Are the feds going to bailout Hostess like they did GM?

[fordman84]

Originally Posted by olympicoscar

If you don't work for or have any connections to them, I can agree. What about the housing industry? Maybe you don't work for them either.

But maybe you, or someone you know, was affected by the recession by losing their job through no fault of their own. Problems in other industries caused a large enough drop in profits that they were laid off. This, in-turn, leads to more layoffs.

It could have been worse. My mother's family survived on 5 dollars a week during the Great Depression. I don't want to experience that.

Throwing money at the problem and not fixing the root issue is what leads to major collapses. Let GM fail when they are first having a problem, or throw money at it while they continue to grow and hire and let them collapse LATER. Same with the housing issue. Just ripping the fucking bandaid off already. Do you want a ton of pain for a short term or a little pain for the rest of your life? We are on the little pain for the rest of your life path.

[olympicoscar]

Originally Posted by JuiceTheGator

This is retarded. Look you idiot, the bailout happened because the UAW forces workers to vote democrat (yes, they check on them) AND just that one union alone gave Obama over $4 million for his election.
That is why...and the ONLY real reason why...GM was bailed-out. Even Obie knows taking from profitable businesses to keep a POS like GM alive is not good business. Why don't you know that?
Once, We Would Have Called It a Scandal - HUMAN EVENTS

A lot of other companies were also bailed out. Forget the unions. Fannie Mae and Freddy Mack, a lot of banks and financial institutions. Their not unionized. Stop reading the garbage off the right wing websites and try thinking for yourself for a change. Do you think Bush gave a darn about the unions? Nada. Look who bailed out Fred and Fannie. Plus, neither has yet to repay a dime and both are broke again.

Republican economists made Bush aware that failure to bail out the 2 housing giants could cause a depression.

Why do you constantly fight the fact that people do, in many instances, take action for the good of the country?

[fordman84]

Originally Posted by olympicoscar

A lot of other companies were also bailed out. Forget the unions. Fannie Mae and Freddy Mack, a lot of banks and financial institutions. Their not unionized. Stop reading the garbage off the right wing websites and try thinking for yourself for a change. Do you think Bush gave a darn about the unions? Nada. Look who bailed out Fred and Fannie. Plus, neither has yet to repay a dime and both are broke again.

Republican economists made Bush aware that failure to bail out the 2 housing giants could cause a depression.

Why do you constantly fight the fact that people do, in many instances, take action for the good of the country?

I agree with you that no matter who is in office bailouts are handed out. Everyone wants votes.

But you make my point for me with Freddie and Fannie. Bail em out once, they will need it again. Let them go through a REAL bankruptcy, and they will have the chance to get their books in order. Bailouts for companies are like feeding a stray cat...

[olympicoscar]

Originally Posted by fordman84

Didn't you just say, in post #52, that pensions were a factor?


And yes, the quality of the product does matter. If it didn't then people would be buying the product and paying a price high enough to cover the costs. People aren't. So it does matter. The only way you could possibly say that it doesn't if there are no alternatives on a staple good. Your them/us only makes sense, to me at least, if you are speaking from a union standpoint.

If GM workers were laid off it would suck in the short term. High unemployment. But that is how a free market works. If you are paid more than you are worth, then you don't get paid anymore.

The pensions would have been picked up by the fed govt. The quality of the product has nothing to do with saving the automotive industry. The way you are putting it is a different question. Yes, GM and Chrysler would have sold more cars if the product was better. No argument there. However, it wasn't better and they didn't sell more. THEREFORE, the govt had to bail them out for reason previously stated, to avoid a possible depression.

Shutting down the automotive industry is not like closing Hostess. Consider a shopping mall. Which is worse, closing an anchor, like Macy's or Dillards, or shutting down Make a Bear and Joe's Novelty Shop.

[fordman84]

Originally Posted by olympicoscar

The pensions would have been picked up by the fed govt. The quality of the product has nothing to do with saving the automotive industry. The way you are putting it is a different question. Yes, GM and Chrysler would have sold more cars if the product was better. No argument there. However, it wasn't better and they didn't sell more. THEREFORE, the govt had to bail them out for reason previously stated, to avoid a possible depression.

Shutting down the automotive industry is not like closing Hostess. Consider a shopping mall. Which is worse, closing an anchor, like Macy's or Dillards, or shutting down Make a Bear and Joe's Novelty Shop.

GM does not equal the auto industry though. A big part of it, but that's how the cookie crumbles. There are plenty of other manufacturers to pick up the slack. There are any number of foreign automakers that are building plants in the US, this would have given them a much sooner "to market" avenue. Instead, the taxpayer gets put on the hook for something that isn't going to get better. Just delayed the inevitable which is GM coming back and asking for more, and this time they can say "but you did it once before, why not now?".

There should never be such thing as "too big too fail". If that is the case, then every company would be best served to go out and open as many stores as it can, hire as many people as it can, pay the most wages that can without any regard for how they plan to pay for it. Then they can simply send the bill the Uncle Sam with a huge number of potential layoffs if the bill isn't paid.

[olympicoscar]

Originally Posted by fordman84

When there is a demand, it IS an easy entry business. Who is to say that a NEW company needs to start up. There is a plant with an available workforce. Maybe Toyota comes in and rehires the workers.

No, I'm not affected if GM goes out of business, not directly. I'm not sure how that matters in the slightest. Would it suck for a lot of people if GM went under? Sure. But the alternative is to basically make them a welfare company where money from an outside source is needed just to keep their doors open. That's BS. Fire them all and let them reapply for jobs at a rate that be sustained.

And I never compared slavery to jobs. I never even brought up slavery. Your reading comprehension is either total shit or you are purposely throwing a red herring because you know the stance you have taken is pure and total bullshit. I simply made a reference to something that YOU BROUGHT UP and how just because it is written or not written...doesn't make it right.

Easy entry refers to how hard it is to start a company. Electric companies are allowed to have a monopoly, a controlled monopoly, because it is extremely hard to start an electric company compared to say, a candy shop.

Helping out GM, this one time anyone, helped to avert a possible depression and has allowed them to be profitable for the last 2 years. We've aided farmers, poor people, and students for years. This is the least we could do for an American institution and an institution that if allowed to fail could have had catastrophic results.

You mentioned voting, not slavery, my error. I apologize. Not allowing voting was morally wrong. Bailing out a company or companies in this interest I believe was good for the country.

[olympicoscar]

Originally Posted by fordman84

Throwing money at the problem and not fixing the root issue is what leads to major collapses. Let GM fail when they are first having a problem, or throw money at it while they continue to grow and hire and let them collapse LATER. Same with the housing issue. Just ripping the fucking bandaid off already. Do you want a ton of pain for a short term or a little pain for the rest of your life? We are on the little pain for the rest of your life path.

We allowed the banks to collapse in 1929. You see the results. We were trying to avoid the same thing happening again.

[fordman84]

Originally Posted by olympicoscar

Easy entry refers to how hard it is to start a company. Electric companies are allowed to have a monopoly, a controlled monopoly, because it is extremely hard to start an electric company compared to say, a candy shop.

Helping out GM, this one time anyone, helped to avert a possible depression and has allowed them to be profitable for the last 2 years. We've aided farmers, poor people, and students for years. This is the least we could do for an American institution and an institution that if allowed to fail could have had catastrophic results.

You mentioned voting, not slavery, my error. I apologize. Not allowing voting was morally wrong. Bailing out a company or companies in this interest I believe was good for the country.

I know what barriers to entry are and all of that. But large companies go out of business all the time. The profitable parts are picked up and carried on, normally with the same people running them but for a new company. The unprofitable "fat" is cut and everyone is better off for it.

Yes, we have bailed out others before and we will bail people/companies out in the future. There should ALWAYS be massive strings to get the bailout though, and a true Ch 11 should be step one. The gov't shouldn't act any different than any other bank or investor. That is they should just give money to keep the status quo. Make GM put forward a plan on how they will cut costs to get profitable THEN give them money. Of course this is the same gov't that can't get profitable itself, so they wouldn't have the moral authority to make that requirement.

[olympicoscar]

Originally Posted by fordman84

I agree with you that no matter who is in office bailouts are handed out. Everyone wants votes.

But you make my point for me with Freddie and Fannie. Bail em out once, they will need it again. Let them go through a REAL bankruptcy, and they will have the chance to get their books in order. Bailouts for companies are like feeding a stray cat...

Bush wanted to do just that. It was the economists that persuaded him that so much of the housing industry was tied up in those 2 companies that the results would be catastrophic. I have to believe that if that kind of money was spent on their bailout, 103 billion to Fannie and 65 billion to Freddie, that a lot more money and the lives of millions of people would have been negatively affected. BTW, neither of those 2 companies has repaid anything.

[fordman84]

Originally Posted by olympicoscar

We allowed the banks to collapse in 1929. You see the results. We were trying to avoid the same thing happening again.

True, but in the end the banking system came back stronger than ever. It was allowed to hurt in order to get its books right.

look at what Ford they did. They wanted a loan until they saw the strings attached. Then all of a sudden they said "nevermind, we can do this on our own" and they made their own cuts and got profitable. GM could have done the same, but they took the easy route.

I'm not even saying that GM shouldn't have gotten a loan, I just think it sucks. A real bankruptcy, where they sell assets and renegotiate contracts and all that fun stuff, should have been step one. Ch 11 is not the end of the company but a chance to fix yourself for the future. The loan slapped a bandaid on the problem and it will just be an issue when that loan money is gone and people start cutting back on things like new cars again.

[fordman84]

Originally Posted by olympicoscar

Bush wanted to do just that. It was the economists that persuaded him that so much of the housing industry was tied up in those 2 companies that the results would be catastrophic. I have to believe that if that kind of money was spent on their bailout, 103 billion to Fannie and 65 billion to Freddie, that a lot more money and the lives of millions of people would have been negatively affected. BTW, neither of those 2 companies has repaid anything.

I know, and I'm not defending W's bailouts. I know that there would have been a huge price to pay if those two failed or were allowed to falter even. But in the long run it would have been worth it.

Goes back to my saying: Do you want a lot of pain right now, or a little pain for the rest of your life? I say rip that bandaid off and lets get moving forward again.

[olympicoscar]

Originally Posted by fordman84

GM does not equal the auto industry though. A big part of it, but that's how the cookie crumbles. There are plenty of other manufacturers to pick up the slack. There are any number of foreign automakers that are building plants in the US, this would have given them a much sooner "to market" avenue. Instead, the taxpayer gets put on the hook for something that isn't going to get better. Just delayed the inevitable which is GM coming back and asking for more, and this time they can say "but you did it once before, why not now?".

There should never be such thing as "too big too fail". If that is the case, then every company would be best served to go out and open as many stores as it can, hire as many people as it can, pay the most wages that can without any regard for how they plan to pay for it. Then they can simply send the bill the Uncle Sam with a huge number of potential layoffs if the bill isn't paid.

The problem is that today, too many corporations HAVE gotten that big. This was not envisioned when the Constitution was written. Everything was on a small local basis. It was only after the Civil War that large corporations began to form though not at the level they are today.

Each situation must be looked at within the ongoing current situation. If GM had gone bankrupt in the 1960-80 years than I think they would have been allowed to go under. But with the present situation it was not in the best interests of the country.

Remember we also bailed out a lot of banks, financial institutions, insurance and investment fund companies. 2007-09 was one hell of a mess. A lot of people did what they thought was right and I for one agree with them.

I respect your opinion not to agree with me.

[olympicoscar]

Originally Posted by fordman84

I know, and I'm not defending W's bailouts. I know that there would have been a huge price to pay if those two failed or were allowed to falter even. But in the long run it would have been worth it.

Goes back to my saying: Do you want a lot of pain right now, or a little pain for the rest of your life? I say rip that bandaid off and lets get moving forward again.

The point you bring up is not one I can answer. I can't predict the long run. But you do make some good points.

[fordman84]

Originally Posted by olympicoscar

The problem is that today, too many corporations HAVE gotten that big. This was not envisioned when the Constitution was written. Everything was on a small local basis. It was only after the Civil War that large corporations began to form though not at the level they are today.

Each situation must be looked at within the ongoing current situation. If GM had gone bankrupt in the 1960-80 years than I think they would have been allowed to go under. But with the present situation it was not in the best interests of the country.

Remember we also bailed out a lot of banks, financial institutions, insurance and investment fund companies. 2007-09 was one hell of a mess. A lot of people did what they thought was right and I for one agree with them.

I respect your opinion not to agree with me.

Good points, but where did the bank bailouts get us? We still have a housing crisis and all of that. Maybe it kept us from anarchy, I can't see a rewritten past so I only have to go off my own gut and opinions.

And I get what you are saying about the times, but I bet if you were to add up all of the cars on the road as well as all the people employed directly and indirectly by they auto industry today and back in the 60's-80's you would see that GM is a smaller part of both the employees and the cars on the road today. Seems like there are actually more companies that would be able to step up and pick up the loss of GM today than back then. I could be wrong, but that is my feeling.

[olympicoscar]

Originally Posted by fordman84

Good points, but where did the bank bailouts get us? We still have a housing crisis and all of that. Maybe it kept us from anarchy, I can't see a rewritten past so I only have to go off my own gut and opinions.

And I get what you are saying about the times, but I bet if you were to add up all of the cars on the road as well as all the people employed directly and indirectly by they auto industry today and back in the 60's-80's you would see that GM is a smaller part of both the employees and the cars on the road today. Seems like there are actually more companies that would be able to step up and pick up the loss of GM today than back then. I could be wrong, but that is my feeling.

I think we've beaten GM into the ground, but I will say one thing about the banks. They paid back all the money they were loaned plus interest. GM is under 50% and Chrysler about 70% in paying back the loans.

[sayheykid1]

Originally Posted by Bone

Bush signed off on TARP, but the Obama Admin was the one to give money to GM.

"Under ordinary economic circumstances, I would say this is the price that failed companies must pay, and I would not favor intervening to prevent the auto makers from going out of business," the president said. "But these are not ordinary circumstances. In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action."

That was Bush in 2008.

[sayheykid1]

Originally Posted by JuiceTheGator

This is retarded. Look you idiot, the bailout happened because the UAW forces workers to vote democrat (yes, they check on them) AND just that one union alone gave Obama over $4 million for his election.
That is why...and the ONLY real reason why...GM was bailed-out. Even Obie knows taking from profitable businesses to keep a POS like GM alive is not good business. Why don't you know that?
Once, We Would Have Called It a Scandal - HUMAN EVENTS

How does the UAW check the ballots of its members and what would it do to them if they found out that they voted Republican?

Why did Bush push for a bailout?

[sayheykid1]

GM shouldn't have gotten into the banking business.

[Bone]

Just like I said before, the UAW was saved- not GM.

Romney op-ed: U.S. autos bailout 'was crony capitalism on a grand scale' | The Detroit News | detroitnews.com

[Bone]

Review & Outlook: The Other GM Bailout - WSJ.com

In a 2011 working paper, J. Mark Ramseyer of Harvard and Eric Rasmusen of Indiana University argue that by manipulating corporate tax rules by fiat, "Treasury gave the firm (and its owners, including the UAW) $18 billion more in assets." Thus a Democratic Administration gave "a massive tax benefit to one of the party's biggest supporters." The other problem is that the move put Ford and GM's other competitors at a disadvantage, as bailouts always do.