Hard Light Productions Forums
Off-Topic Discussion => General Discussion => Topic started by: Kosh on December 06, 2008, 07:42:51 pm
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More rewards for failure (http://www.reuters.com/article/ousiv/idUSTRE48Q2WI20081001)
Here is what is amazing, GM has been saying they can work on new fuel efficient cars, but in reality the government had a program in the 90's that would have them do exactly that ( this (http://en.wikipedia.org/wiki/Partnership_for_a_New_Generation_of_Vehicles), except with the help of federal research labs. The automakers didn't want to do it, so they dragged their feet until Bush got into office, then told him to cancel it (which he immediately did), and then threw away everything they had worked on. Fast forward a few years now that oil prices have gone up and gas guzzling vehicle sales have plummeted, and now they are asking the government to bail them out, even though they had already wasted 8 years and millions of taxpayer dollars.
EDIT: Here is an excerpt from wikipedia about the original research program:
The Partnership for a New Generation of Vehicles was a cooperative research program between the U.S. government and major auto corporations, aimed at bringing extremely fuel-efficient (up to 80 mpg) vehicles to market by 2003. The partnership, formed in 1993, involved 8 federal agencies [1], the national laboratories, universities, and the United States Council for Automotive Research (USCAR), which comprises DaimlerChrysler, Ford Motor Company and General Motors Corporation. On track to achieving its objectives, the program was cancelled by the Bush Administration in 2001 at the request of the automakers, with some of its aspects shifted to the much more distant FreedomCAR program.
We could have owned the japanese with this......
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Bail them out now, fire the management later. Get new folks that'll focus on fuel effeciency and hope for the best afterwards.
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I don't think that the U.S. Government can legally fire the managers of a company.
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Depends on how you define legal...
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Depends on what kind of strings they attached to the money. But realistically, you've gotta hope the shareholders take a chunk out of the boards of these companies after massive screwups like they've demonstrated for the past, well, decade or so.
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I wouldn't count on too many strings being attached. Besides, these guys are going to say just about anything to get the money.
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The frakkin' Repubs rant and rave about the evils of socialism and then refuse to allow capitalism to work properly.
If US automakers can't run their goddamn business, then Americans are going to go elsewhere for their automobile purchases.
The bailout is to prevent the job losses that would come out of all these failed big businesses.
Unfortunately, we are now basically so worried about massive unemployment that we are paying people to work useless jobs in failing businesses with tax money.
*Hopefully* Obama's FDR-esque policies (http://www.politico.com/news/stories/1208/16258.html) will put an end to the bailouts.
(Of course you know everyone will be racing to get their free money before Bush is out of office...)
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Trouble is right now the economy is so fragile the whole world over that if one of the big automakers goes down...and I mean goes down hard...then the rest are going to be hurting for years to come such will be the economic impact. Things are starting to get really bad and the ripples are heading outwards at a tremendous pace.
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Maybe it's just me, but the bailout seems to be not happening, and the papers are saying it's getting fainter still.
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Maybe it's just me, but the bailout seems to be not happening, and the papers are saying it's getting fainter still.
What do you mean?
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Depends on how you define legal...
Depends on what you mean by 'firing' too.
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Letting these companies fail right now would seriously cripple if not America's, then Michigan's economy (if Michigan's economy can be more crippled than it already is). As none of you are evidently aware, failure of GM pretty much ensures that Michigan won't be recovering anytime soon. (By that, I mean until Oil runs out and the rest of the world is in such bad shape that Michigan would seem relatively average)
I don't know enough about economics to know if the correct thing to do is the bailout itself, but I do know that we can't let at least GM fail just quite yet.
Of course, it's not like anyone ever cared about Michigan anyway, so I don't expect any of you to care.
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Trouble is right now the economy is so fragile the whole world over that if one of the big automakers goes down...and I mean goes down hard...then the rest are going to be hurting for years to come such will be the economic impact. Things are starting to get really bad and the ripples are heading outwards at a tremendous pace.
Let it crumble.
The global financial system is in such a shambles that governments are going to feel like the proverbial little Dutch boy trying to plug the dykes with their fingers until they run out of digits... and then the collapse isn't going to be controlled, it's just going to happen.
Capitalism only works if businesses are forced to deal with the consequences of their actions. Right now we appear to be living in a fairy tale where it doesn't matter how badly you screw up, Big Brother is going to come along and make it all better for you. There are ZERO consequences for screwing up your business right now, as should be more than evident from the large bonuses the corporate higher ups at places like Freddie and Frannie got despite running their respective institutions into bankruptcy.
Again... let the system crumble. It's time for a "readjustment."
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Letting these companies fail right now would seriously cripple if not America's, then Michigan's economy (if Michigan's economy can be more crippled than it already is). As none of you are evidently aware, failure of GM pretty much ensures that Michigan won't be recovering anytime soon. (By that, I mean until Oil runs out and the rest of the world is in such bad shape that Michigan would seem relatively average)
I don't know enough about economics to know if the correct thing to do is the bailout itself, but I do know that we can't let at least GM fail just quite yet.
Of course, it's not like anyone ever cared about Michigan anyway, so I don't expect any of you to care.
It's not just a domestic issue. GM and Ford have a huge presence world-wide. How are Chrysler doing nowadays, btw ?
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Supposedly Ford is doing comparatively well
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The global financial system is in such a shambles that governments are going to feel like the proverbial little Dutch boy trying to plug the dykes with their fingers until they run out of digits... and then the collapse isn't going to be controlled, it's just going to happen.
Capitalism only works if businesses are forced to deal with the consequences of their actions. Right now we appear to be living in a fairy tale where it doesn't matter how badly you screw up, Big Brother is going to come along and make it all better for you. There are ZERO consequences for screwing up your business right now, as should be more than evident from the large bonuses the corporate higher ups at places like Freddie and Frannie got despite running their respective institutions into bankruptcy.
Again... let the system crumble. It's time for a "readjustment."
Exactly. And, on top of it all, the government is spending hundreds of billions in money it DOES NOT HAVE. We're already near to $10 trillion in debt, and spending hundreds of billions on a number of futile wars on inanimate objects/concepts/etc. (drugs, terror, poverty, etc.).
For some reason, the majority of our elected officials don't understand basic math. Or the concept of a limited amount of money.
The answer is not to just give cash to businesses and people when they're in trouble.
The market economy is cyclical. We have booms and busts. It happens. But the longer we try to prop up failing businesses just because they're huge, the bigger the fall is going to be when everything collapses at once.
The government's imaginary money has to come from somewhere, you know. All credit has to be paid eventually, and if it can't be, you end up with the domino effect that created the ****ing Great Depression in the thirties.
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The government's imaginary money has to come from somewhere, you know. All credit has to be paid eventually, and if it can't be, you end up with the domino effect that created the ****ing Great Depression in the thirties.
That would be Japan, China and the OPEC countries.
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And they're going to be ****ed if they need that money in the future, because we don't have the money to pay them back.
EDIT:
(http://www.globalresearch.ca/articlePictures/bailouttable.jpg)
So, you know, the $3,200,000,000,000 already spent is just 37.6% of what the government has appropriated.
Ain't that just super?
March 11: The Federal Reserve announces a rescue package to provide up to $200 billion in loans to banks and investment houses and let them put up risky mortgage-backed securities as collateral.
March 16: The Fed provides a $29 billion loan to JPMorgan Chase & Co. as part of its purchase of investment bank Bear Stearns.
July 30: President Bush signs a housing bill including $300 billion in new loan authority for the government to back cheaper mortgages for troubled homeowners.
Sept. 7: The Treasury takes over mortgage giants Fannie Mae and Freddie Mac, putting them into a conservatorship and pledging up to $200 billion to back their assets.
Sept. 16: The Fed injects $85 billion into the failing American International Group, one of the world's largest insurance companies.
Sept. 16: The Fed pumps $70 billion more into the nation's financial system to help ease credit stresses.
Sept. 19: The Treasury temporarily guarantees money market funds against losses up to $50 billion.
Oct. 3: President Bush signs the $700 billion economic bailout package. Treasury Secretary Henry Paulson says the money will be used to buy distressed mortgage-related securities from banks.
Oct. 6: The Fed increases a short-term loan program, saying it is boosting short-term lending to banks to $150 billion.
Oct. 7: The Fed says it will start buying unsecured short-term debt from companies, and says that up to $1.3 trillion of the debt may qualify for the program.
Oct. 8: The Fed agrees to lend AIG $37.8 billion more, bringing total to about $123 billion.
Oct. 14: The Treasury says it will use $250 billion of the $700 billion bailout to inject capital into the banks, with $125 billion provided to nine of the largest.
Oct. 14: The FDIC says it will temporarily guarantee up to a total of $1.4 trillion in loans between banks.
Oct. 21: The Fed says it will provide up to $540 billion in financing to provide liquidity for money market mutual funds.
Nov. 10: The Treasury and Fed replace the two loans provided to AIG with a $150 billion aid package that includes an infusion of $40 billion from the government's bailout fund.
Nov. 12: Paulson says the government will not buy distressed mortgage-related assets, but instead will concentrate on injecting capital into banks.
Nov. 17: Treasury says it has provided $33.6 billion in capital to another 21 banks. So far, the government has invested $158.6 billion in 30 banks.
Nov. 23: The Treasury says it will invest $20 billion in Citigroup Inc., on top of $25 billion provided Oct. 14. The Treasury, Fed and FDIC also pledge to backstop large losses Citigroup might absorb on $306 billion in real estate-related assets.
Nov. 25: The Fed says it will purchase up to $600 billion more in mortgage-related assets and will lend up to $200 billion to the holders of securities backed by various types of consumer loans.
Okay, this post is too long now.
link (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/26/MNVN14C8QR.DTL)
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*twiddles thumbs and waits for government to bail out unemployed psycho freespace modders*
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*twiddles thumbs and waits for government to bail out unemployed psycho freespace modders*
Maybe if you paid people who do work here and produced something that was an economic staple.
See, 'cause, us 'Murikins -need- our trucks 'n SUVs 'n ****. We -need- 'em. Despite the fact that most of us travel more than 15 miles from home less than once per month.
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The Prime Minister of England pledges support for pick and mix sweet and general junk you don't need retailer, Woolworths.
http://news.bbc.co.uk/1/hi/business/7751714.stm
This is way past ridiculous. Why the hell aren't we on the streets about this? Out taxes should not go towards bailing out failed companies! That's not the illusion of capitalism we all bought into!
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This is way past ridiculous. Why the hell aren't we on the streets about this?
A massive number of people are connected to these companies by way of being:
A) directly employed by (working for) them.
B) indirectly employed by (working for companies which rely on) them.
C) dependent upon the above.
D) related to/friends with the above.
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And?
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I guess the government think it's better to bail them out than to have to pay unemployment benefit for 30,000 people over the Christmas period.
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My dad works on automotive stuff. But GM is only one employer of the company he works for.
The biggest employer of his company is the U.S. Army. :D
His companies not going out of business any time soon.
BTW, I don't think it's automotive stuff in itself, he's working on coding diagnostics suites for vehicles. Like you can plug it into a car and the car will tell it what's broken in the car.
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And?
And so the rest of us aren't directly affected. It's not like they're coming and taking money from you and giving it to the companies. They're taking money they already got from you and...
Well, actually, wait. There's not actually any money.
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It's an excellent realization to make.
Once you realize that the US economy doesn't make any sense and should fail at any time, it's a lot less frightening.
kinda.
It's like watching something hover above the ground.
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I guess the government think it's better to bail them out than to have to pay unemployment benefit for 30,000 people over the Christmas period.
Yeah best to wait for the January sales when everything's cheaper....
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The Prime Minister of Britain pledges support for pick and mix sweet and general junk you don't need retailer, Woolworths.
http://news.bbc.co.uk/1/hi/business/7751714.stm
This is way past ridiculous. Why the hell aren't we on the streets about this? Out taxes should not go towards bailing out failed companies! That's not the illusion of capitalism we all bought into!
Fixed, pay attention.
I guess the government think it's better to bail them out than to have to pay unemployment benefit for 30,000 people over the Christmas period.
Indeed. If any of the big three went under in the current climate, all this talk of the great depression would start to have a certain resonance with the US public.
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Back on topic!
(http://1.bp.blogspot.com/_YI44i-cR4GI/SUGeb-Oe0nI/AAAAAAAACjg/GtQfFUAeEso/s1600/bailout)
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These automakers shouldnt get a dime of tax payer money to subsidize their failed business model, or the unions they employ at rates that are uncompetitive with foreign automakers that employ Americans.
Bankruptcy wont wipe out the company. It is the best option for them to take. The only one that will be viable. The government coming in and essentially nationalizing them isnt going to work. They are going to place all these demands on what kind of cars, how big, fuel efficiency etc. that will hamper their ability to be a successful company again.
Why should I, a taxpayer, subsidize some joe six-pack's union wage and job just because he works for a failing company? There is no such thing as 'too big, too economically important to fail' folks.. it happens all the time yet the world is still here. If anything, subsidizing the failure prevents those who compete against them with successful models from becoming stronger.
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If you don't mind going back to a barter system you might be correct, however, I value the ability to have a job, get money, and have places to spend that money.
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Was the bailout vetoed? I heard that it didn't get approval.
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The government coming in and essentially nationalizing them isnt going to work.
That's the most ridiculous thing about this whole nonsense. The government isn't even nationalising them. It's bailing them out but getting very little in return.
At least when the British government bailed out Northern Rock the tax payers got something out of it.
In a case like that I don't have a problem with a bail out. It solved a lot of problems for account holders with NR and in the end the tax payer won't end up losing money. Hell, we might even make a long term profit on it cause we basically paid to nationalise a fairly big bank for a comparatively low sum.
The problem comes when you're propping up businesses that are going to lose you money because not only is their profit model flawed but the tax payer isn't actually getting anything out of it which will equal the money they put in.
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The government coming in and essentially nationalizing them isnt going to work.
That's the most ridiculous thing about this whole nonsense. The government isn't even nationalising them. It's bailing them out but getting very little in return.
At least when the British government bailed out Northern Rock the tax payers got something out of it.
In a case like that I don't have a problem with a bail out. It solved a lot of problems for account holders with NR and in the end the tax payer won't end up losing money. Hell, we might even make a long term profit on it cause we basically paid to nationalise a fairly big bank for a comparatively low sum.
The problem comes when you're propping up businesses that are going to lose you money because not only is their profit model flawed but the tax payer isn't actually getting anything out of it which will equal the money they put in.
I've noticed this as well. The Americans are so scared of anything that even looks vaguely like socialism that they'd rather give money away than, shock horror, nationalize something. It's funny, in a sad sort of a way.
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I've noticed this as well. The Americans are so scared of anything that even looks vaguely like socialism that they'd rather give money away than, shock horror, nationalize something. It's funny, in a sad sort of a way.
The plan is to have the government take a minority share of the company and have a 'car czar' appointed by the president. So its not full out 100% government ownership but its still a foot in the door of a private corporation. Us Americans dont want nationalization because we know the government cant run **** right (read: katrina, fannie mae, freddie mac) and they dont have the constitutional authority to do this. They will assert that authority in doing this if the supreme court doesnt challenge it.
Another thing that bothers me is the whole "If we dont bail them out the economy is going to collapse!! Its urgent! We MUST bail them out!" Yeah well that was the premise of the whole 700 billion dollar bailout. Yet none of the money has yet to go to the original purpose of the bailout, or very little. The bill was loaded with pork, and the false urgency was just another way to scam the american people into accepting it.
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The government coming in and essentially nationalizing them isnt going to work.
That's the most ridiculous thing about this whole nonsense. The government isn't even nationalising them. It's bailing them out but getting very little in return.
At least when the British government bailed out Northern Rock the tax payers got something out of it.
In a case like that I don't have a problem with a bail out. It solved a lot of problems for account holders with NR and in the end the tax payer won't end up losing money. Hell, we might even make a long term profit on it cause we basically paid to nationalise a fairly big bank for a comparatively low sum.
The problem comes when you're propping up businesses that are going to lose you money because not only is their profit model flawed but the tax payer isn't actually getting anything out of it which will equal the money they put in.
I have to disagree with you on Northern Rock. Not becase I felt it should fail, far from it, but because the Virgin Group had a very compelling bid package ready within months of the cracks starting to show - but because the government wasted so much time, and the press misinterpreted the numbers (making it looks like Virgin would make millions at the taxpayers expense) the bid fell through.
For a period of time NR was still viable as a non-nationalised entity - but the window of opportunity to ensure it's continuaton as such was missed.
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I don't disagree with you to be honest. My point was that at least the taxpayer didn't get screwed over NR.
Us Americans dont want nationalization because we know the government cant run **** right (read: katrina, fannie mae, freddie mac)
:lol: I always love this sort of comment. It's almost as if you believe the companies were doing a good job running themselves in the first place.
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We don't in the least. But in many of our minds, giving them the ability to fail on their own is far more valuable than saying that the government can just step in at the drop of a hat and scoop them up. It may be hard to understand on the other side of the Atlantic, but your average American citizen, even many of those who consider themselves on the "liberal" side of the aisle, would never accept that sort of model, and you can trace the reasons for that sentiment back to the means by which the country was founded.
That being said, I am in favor of some sort of limited financial aid until they can get themselves restructured, provided there are plenty of significant strings attached to it. But with the Senate bill failing to garner nearly enough votes, who knows where things go now.
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I personally think that the US government could learn a lot from the Europeaon systems of government and economy.
I don't fear socialism. It angers me though when the government looks at all the poor normal people and says "You'd better work hard - it's capitalism" whilst giving large amounts of money to the multi-billion dollar corporations. Capitalism for the poor and socialism for the rich.
I loath the capitalist-consumerist and expansionist fiasco that many over here are virtually brainwashed to, and everyone is at least partially involved in. I'd really love to see the US become a net producer, rather than a nation slowly succumbing to debt owed to China, all over cheap ****.
And I live in Colorado. :wtf:
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Exactly. Since when was the US founded on a system where the government would bail out corporations and not give a stuff about everyone else?
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It wasn't. And I never said I wanted it to be that way. I'd much rather have some sort of loan availability across the board as a fallback, provided it was properly and responsibly managed.
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This might be semantics, but if government gives a company a loan, then the company is partly owned by the government, at least in my eyes. That is nationalization without saying the n-word.
I think there are no grey shades in this thing. Either government owns a part of company or it doesn't.
Mika
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Yeah but they're only owned by the government until they pay back the loan. If the car companies can become viable, they pay back the loan and go on. In an ideal economy the credit system wouldn't be so tight and the companies wouldn't be having so much trouble right now. In an ideal economy, we could afford to let one or even two of them go bankrupt and allow them the chance to restructure, and in the end probably bring back a lot of the workers they laid off, and a lot of the others would not have too much trouble reentering the workforce in other places. But with unemployment being at its worst in decades, the banks refusing to loan money, etc, it just doesn't seem like we can handle this kind of fallout right now.
Then you have the lies spreading on both sides of the table. The media blames the UAW for the cost to employ factory workers, and to some extent they're right, but the $72/hour figure they're throwing around is grossly inaccurate (GM had printed this in some anti-union material but later retracted the figure, without providing a new one). I've yet to be able to find the correct figures for certain for both Toyota and the Big 3 averages, but the $72 figure includes costs of retired employees spread across the active ones. However, even the UAW claims that it has managed to elevate the status of its members from the lower class, through the middle class and into the upper middle class, even those with only a high school degree. That's bull****. No company should be expected to provide its main work force that kind of prosperity.
But you can't just point the blame at them. The management and decision makers have failed again at reading the market and providing people with what they want, or at least convincing the public that's what they're doing. You don't even have to actually do it, you just have to start a better marketing campaign than your competition. If you ask me, they need to hire AB's brand-building team (now that Brito and InBev will probably be getting rid of them) and get to work at changing their image in the public's eye. Instead, they just allow this belief that all they do is build gas guzzlers, and let people go on thinking that they are becoming increasingly irrelevant in both the national and world market. It shouldn't be that way. No, we'll just fly into Washington on our expensive jets, flashing the fact that we make 6 times more money than the typical Japanese CEO and have the audacity to ask for more money.
So you see, I have a hard time even coming to an opinion on this matter. I thought I knew what I wanted the other day, and the more I read, the more I feel almost sorry for our politicians. The only real thing I can think of that matters is, do you think the car companies can become viable enough again, to pay back any loan. If so, then give them what they need. If not, don't. You're just pissing on a bonfire then. The fact is though, even though the Senate Republicans have managed to stop its passage, Bush and friends are going to dig the money out of TARP anyway.
God, I almost feel like this post should have a bibliography.
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So you see, I have a hard time even coming to an opinion on this matter. I thought I knew what I wanted the other day, and the more I read, the more I feel almost sorry for our politicians. The only real thing I can think of that matters is, do you think the car companies can become viable enough again, to pay back any loan. If so, then give them what they need. If not, don't. You're just pissing on a bonfire then. The fact is though, even though the Senate Republicans have managed to stop its passage, Bush and friends are going to dig the money out of TARP anyway.
First semantics, if companies cannot pay back loan, what do they offer in return? If nothing, that isn't a loan. It is giving away money.
Otherwise, what you suggested is reasonable and is exactly what I would do. I would probably add the condition that the current management will be sacked in any case and new management would be elected by the company workers, but that's just me.
Mika
EDIT: What is it with "to" and "do" that I constantly write them in exactly the wrong way?
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I was just reading the auto bailout died in the senate.......so were there two different bailouts going on here?
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The bailout bill Congress was working on passed the House but died in the Senate. I think the administration is trying to put together some sort of stopgap measure on their own based on whatever previous bailout funds they have at their disposal, but I don't know where that's going.
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From my original article:
WASHINGTON (Reuters) - President George W. Bush on Tuesday signed into law a mammoth spending bill to keep the government running until early March 2009 that includes a $25 billion loan package for troubled automakers.
So he did sign something into law, part of it being a bailout for the automakers, so it looks like this was the stopgap.