they depend on many of the same suppliers. My company would have been out of business entirely and we are a Tier 3 supplier to GM. And we would have been just one of thousands of firms that would have collapsed. Even Tesla would likely have collapsed because the supply chain would have imploded. Tesla depends on many of the same suppliers who would now be bankrupt.
"Today is not dramatically different from the hundreds of preceding days during which we have worked to make GM a company our country can be proud of again.
Doesn't anyone ever tire of the never-ending flag waving at every single event and entity in their lives? The cult of nationalism.
Without it, 'the upper Midwest would still be a gaping, double-digit unemployment hole in the economy
Like Detroit?
...before he was against it. Same with Obamacare, immigration reform, etc.
...is not dramatically different from the hundreds of preceding days during which we have worked to make GM a company our country can be proud of again
A lot of Americans will not be proud of GM no matter what cars they build. They've been instructed not to because of the insidious union operating there.
Damn Democrats always messing with the free market.
Um, this started under GWB -- it's even in the summary. I doubt it mattered who was in office at the time, as the major parties are basically the same on all but cosmetic issues, but if partisan trolling is your thing at least get it right.
And the birth certificate thing... Really? Still?
Gosh, thanks. That must be why the other ships call me Meatfucker -- GCU Grey Area (Eccentric)
Nice car, good job GM.
We bailed out the automakers for the same reason we subsidize food production - there is a strategic value in being self-sufficient. If there was another world war or a global catastrophe, we'd be fucked if all our cars and trucks and armored vehicles and tanks were manufactured elsewhere. And what's $10 billion compared to the trillions we already throw away to make sure the oil keeps flowing.
Mod parent up. Taking Poe's law into account, there are two possibilities, neither of which should be modded down.
1. The PP is a parody. ... what's the polite term? Screw it - a wingnut. It should be seen in order to understand the political thinking of a certain faction, and to debate if one feels like a little sport.
2. It's from a
One of the huge problems with the US government's GM dealings is that we don't actually know how much they put into GM. Last I checked there was somewhere over two trillion dollars in US bonds owned by the Federal Reserve and they're still printing money this way. That's a lot of debt, including private bonds and an easy, unaccountable way to hide losses.
If this were a private business doing this, we'd be outraged because who knows how many bad deals and losses are being hidden via QE money?
Stop cutting corners to save costs and make cars that actually work.
Note I've always been a Chevy fan, but anything built after 85 has been complete shit.
I am Bennett Haselton! I am Bennett Haselton!
Damn Democrats always messing with the free market.
Um, this started under GWB
To Tea Party Republicans, GWB was a Democrat.
the major parties are basically the same on all but cosmetic issues
Let's look at the facts:
Democrats: 205 in favor, 20 opposed
Republicans: 32 in favor, 150 opposed
½ right. Bush stared the process but Obama finsihed it - and Obama did make some of the decsions.
My biggest grip is that Obama reward the union by putting their claims ahead of the other unsecured borrowers and bullied those who opposed them. If you want to argue that pension benefits should be ahead of unsecured debt that’s fine – please change the bankruptcy law – don’t retroactively change the rules to benefit your constituents.
The fundamental principle of capitalism is "good* companies succeed, bad companies fail". Without that, capitalism breaks down.
If a company is "too big to fail", that breaks capitalism. No company should ever get to such a position (even if it gets there legitimately), because when it does eventually fail, it's going to do too much damage.
That may not have been easy to see before the economy shit itself, but it was definitely something anyone could see while the bailouts were happening. It should have been MANDATORY for any company that accepted bailout money to be broken up into pieces that were small enough, individually, to fail without destroying the entire economy. The fact that this did not happen means that we're just waiting for them to fail and ask for a bailout again.
That said, I can think of a few situations where such a bailout would been justified. If the company's failure were caused by something truly unpredictable (meteor impact), or if it were not too-big-to-fail beforehand (eg. a military-equipment manufacturer could become essential to the nation if WW3 started up), it could make sense to do a bailout. It's not pure capitalism, but I'm not a pure capitalist. But these bailouts? None of them were at all unpredictable, and most of these companies have been "too big to fail" for longer than I've been alive (and that's not just because I'm young - AIG predates WW2, and GM predates WW1).
* I'm using a non-cynical definition of "good companies" and "bad companies" here - for my purposes, a good company is one that offers a product that is in demand at a price customers can afford while turning a profit (or at least breaking even), while a bad one either offers something nobody wants, cannot do so at a price customers can afford, or can only do those two things by burning through cash.
Um, this started under GWB -- it's even in the summary. I doubt it mattered who was in office at the time, as the major parties are basically the same on all but cosmetic issues
Not the same AC, but I thought that was the joke?
The market has been fine since the beginning of human history. Leave it alone
The Free Market saves! The Free Market has no flaws! Trust in the Free Market, and you will be able to buy Paradise(tm) some day!
Market failure is both a hard fact of reality and, apparently, anathema to the dumbest religion in history.
I keep hearing about how Obamacar is the law of the land. I want my Obamacar!
While few normal people would begrudge the bailout for saving everyone even greater costs down the road, Anglo Saxon style capitalism has a BIG problem holding while-collar bludgers and thieves accountable for taking profits in good times, dumping liabilities, socialising losses and making society pay for their fuckups.
Failure must be punished ruthlessly, but we fail to do so miserabley.
The government should've rounded up all the senior managers, and garrotted them all in public for their crimes.
Classify capital gains, all capital gains, the same as ordinary income/wages.
Market failure is both a hard fact of reality and, apparently, anathema to the dumbest religion in history.
That cult is widespread, but I hope no Christians, Jews or Muslims are involved. If so, tell them to re-read Exodus (not sure what the Quranic equivalent is). The whole Market Worship (oops, I meant golden calf) thing was a big mistake.
This article refers to the TARP loss of $10.5B on an investment of about $250B overall.
It does not discuss the additional "taxpayer" loss of all the bond principal, not normally cancelled in bankruptcy, this government managed BK did.
That increases the losses to well over $60B to "taxpayers".
Where did that $60B go? Into Union pension plans and benefits "offsets". There's a government term for you.
The bondholders should prevail against the government to recover their federally (executive) mandated illegal losses.
In accounting, always look to both sides of the ledger. Just don't expect to see the whole story in the general media.
The GM bailout was not about automakers or even suppliers, but that was a good way to sell it to the american people. It was wholly about the huge fraud in the real estate market and bond tranches held by Ally fin, gmac financing, and ditech. It was just another mechanism used to funnel money back to the primary dealer banks during liquidity crisis days of 08-09.
Yes, you were robbed. Yes, people should be in jail, no it wont happen. But this has nothing to do with keeping tire manufactures and spark plug makers in business.
He is a lot like Barrack Obama. The guy who created entirely new sections of government to rule over our freedoms.
They are different.George seemed to have a bit more respect for the people. Nice enough guy I would guess. But they both are responsible for spearheading a campaign to remove freedoms from the people. They both damaged the country. The real difference is that Obama still has time to screw more stuff up.
Why is it so hard to only have politicians for a few years, then have them go away?
If a company goes bankrupt, bondholders are among the last people to get their debts paid - payroll, suppliers, bank lines-of-credit, and retirees all get paid before bondholders see a dime.
I think you may be confusing bond holders with shareholders. Shareholders are the last to get paid in the event of a bankruptcy. Bondholders, particularly secured bondholders, are normally among the first in line to get paid in most cases because they some form of seniority claims. Typically the terms for bonds place them pretty close to the front of the line to get paid, usually in front of most if not all of the creditors you mentioned. I can assure you from first hand experience with the Delphi bankruptcy that suppliers are nowhere near the front of the line (we got screwed along with many others) and certainly not in front of most bond holders. Bank lines of credit would not generally be in front of bondholders either, particularly if they are unsecured lines of credit. Employees and retirees also typically do not have a senior claim to company assets over bond holders though sometimes they do.
GM did effectively go bankrupt.
GM didn't effectively go bankrupt. They DID go bankrupt.
The market has been fine since the beginning of human history. Leave it alone
The Free Market saves! The Free Market has no flaws! Trust in the Free Market, and you will be able to buy Paradise(tm) some day!
Market failure is both a hard fact of reality and, apparently, anathema to the dumbest religion in history.
The Free Market is about profit and loss. Risk and reward. There is no such thing as "Too big to fail" in the Free Market. GM should have failed. Let it be refactored to be profitable without a big bailout, or even sell off it's assets.
Bailing out companies that make poor decisions because they are "Too big to fail" is crony-capitalism. It allows companies to make poor decisions and get away with them, and promotes brib^H^H^H^HPolitical Contributions.
if (it != oneThing) it = another;
401ks
uhhh, yeah...., we don't feel like putting the pension money promised in your contract in the account this quarter like we said... here's an IOU...
On second thought, screw you, take your chances and gamble your own money in an market increasingly gamed by the big fish. rots of ruck with that!
This is why we've got to get the Chinese to stop putting melamine in pet food! I don't want to eat that shit!
Funny how they don't think throwing 10 billion down a toilet didn't further damage the economy.
If the only one that would have suffered the consequences of a GM liquidation was GM then you might have a point. In the real world however a GM liquidation would have destroyed the entire supply chain. GM doesn't exist in a vacuum. Ford would have gone bankrupt as well because they share the same suppliers. Even Toyota would have taken a hit. My company would have been out of business. $10 billion is expensive but compared to a GM liquidation it is money well spent.
Even if GM went out of business, which it wouldn't have, someone else would have bought the resources and done something with them.
Not without a SEVERE dislocation to the US economy. It wasn't just GM it was the entire supply chain that would have gone under. This notion you have that a GM bankruptcy would have no effects on any other companies could not be more incorrect.
Just flatly stating that 1 million jobs would have been lost is so deceitful.
Actually it probably understates things. Every employee that GM has is supported by around 6 employees in the supply chain. A GM liquidation would have resulted in many of the Tier 1 suppliers and a huge number of the Tier 2 and 3 suppliers going under. This would have dragged Ford into bankruptcy too because their supply chain overlaps heavily with GMs. Chrysler would likely have been liquidated rather than bought by Fiat because they too depend on the same supply chain.
But Detroit is bankrupt and the GM workers are most likely not going to see any kind of pension.
Detroit != GM
One is a city and the other is a company. Detroit's bankruptcy has nothing to do with GM's bankruptcy.
GM pensioners are going to get paid just as public employees of Detroit are. The amount is a different but their pensions didn't just vanish.
the major parties are basically the same on all but cosmetic issues
I like to theorize that this is why we see such a near 50/50 split during most presidential elections, with deviation occurring mostly when one of the candidates is particularly unlikeable. It's pretty much just a coin flip.
The government should not have allowed mergers into just 3 companies anyhow. If there were say 7 or so car companies, then one or two failing wouldn't topple the whole north.
If you let oligopolies form, then you get Too Big To Fail. We still have banks that are Too Big To Fail. Nobody has the guts to slice them up.
Table-ized A.I.
As harsh as it is for those on the losing side of the ledger, capitalism requires failure for those who misallocate resources. Periodically disrupting Adam Smith's "invisible hand" is very tempting and can be rationalized in countless ways, some intellectual, some humane, but in the end the result is weaker economy that is less able to compete on its own against other countries without continued subsidy from the government.
Humans would have turned out rather differently if mother nature had decided to take the kind route and let some of our mutations survive and procreate.
That all sounds grand in Libertarian Heaven, but the reality is letting them go down would have been a devastating impact on the economy and probably enough to make recession far worse. BTW, I don't know if any of those links made the point but the estimated costs for social services for all those laid off employees would have been over $100 BILLION.
I swear to God...I swear to God! That is NOT how you treat your human!
Bailing out companies that are "too big to fail" is a poltical reality. There does not exist the political will to allow a "too big to fail" company to fail and with it take down a large swath of the national economy. That's why you had George Bush's "free market" Goldman Treasury guy Paulson begging on hands and knees to Congress with tears in his eyes to give Wall St. a blank check. And this is exactly what the solution to "too big to fail" is to make sure nothing gets big enough to become "too big to fail."
One of my frustrations with this socialist form of capitalism is that you cannot predict what/who the government is going to bail out. In true capitalism, you know that you are on your own. But in the US nowdays, you might get lucky and get bailed out if you are upside down on your house. Or maybe you will get a retroactive tax credit if your income is below a magic number and your mortgage is above another magic number.
I have to wonder how many small businesses went under because they didn't have the ability to lobby congress as hard as the automotive industry did?
It's great that GM got a second chance, but why did they deserve it over others? Sure they are big and partially support a supply chain. But I'll bet that better managed companies would have loved to redirect that supply chain to their production line with GM out of the way. It's no surprise that the other automotive giants didn't want to see GM go under... they didn't want any game-changing new companies to spring up.
Now the government has just reinforced that big business can continue to play fast and loose up front and get bailed out on the back end.
social services for all those laid off employees would have been over $100 BILLION.
Considering over $1 TRILLION was spent bailing out the banks and Wall Street, that doesn't seem too bad.
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
The government should not have allowed mergers into just 3 companies anyhow. If there were say 7 or so car companies, then one or two failing wouldn't topple the whole north.
If you let oligopolies form, then you get Too Big To Fail. We still have banks that are Too Big To Fail. Nobody has the guts to slice them up.
Will somebody please give this man some goddamn mod points?!
Does anyone have links to articles in 2008-09? I remember the goal -was- to turn a profit and repay taxpayers. That was a best-case scenario at the time.
I know it's kind of a running joke, but twice in the last few years I've ended up with an Impala as a rental car while on vacation, and both times came away rather impressed. My current car's approaching end of life, I'm considering an Impala for my next one.
Because I'm lazy I asked wolfram.alpha to do the math: What is $10.5 billion divided by the population of the usa.
It says $32.90 / person. I briefly thought GM could give everyone a free car as their way of saying "We're sorry" but $32 doesn't really buy much more than a license plate holder.
So you think that financial entities are more important than people?
Capitalism is great but it has seriously devalued people. We need a little balance here.
I don't read your sig. Why are you reading mine?
Interesting article in the Guardian this weekend which talks about the failings of capitalism:
http://www.theguardian.com/world/2013/dec/08/david-simon-capitalism-marx-two-americas-wire
I think the Pope has it right... we have gone off the cliff worshiping the golden calf.
I don't read your sig. Why are you reading mine?
Of course not – but I am not sure what that has to do with anything. If you don’t like the law, change the law. Can you explain why GM pensions are more important than other pensions that held GM debt? Or do you think the President should ignore the law anytime he feels it is inconvenient? Or maybe only sometimes? If so, when can he break the law?
America is a nation of laws, not a kleptocracy where elected officials buy votes by throwing cash at their privileged base. I am exaggerating to point out the principle involved but it is a principle that I think should be robustly protected.
Why would the suppliers be forced to close? Ford, Toyota, Honda, Kia and Hyundai were all still solvent and manufacturing vehicles (in the USA) when GM failed. They were still buying from parts suppliers and supporting supply chains. Had GM been allowed to fail all that would have happened is demand would have shifted from GM factories to other factories, and at worst parts suppliers would have to retool their assembly lines to make a slightly different steering wheel. Maybe Ford would have picked up a few GM plants on the cheap to increase production.
The problem is you're assuming DEMAND for cars would have dropped by the equivalent of GMs market share which is ridiculous.
The Post Office, Amtrack, GM... The US federal government does little well and to the benefit of the country and its citizens.
Now it's getting personal with health care. If we keep going with the flow, these good intentions that turn in to a loss will translate to loss of life not just money.
Wanna be grateful and help the economy?
Deport every H1B and L-1 visa holder, pull all IT back to the US and only hire US IT workers.
AIG executives got bonuses just after they tanked the economy and received a big bailout because "they had a contract" but the contracts that employees have with GM for their pensions didn't matter?
I don't read your sig. Why are you reading mine?
I don't think most folks understand the difference between B and T. Hell most can't fathom the difference of 100MM compared to 1.1B. Write it out in equivalent terms. $1,000BILLION.
Of course not, but then again the bond holders also had a contract with GM.
In bankruptcy law there is an order of payment.
Payroll (as you mentioned in the AIG case) and taxes are first,
Secured lien holders are second.
Unsecured lien holders – which includes pension obligations - are third.
Stock holders are last.
Obama jumped the pension obligation ahead of the secured lien holders. There was no legal reason for this and it was wrong.
If you think the order of payment is wrong then get the law changed. Don’t retroactively change the rules because you have political debts to pay off.
Agreed: The moment something gets "too big to fail" is the moment it should be forced to fail/split.
Nothing should be that large.
I've always felt that was the prime failing of capitalism: it's terribly at dealing with gigantic entities that eat up their market.
As we know, the law and lawyers are weaselly things.
I'm glad that people (the union) were put as a higher priority.
As for changing the law, we also know that our politicians are captive to the capitalist class so it's unlikely they will do anything against their masters.
I don't read your sig. Why are you reading mine?
how intertwined the supply chain is.. a GM failure would have been complete chaos all down the line.
Many of the suppliers to the auto parts industry supply more than one brand but losing, say, 20% of your business overnight would have shut them down.
It would have been a cascading failure of the whole industry without intervention.
Anyone saying "oh well a startup would take their place" obviously has no clue how long it takes to get these programs off the ground and running.
Um, this started under GWB -- it's even in the summary.
I think this is entirely misleading. June 1, 2009 was when GM filed for Bankruptcy protection. The terms of their bankruptcy and government bailout investments were largely negotiated in the months immediately before that during the Obama administration.
The Wall Street Bailouts happened under the Bush administration (just with the support of Senator/Candidate/President-Elect Obama).
By comparison, the bankruptcy restructuring and government investments in GM and Chrysler were relatively smooth because they essentially used well established bankruptcy law to perform the restructuring. But I recall the debate at the time, it took a big political fight to prevent just another Wall Street style bailout.
Thank goodness we spent all that money saving 600,000 pensions. Why can't we ever just use the 10 billion to pay the pension and let a dead weight company fall? Heaven forbid we try to bailout out the wagon wheel making companies.
Debt hasn't mattered since the beginning of human history either, so govt can spend on entitlements, stimulus, free public wifi etc. Solon of Athens started the Golden Age with the seisachtheia laws which forgave all debts. The Jews had the Jubilee. Reagan proved deficits don't matter.
Now GM can pay out dividends to share holders and escape those pesky salary caps on executives.
Which sections of government did Obama create? I'm assuming you meant Homeland Security for Bush.
You're confounding the auto industry bailout with the financial industry bailout, probably intentionally. Since the argument here is whether the estimated savings from bailing out the auto industry were worth the price, the amount of the financial industry bailout isn't relevant.
You seem to be implying that the amount spent in the financial industry bailout was completely wasted, but don't provide any supporting argument. And I also read somewhere that most of the financial industry bailout was not spent in the conventional sense, but was guarantees, but since you're just making some offhand argument, I won't bother digging that up.
By definition, trolls intentionally get it wrong so as to evoke a smug response.
Why is it so hard to only have politicians for a few years, then have them go away?
Because their bodyguards keep getting in the way? ;-)
And what of all the share holders that got screwed over and shafted? They didin't get a bailout, even though they had invested money into the company.
So, this video now becomes either a comedy sketch, or a sad commentary about crony capitalism... https://www.youtube.com/watch?v=oUIP9NGsH9o
www.facebook.com/DareDefendOurRights
www.fairtax.org
Obama jumped the pension obligation ahead of the secured lien holders. There was no legal reason for this and it was wrong.
The secured lien holders are the ones that refused a debt-for-equity swap, providing for partial repayment, preventing restructuring and and forcing GM into bankruptcy. Here is an account of this in that left-wing rag the Wall Street Journal.
The assertion that there was some sort of violation of law is flatly untrue. See for example: Stephen J. Lubben, "No Big Deal: The GM and Chrysler Cases in Context", 83 Am. Bankr. L. J. 531, 533-34 (2009). The disposition of assets was well within the authority of the bankruptcy judge.
Political factions that despise labor of course are upset that the workers didn't get screwed out of their jobs and pensions, as usual, but dressing this preference up in legal garb is fraudulent.
Even bankruptcy lawyers who would prefer to have seen workers thoroughly shafted admit that the bankruptcy was handled in a fully legal manner: Bankruptcy Law Review.
Starships were meant to fly, Hands up and touch the sky - Nicky Minaj
> 'We will always be grateful for the second chance extended to us and we are doing our best to make the most of it,' says GM CEO Dan Akerson.'
If you want to make the most of it, pay us back our $10B.
> 'Today is not dramatically different from the hundreds of preceding days during which we have worked to make GM a company our country can be proud of again.'"
Again, we will be proud of you AFTER you pay us back our $10B.
Summary says this was done to preserve pensions. That really advocates for a nation-wide public pension system, just like EU countries have. If some random company or city goes bankrupt while other companies and cities thrive, then there no money problem for pensions, provided the system is not segmented the way it is in US.
You're hiding behind the "law" just like the cops do. No one here is buying your argument. The workers SHOULD get paid first. All those 1%ers ignore the fact that you paid this guy $7/hr to make your widget, worked him 70hrs/wk to do it, and possibly injured him in the process but fuck them ME, MYSELF, & I (the owner) is the one who worked HIS ass off to make that eleventy billion dollars. Bullshit! There is a saying "standing on the shoulder of giants" but what these assholes do is "Stand on the broken bodies of the used and exploited" You keep hiding behind your stupid law, which was lobbied to fuck the little guy obviously, and while you're at it, choke on a bag of baby dicks.
I promise you, the things that Romney got caught saying about the rest of us cattle are light sears compared to the volcanic eruptions the Bush family have been quoted on saying. Hell, it's almost all online, just use any search engine.
Hear GWB himself discussing the auto bailout.
http://www.youtube.com/watch?v=1N5kRVfmMoE
Okay, you are right. I had forgotten about the loan that Bush made from the bailout funds to keep them from going through a disorderly bankruptcy in December 2008.
The thought that others have to work so others can have a big screen LCD while on welfare is a problem.
When a majority of the population can impose taxes that do not effect them upon a minority of the population there will be failure.
Why is it so hard to only have politicians for a few years, then have them go away?
Taxpayers pay for a bail out and the jobs went to China...
Sigh, I could be convinced bailouts might have been a good thing if it hadn't come out that 7 out of every 10 Chevrolet automobiles built are manufactured in China.
This video says it all... the 70% of GM cars being built outside the U.S. is a direct quote from CEO of GM.
https://www.youtube.com/watch_popup?v=Lvl5Gan69Wo
NRRPT/RCT
The government should not have allowed mergers into just 3 companies anyhow. If there were say 7 or so car companies, then one or two failing wouldn't topple the whole north.
100% agree. If something is "too big to fail," then it's too big to be allowed to exist in its current form. We seem to be ok at handling that first part, but the second is just as necessary.
Let's see, Reps and Dems differ on... Gay marriage. Health insurance for people with pre-existing conditions. Tax reduction for the wealthy. Collective bargaining rights for government employees. High-powered firearms for everybody without background checks. International cooperation vs confrontation. I could go on for a while.
All cosmetic issues? Seriously?
O.K., the majority think that the GM bailout was a good thing, came with the giant banking bailouts etc., all based on the U.S. business thinking of "Buy it now...pay for it later....it worked well for years & quite frankly its why the U.S. became THE WORLD POWER, but we're slipping a little here's why. PURE GREED, LAWYERS & some UNIONS. We have long since done away with the protections we had set up to protect many well run competitive Industries, our Press, Our Healthcare, Our Banking & Our Credit Companies. As a result, we are today a nation run By "BIG", and all because of Lawyers who kept surrepticiously creating NEW LAWS which allowed this to happen because as STUPID VOTERS, which the majority of are, we kept electing Politicians who were basically Lawyers.
Getting back to the GM thing for a moment, Gov't Bailed it out & where did GM go to avoid sharing a ton of it with the Union....CHINA....80% of that money went there, Design & Construction...Ha!..Ha!...(That's what he Legal advice recommended).
Allied Bank still owes money from the GM bail out. Look forward to more losses.
Cry more, liberturdian. There's a reason nobody educated or in positions of power will ever take your ideas seriously;
What makes you think libertarians give a flying fuck about being "taken seriously" by fucking idiots like you?
it's because they're fucking terrible and would wreck the economy. If you don't like it go live in Somalia, libertarian paradise.
I got a better idea: you go to Somalia, and get the fuck out of my country. This is a free nation. Capitalism is what we practice here. If you want socialism or any other system of economic slavery, then go fuck yourself with a sword.