finknottle Posted June 1, 2009 Posted June 1, 2009 Help me with my math here... We are sinking $60 billion into GM. It it survives and is wildly successfull, we can expect to get the money paid back (with no interest) after about 60 years. That assumes no further investment, that GM can actually compete with the companies who know a thing or two about making good small cars, that it duplicates it's most successfull year from the past decade every year for 60 years, and that it can pay back a quarter of the profit with no ill effects. It ain't gonnna happen. We will be back throwing yet more good money after bad within a few years. I think there are at most 120,000 union employees. Why don't we just divide that $60 billion among them and be done with it? We cut them each a check for $500,000, tell them to vote democratic, and move on.
DC Tom Posted June 1, 2009 Posted June 1, 2009 Help me with my math here... We are sinking $60 billion into GM. It it survives and is wildly successfull, we can expect to get the money paid back (with no interest) after about 60 years. That assumes no further investment, that GM can actually compete with the companies who know a thing or two about making good small cars, that it duplicates it's most successfull year from the past decade every year for 60 years, and that it can pay back a quarter of the profit with no ill effects. It ain't gonnna happen. We will be back throwing yet more good money after bad within a few years. I think there are at most 120,000 union employees. Why don't we just divide that $60 billion among them and be done with it? We cut them each a check for $500,000, tell them to vote democratic, and move on. That $60B is buying the government 70% of the new company, which it expects to sell on the market within the next few years to recoup the bailout ("within the next year" is what I heard, but I have a hard time believing that as anything other than a pipe dream). So it's not a 60-year no-interest loan. And you can't just give each union employee $500k anyway, because the union will B word.
Live&DieBillsFootball Posted June 1, 2009 Posted June 1, 2009 Do you really think that letting GM go into liquidation was the best option? The bondholders would have gotten even less than they are getting in the bankruptcy. The entire automotive industry may have been in a world of hurt. Parts suppliers who not only supply GM but Ford, Toyota, Honda, etc, would have had a very slim chance of surviving a GM liquidation. Instead of 2,000 GM dealers being closed, all of them would have. Nobody seems to like the government investing $60 billion, but what would it have cost if the whole auto industry took a crap? GM will be able to fix some of their major problems: too many dealerships, legacy costs, too many brands, etc. Also, the 10 million unit US car market is forecast to climb back to 16 million units in the next 2 years. GM gets to dump tons of dead weight and IF their management learns from their mistakes, I feel that they can be a profitable company again. Probably much sooner than most people think, especially if the US auto market recovers as fast as some economists think. There have been a lot of new car purchases postponed in the last year from fleet sales (rental car companies and other businesses) to individuals who have decided to drive their cars longer. At some point, these vehicles will need replacement. GM will no longer have the largest market share, but a leaner GM can live off of a smaller slice of the auto market.
Max Fischer Posted June 1, 2009 Posted June 1, 2009 Help me with my math here... We are sinking $60 billion into GM. It it survives and is wildly successfull, we can expect to get the money paid back (with no interest) after about 60 years. That assumes no further investment, that GM can actually compete with the companies who know a thing or two about making good small cars, that it duplicates it's most successfull year from the past decade every year for 60 years, and that it can pay back a quarter of the profit with no ill effects. It ain't gonnna happen. We will be back throwing yet more good money after bad within a few years. I think there are at most 120,000 union employees. Why don't we just divide that $60 billion among them and be done with it? We cut them each a check for $500,000, tell them to vote democratic, and move on. Hear that? . . . . . . . . That's the sound of the Republicans keeping their mouths shut because if they were in power they'd do the same thing. It's not cool, it's not what anyone wants to do, but it needs to be done. It sucks, but GM's immediate demise may have set off an economic tidal wave. Do we know for sure? No, but did you really want to find out?
John Adams Posted June 1, 2009 Posted June 1, 2009 My wife and I were recently in the market for a new car. We both REALLY wanted to buy Americanin view of all the US auto pain. In particular, we wanted to buy from Ford, who seemed to be doing things better than GM and Chrysler. After literally months of reading reviews and test driving cars, we bought a 2009 Prius (for a song because it's a model change year) and ____ (something yet undecided but definitely not American). Why? We didn't like them. As long-time Honda and Toyota owners, I have had nothing but 100% reliability and great customer service. The US cars couldn't drag me away from that and their reliability, while improved, is still not as good as others. Also, frankly, we didn't like the US cars. If I was buying a truck, I might have considered more US options but in the sedan category, nothing appealed to me.
RLflutie7 Posted June 1, 2009 Posted June 1, 2009 My wife and I were recently in the market for a new car. We both REALLY wanted to buy Americanin view of all the US auto pain. In particular, we wanted to buy from Ford, who seemed to be doing things better than GM and Chrysler. After literally months of reading reviews and test driving cars, we bought a 2009 Prius (for a song because it's a model change year) and ____ (something yet undecided but definitely not American). Why? We didn't like them. As long-time Honda and Toyota owners, I have had nothing but 100% reliability and great customer service. The US cars couldn't drag me away from that and their reliability, while improved, is still not as good as others. Also, frankly, we didn't like the US cars. If I was buying a truck, I might have considered more US options but in the sedan category, nothing appealed to me. And you just summed up the problem with the US auto makers. I'd buy their top of the line trucks but not their cars. They have nothing that appeals to me either. If I were to buy a new car or truck, it would be a Honda Ridgeline or a Chevy Silverado, Tahoe etc. I don't like Toyota but I'd probably on buy their truck, but not the Camry.
stuckincincy Posted June 1, 2009 Posted June 1, 2009 Help me with my math here... We are sinking $60 billion into GM. It it survives and is wildly successfull, we can expect to get the money paid back (with no interest) after about 60 years. That assumes no further investment, that GM can actually compete with the companies who know a thing or two about making good small cars, that it duplicates it's most successfull year from the past decade every year for 60 years, and that it can pay back a quarter of the profit with no ill effects. It ain't gonnna happen. We will be back throwing yet more good money after bad within a few years. I think there are at most 120,000 union employees. Why don't we just divide that $60 billion among them and be done with it? We cut them each a check for $500,000, tell them to vote democratic, and move on. In the last 5 years or so, they cut 120,000 salaried employees. But no popular sympathy for them..
Magox Posted June 1, 2009 Posted June 1, 2009 Hear that? . . . . . . . . That's the sound of the Republicans keeping their mouths shut because if they were in power they'd do the same thing. It's not cool, it's not what anyone wants to do, but it needs to be done. It sucks, but GM's immediate demise may have set off an economic tidal wave. Do we know for sure? No, but did you really want to find out? The best option for GM has always been bankrupcty. It was just a few months ago where everyone was saying that if you let so and so bank go under, everything will fall to the wayside, those same people were saying that if we let GM and Chrysler go under the same thing would happen. Well, fast forward to today, and you see that many banks have gone under, GM and Chrysler are both going to bankrupcy court, and life still goes on. If you remember, Nardelli and Wagonner both said that letting these corporations go into bankruptcy would have dire consequences, well, look at them today, they have both filed for bankrupcy. The plan was never to let them go into bankruptcy in a disorderly fashion where everything would have to be liquidated. The best way to to go through Chapter 11 is in a orderly fashion. I have said this at least 1000 times in my life, if a company does not have the right business model to stay afloat, then they should just be aloud to fail. By bailing out companies with failed business models, you enable them to continue to have bad business models. I totally disagree with the notion that if GM and Chrysler ceased to exist that it would have dire consequences on the economy long term. Short term, there would be more job losses which would help exasperate the crisis we are in. But where this administration has it wrong is that they are looking for short term answers to solve long term potential disasters. This administration along with the Bush adm. used fear to sell their proposals. They would say that if we don't do what is needed like the TARP then this economy would spiral out of control. I don't buy it!! Where there is a demand for a product, there will be a supplier for that same product. I believe in that and No one can tell me different. If GM and Chrysler ceased to exist then Ford, Toyota, Honda or some company would of stepped up to the plate, bought out those idle or closed down auto plants when the time was right for them and we would eventually have the same amount of people working in the auto industry then what we will have now. Like I said, short term it would have had more negative consequences, but long term this would be the better solution. Why? For a few reasons, one, we wouldn't be enabling bad, failed business models to continue their practices and two, our national deficit. We as taxpayers are unwilling participants and forced to buy into a company that will never recuperate the investment the government made. I don't buy the BS that this administration tells me. I know that we won't be able to cut the deficit the way they say they will do. I don't buy that we will have a sustained 4% GDP growth, I don't buy that healthcare will be successfully reformed. They said they would bring change, well, change is what we got, but not the type of change that will serve this country right in the long term. I'm telling you, these decisions are going to set us back for a very long time. These policies that are being made today will result in slow growth and high inflation for the forseeable future. It's simple economics. We have relied on our spending power to pull us out of recessions, but the big difference this time is the enormity of the amount of debt that this nation is accumulating, and the lack of ability to be able to pay this debt down. This country needs a strong GDP and growth to pay this debt down, and it won't be there. Unemployment will be between 7 and 8.5% for the next decade. With unemployment that high, our tax receipts are going to go way down. This administration will make another dreadfully wrong decision and instead of lowering taxes, which is what they should do, they will raise taxes in a number of areas and they will have negative "unintended consequences" on this economy.
stuckincincy Posted June 1, 2009 Posted June 1, 2009 Hear that? . . . . . . . . That's the sound of the Republicans keeping their mouths shut because if they were in power they'd do the same thing. It's not cool, it's not what anyone wants to do, but it needs to be done. It sucks, but GM's immediate demise may have set off an economic tidal wave. Do we know for sure? No, but did you really want to find out? Waiting to hear from the Democrats, and Obama-Rama. Had they followed their own current advisor teams' advice to Japan in the '90s, instead of pumping in 100 billion dollars of newly-printed cash (debt) into GM for a 60% stake, they could have bought the whole corporation for under a mere billion dollars today. GM - now owned by government promises-to-pay, and the UAW. By all means, purchase a vehicle on the lots. New production...run by political appointees, conscripted civil service folks immune from being fired from performance, with the UAW calling some shots - calling those shots to a membership who had their wages and benefits slashed in half and more... I worked in the auto mfg. biz for a long time. Bon apetite...
Kelly the Dog Posted June 1, 2009 Posted June 1, 2009 The best option for GM has always been bankrupcty. It was just a few months ago where everyone was saying that if you let so and so bank go under, everything will fall to the wayside, those same people were saying that if we let GM and Chrysler go under the same thing would happen. Well, fast forward to today, and you see that many banks have gone under, GM and Chrysler are both going to bankrupcy court, and life still goes on. Most everything I have been hearing and reading about it say that they needed to prepare for the bankruptcy and get everything in order before it went this way, and that if it just immediately went into bankruptcy back in November it would have been a disaster. This seems to be a decent summation
StupidNation Posted June 1, 2009 Posted June 1, 2009 Hear that? . . . . . . . . That's the sound of the Republicans keeping their mouths shut because if they were in power they'd do the same thing. It's not cool, it's not what anyone wants to do, but it needs to be done. It sucks, but GM's immediate demise may have set off an economic tidal wave. Do we know for sure? No, but did you really want to find out? Well your optimism is a bit misplaced as pretty much 100% of Dems wanted a bailout, and 60% of Reps were against it. The Rs that voted for the bailout where minimal, it was mostly a Dem thing, although some Rs were for it. I'm not for any of it, and I'm not a R, although I do think Ron Paul is one R I'm with 98% of the time.
Magox Posted June 1, 2009 Posted June 1, 2009 Most everything I have been hearing and reading about it say that they needed to prepare for the bankruptcy and get everything in order before it went this way, and that if it just immediately went into bankruptcy back in November it would have been a disaster. This seems to be a decent summation They did need some time to put things into place, as I stated earlier : " The plan was never to let them go into bankruptcy in a disorderly fashion where everything would have to be liquidated. The best way to to go through Chapter 11 is in a orderly fashion. " The issue I have is the $50 Billion dollar we are pouring into the drain, and the fact that these companies have been provided a life preserver to continue a failed business models. I also believe they are screwing over the bond holders and giving major concessions to the UAW. The concessions that the UAW made were minimal, under the current deal, existing employees will not have their pay reduced or their health care benefits, oh wait, I remember reading that they won't be able to have Cialis or any other boner pill given to them for free, poor guys! Also, I am sure that the raw deal the government dictated against the bondholders will have further negative "unintended consequences" on any other investors that want to invest or buy into any of their government programs that they so badly need, like the "bad bank" or "toxic asset" plan they have. Once they realize that they are getting a muted response to the program they will have to sweeten the pot even further than what it all ready is, which btw is a total rip off for the US taxpayer under the statis quo plan. As of right now, we the taxpayer are going to finance up to 85% of the investment and assume 90% of the risk. OMG! are you freaking serious?
Magox Posted June 1, 2009 Posted June 1, 2009 Well your optimism is a bit misplaced as pretty much 100% of Dems wanted a bailout, and 60% of Reps were against it. The Rs that voted for the bailout where minimal, it was mostly a Dem thing, although some Rs were for it. I'm not for any of it, and I'm not a R, although I do think Ron Paul is one R I'm with 98% of the time. I am not a Ron Paul follower, even though I do agree with many of his economic principles he has, but I believe this guy is going to be very popular in the next election and could possibly be the president in the following election after the next one. I do believe that Obama will win the next election, just because of the blind enthusiasm that many voters have, and because of the unpopularity of the Republican party. This country was desperate for change in this last election, and they will be desperate for change 6-8 years from now. Ron Paul is the economic anthesis of what Barak Obama is. Barak Obama's economic fiscal conscience is almost non existant, his economic projections that he is conveying to us and soon enough people will realize it. Where Ron Paul is a fiscal hawk, and his plans may be somewhat unpopular but I believe they are better for this country for the long haul.
John Adams Posted June 1, 2009 Posted June 1, 2009 I am not a Ron Paul follower, even though I do agree with many of his economic principles he has, but I believe this guy is going to be very popular in the next election and could possibly be the president in the following election after the next one. I do believe that Obama will win the next election, just because of the blind enthusiasm that many voters have, and because of the unpopularity of the Republican party. This country was desperate for change in this last election, and they will be desperate for change 6-8 years from now. Ron Paul is the economic anthesis of what Barak Obama is. Barak Obama's economic fiscal conscience is almost non existant, his economic projections that he is conveying to us and soon enough people will realize it. Where Ron Paul is a fiscal hawk, and his plans may be somewhat unpopular but I believe they are better for this country for the long haul. Ron's biggest obstacle, besides his honesty, is that he's too old. The Libertarian way of thinking needs a few things to win at the pres level: (1) A new party that doesn't have as one of its biggest platforms: "legalize drugs." Even though I agree with that platform, it alienates too many people instantly. A compromise platform might be to legalize drugs less addictive than those already legal or something. (2) Get a young vibrant already popular leader who can grass roots organize. Some kind of libertarian-flavor of Obama. This person doesn't exist. (3) Willingness to compromise. This goes hand-in-hand with #1. Most Libertarians conveniently sit on a high horse and throw stones at big government and dumb spending But you can't get the job on day one and turn off all the spending spigots. The new libertarian party (which desperately needs a new name to lose its baggage) would need to have a surgical plan for what it wanted to accomplish. Maybe balance the budget in exactly this way: cut here, here, and here by X%, Y%, and Z%. Fix Social Security (with the goal of getting rid of it) by some plan (god knows what). Lower or flat tax with specific code. And on and on. But those pi-in-the-sky goals need to be tempered by the reality that things like social security can't just disappear starting tomorrow.
Magox Posted June 1, 2009 Posted June 1, 2009 Ron's biggest obstacle, besides his honesty, is that he's too old. The Libertarian way of thinking needs a few things to win at the pres level: (1) A new party that doesn't have as one of its biggest platforms: "legalize drugs." Even though I agree with that platform, it alienates too many people instantly. A compromise platform might be to legalize drugs less addictive than those already legal or something. (2) Get a young vibrant already popular leader who can grass roots organize. Some kind of libertarian-flavor of Obama. This person doesn't exist. (3) Willingness to compromise. This goes hand-in-hand with #1. Most Libertarians conveniently sit on a high horse and throw stones at big government and dumb spending But you can't get the job on day one and turn off all the spending spigots. The new libertarian party (which desperately needs a new name to lose its baggage) would need to have a surgical plan for what it wanted to accomplish. Maybe balance the budget in exactly this way: cut here, here, and here by X%, Y%, and Z%. Fix Social Security (with the goal of getting rid of it) by some plan (god knows what). Lower or flat tax with specific code. And on and on. But those pi-in-the-sky goals need to be tempered by the reality that things like social security can't just disappear starting tomorrow. very nicely put. I agree with just about everything you said, and yes you are right, that it is easy for the Libertarians to throw stones when they don't have hardly any power, of course if they were in a position of higher relevance it wouldn't be so easy to criticize the way they do, but they will need to something somewhat radical to propel them to the next level. I believe Obama's administrations spending spree will cause the next shift of power to be one of fiscal conservatism and that will probably serve as a good platform to launch off of.
/dev/null Posted June 1, 2009 Posted June 1, 2009 Ron's biggest obstacle, besides his honesty, is that he's too old. I doubt Ron runs in 2012 I think he's going to end up being a Goldwater type ideological icon
finknottle Posted June 1, 2009 Author Posted June 1, 2009 Ok, people don't seem to like the idea of placating union members with a $500k payoff as a way of buying their support, without leaving us on the hook for future. So how about this instead: we fork over the money, making the unions happy. To ensure the continued viability of the companies once they burn through that, and to keep from having to subsidize them again, we simply ban the import of foreign cars. Everybody wins!
Dante Posted June 2, 2009 Posted June 2, 2009 The best option for GM has always been bankrupcty. It was just a few months ago where everyone was saying that if you let so and so bank go under, everything will fall to the wayside, those same people were saying that if we let GM and Chrysler go under the same thing would happen. Well, fast forward to today, and you see that many banks have gone under, GM and Chrysler are both going to bankrupcy court, and life still goes on. If you remember, Nardelli and Wagonner both said that letting these corporations go into bankruptcy would have dire consequences, well, look at them today, they have both filed for bankrupcy. The plan was never to let them go into bankruptcy in a disorderly fashion where everything would have to be liquidated. The best way to to go through Chapter 11 is in a orderly fashion. I have said this at least 1000 times in my life, if a company does not have the right business model to stay afloat, then they should just be aloud to fail. By bailing out companies with failed business models, you enable them to continue to have bad business models. I totally disagree with the notion that if GM and Chrysler ceased to exist that it would have dire consequences on the economy long term. Short term, there would be more job losses which would help exasperate the crisis we are in. But where this administration has it wrong is that they are looking for short term answers to solve long term potential disasters. This administration along with the Bush adm. used fear to sell their proposals. They would say that if we don't do what is needed like the TARP then this economy would spiral out of control. I don't buy it!! Where there is a demand for a product, there will be a supplier for that same product. I believe in that and No one can tell me different. If GM and Chrysler ceased to exist then Ford, Toyota, Honda or some company would of stepped up to the plate, bought out those idle or closed down auto plants when the time was right for them and we would eventually have the same amount of people working in the auto industry then what we will have now. Like I said, short term it would have had more negative consequences, but long term this would be the better solution. Why? For a few reasons, one, we wouldn't be enabling bad, failed business models to continue their practices and two, our national deficit. We as taxpayers are unwilling participants and forced to buy into a company that will never recuperate the investment the government made. I don't buy the BS that this administration tells me. I know that we won't be able to cut the deficit the way they say they will do. I don't buy that we will have a sustained 4% GDP growth, I don't buy that healthcare will be successfully reformed. They said they would bring change, well, change is what we got, but not the type of change that will serve this country right in the long term. I'm telling you, these decisions are going to set us back for a very long time. These policies that are being made today will result in slow growth and high inflation for the forseeable future. It's simple economics. We have relied on our spending power to pull us out of recessions, but the big difference this time is the enormity of the amount of debt that this nation is accumulating, and the lack of ability to be able to pay this debt down. This country needs a strong GDP and growth to pay this debt down, and it won't be there. Unemployment will be between 7 and 8.5% for the next decade. With unemployment that high, our tax receipts are going to go way down. This administration will make another dreadfully wrong decision and instead of lowering taxes, which is what they should do, they will raise taxes in a number of areas and they will have negative "unintended consequences" on this economy. Best post ever. Only hope for these dinasaurs is to be forced to reinvent their business model and the only way that happens is if they fear losing everything. Just like the rest of us small business's out there. But you can't expect government to understand this. Living on the public tit and all where the money supply is never exhausted.
drnykterstein Posted June 2, 2009 Posted June 2, 2009 You have to admit, all his focus on the economy is paying off. Things are starting to get better.
Chef Jim Posted June 2, 2009 Posted June 2, 2009 You have to admit, all his focus on the economy is paying off. This are starting to get better. (Sorry Darin)
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