SirSaxa
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Post by SirSaxa on May 5, 2011 14:47:45 GMT -5
Thanx for all the timely links you consistently provide to the board. I've especially enjoyed the ones in the Bin Laden thread, also. Glad to know I'm not the only one who finds them interesting and that someone actually reads them!
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Post by jerseyhoya34 on May 5, 2011 17:40:00 GMT -5
When a CEO compares how many businesses received a bailout to how many proceeded to bankruptcy without a bailout, I don't think he or she will be confused. I don't disagree that the CEO may take more dangerous risks, but chances are that there were dangerous risks - legal and otherwise - already to get to that point where you're sitting in the board room and contemplating whether to just let it go south entirely (a stunning thought process that could cause issues far beyond some bailout).
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SirSaxa
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Post by SirSaxa on May 9, 2011 8:38:36 GMT -5
Rescuing Detroit: No news about government’s good newsExcerpts Far too little attention has been paid to the success of the government’s rescue of the Detroit-based auto companies, and almost no attention has been paid to how completely and utterly wrong bailout opponents were when they insisted it was doomed to failure.
“Having the federal government involved in every aspect of the private sector is very dangerous,” Rep. Dan Burton (R-Ind.) told Fox News in December 2008. “In the long term it could cause us to become a quasi-socialist country.” I don’t see any evidence that we have become a “quasi-socialist country,” just big profits.
Rep. Lamar Smith (R-Tex.) called the bailout “the leading edge of the Obama administration’s war on capitalism,” while other members of Congress derided the president’s auto industry task force. “Of course we know that nobody on the task force has any experience in the auto business, and we heard at the hearing many of them don’t even own cars,” declared Rep. Louie Gohmert (R-Tex.) after a hearing on the bailout in May 2009. “And they’re dictating the auto industry for our future? What’s wrong with this picture?”
What’s wrong, sorry to say, is that you won’t see a news conference where the bailout’s foes candidly acknowledge how mistaken they were.
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Deleted
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Post by Deleted on May 13, 2011 7:40:19 GMT -5
Is it possible to acknowledge that - horror of horrors - both the private sector AND the government can claim some measure of success in this realm?
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theexorcist
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Post by theexorcist on May 13, 2011 7:58:05 GMT -5
"“Having the federal government involved in every aspect of the private sector is very dangerous,” Rep. Dan Burton (R-Ind.) told Fox News in December 2008. “In the long term it could cause us to become a quasi-socialist country.” I don’t see any evidence that we have become a “quasi-socialist country,” just big profits."
Two years is not the long run.
I opposed the bailout then and I still oppose it now. It's far, far out of the realm of government. Government does not do well in the private sector - it has a different set of priorities and MO. A single effort that was succesful does not indicate that the government should be involved more or that increased governmental involvement is a good idea.
I'll emphasize that the above is a long run argument, and is different from this case. Here, it worked, my tax dollars didn't disappear down a vat and probably provided more value than it would have done funding a polka festival. But establishing this precedent is something with which I'm just not comfortable.
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TBird41
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Post by TBird41 on May 13, 2011 8:16:01 GMT -5
"�Having the federal government involved in every aspect of the private sector is very dangerous,� Rep. Dan Burton (R-Ind.) told Fox News in December 2008. �In the long term it could cause us to become a quasi-socialist country.� I don�t see any evidence that we have become a �quasi-socialist country,� just big profits." Two years is not the long run. I opposed the bailout then and I still oppose it now. It's far, far out of the realm of government. Government does not do well in the private sector - it has a different set of priorities and MO. A single effort that was succesful does not indicate that the government should be involved more or that increased governmental involvement is a good idea. I'll emphasize that the above is a long run argument, and is different from this case. Here, it worked, my tax dollars didn't disappear down a vat and probably provided more value than it would have done funding a polka festival. But establishing this precedent is something with which I'm just not comfortable. I don't know. Polka festivals can be a lot of fun if done right.
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SirSaxa
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Post by SirSaxa on May 13, 2011 8:42:07 GMT -5
"“Having the federal government involved in every aspect of the private sector is very dangerous,” Rep. Dan Burton (R-Ind.) told Fox News in December 2008. “In the long term it could cause us to become a quasi-socialist country.” I don’t see any evidence that we have become a “quasi-socialist country,” just big profits." Two years is not the long run. I opposed the bailout then and I still oppose it now. It's far, far out of the realm of government. Government does not do well in the private sector - it has a different set of priorities and MO. A single effort that was succesful does not indicate that the government should be involved more or that increased governmental involvement is a good idea. I'll emphasize that the above is a long run argument, and is different from this case. Here, it worked, my tax dollars didn't disappear down a vat and probably provided more value than it would have done funding a polka festival. But establishing this precedent is something with which I'm just not comfortable.Exorcist, thank you for acknowledging that -- in this case -- the govt. takeover of a private company worked. I assume you are also aware that Ronald Reagan bailed out Chrsyler back in the day? No one (Rep or Dem) has suggested they want the Government involved in running private companies as a standard operating practice -- although some Republicans falsely attack Obama on that basis anyway. During WWII, the govt. told GM (for example) to stop building cars and start building trucks, tanks and planes, etc. Would you consider that a "socialist" move? We did have, afterall, a Democratic president at the time. Most people would agree it was an absolutely necessary step in a time of crisis for the USA. And, of course, it worked. We won. After the war, GM went back to building cars. Well, the Financial meltdown of 2008 was also a "time of crisis". The government was the ONLY entity that had the ability to take extreme steps to stem the tide. It started in the Fall of 2008 with a bi-partisan effort to approve TARP. Bush/Pelosi/Reed took courageous steps to enact it. The Obama admin implemented TARP even more effectively - - and they saved the US and global economy in the process -- along with unprecedented steps by Bernanke and the FED. One of the most obvious successes was the temporary takeover and restructuring of GM. It has been a HUGE success by any measure and a key part of creating jobs and saving an entire, American manufacturing industry. No one has suggested we want to be doing this on an ongoing basis -- long term, short term, any term at all. It is fine to have a governing philosophy to guide policies for the good of the country during normal times. But when hit with a gigantic crisis, sometimes those "philosophies" need to be modified in the face of potential catastrophe. Sometimes we need to make exceptions to meet real, pragmatic necessities. Suggesting the Obama admin wants to privatize the economy and turn the US into a socialist country is simply disingenuous (not suggesting that's what you are doing). As Cam posted, this would be a great time to recognize that the Government and Private Industry both deserve credit for a job well-done.
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theexorcist
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Post by theexorcist on May 13, 2011 9:10:09 GMT -5
I was not alive during World War II, but from everything that I understand, the analogy you make is just a teensy bit of an exaggeration. During World War II, they moved the Rose Bowl to Duke for fear of Japanese bombing, everyone got ration cards, and lots and lots of draftees got killed by members of the Axis.
The financial meltdown was not a "time of crisis" on the level of the above. Gas wasn't rationed and no one was afraid that the Western United States was going to get bombed.
I continue to believe that, every time an administration bails out someone, Republican or Democrat, the terms get dicier. I'm not particularly familiar with the Chrysler bailout (I was four), but, on initial research, the government only guaranteed private sector loans, not made the loans themselves. There was mission creep in this latest bailout. If there's a future proposal for a bailout - and, mark my words, there will be - the proposal for the government's involvement will be even more involved in the company.
Finally, "saving an entire, American manufacturing industry" doesn't hold weight. It's two or three steps from "saving an entire, American manufacturing industry" by subsidies to clearly uncompetitive textile manufacturers in the Southeast. Every proposal involving saving Detroit doesn't focus on autos - it's about green technology or future technologies. At some point, when Tata in India can make a cheap car for substantially under $10K, we really have to ask how long these jobs can last in the United States before we have to accept that we're more competitive in high-tech and services.
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Post by jerseyhoya34 on May 13, 2011 11:17:36 GMT -5
I don't think the bailouts were ideal, but, as usual, there is an utter lack of a counterproposal on the other side. Maybe it is that they would let the companies fail, but, if that's the idea, where are the graphs on jobs lost, lost tax revenue, and the like?
The essence of this debacle and governance is that you have to choose among alternatives, and two presidents chose the bailout model - including one with extensive business background and a vision to "run government like a business." I am sure that they had eyes and ears in the room with the Tea Party thinking, and that they did not choose it may speak volumes.
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TC
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Post by TC on May 13, 2011 11:20:49 GMT -5
I'm not particularly familiar with the Chrysler bailout (I was four), but, on initial research, the government only guaranteed private sector loans, not made the loans themselves. Distinction without a difference. As we learned in the real estate bubble, people are willing to loan money to anyone for anything if it's backed by full faith and credit.
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SirSaxa
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Post by SirSaxa on May 13, 2011 14:10:06 GMT -5
I opposed the bailout then on principle, and I opposed it now on principle. Exorcist, allow me to recap our positions, if you will. - We have both acknowledged the Govt's GM story is a huge success. - Despite that, you are still opposed as a "matter of principle". - We also both acknowledged we don't think the Govt should be making a practice of running the private sector. - But I made an exception for times of Crisis -- circumstances sometimes require that we modify our guiding principles, or make exceptions -- and I cited GM during WWII as an example. (I should draw a distinction between "economic principles" -- where exceptions can/should be made when dire circumstances dictate., and "moral principles" -- e.g. Torture -- where exceptions should never be made.) You commented that WWII was much worse than the recent Economic meltdown/nearly avoided abyss, though you did not make a statement about whether the Govt. was right to interfere with the private sector at that time. Assuming your absence of disagreement implies that you DO approve of the WWII measures taken, it appears that your adherence to "principle" is subject to the "degree of the Crisis". Thus, you are allowing for exceptions to be made. Am I correct in making that assumption? To restate: - We both acknowledged we don't think the Govt should be making a practice of running the private sector. - We BOTH? agree that dire circumstances can -- at times -- override economic principles. - So now, I guess we just differ on the magnitude of the recent crisis? Was it sufficient to merit govt involvement? To me that answer is obvious. That's a long way from all that nonsense Republicans were spewing about socialism and "a war on the private sector". (Using the word "nonsense" is being kind.) Let's look at Reagan's bailout of Chrysler. You seem to think that was "better" because the govt didn't do it directly, but "only" provided guarantees to the Financial entities that provided the necessary funds. But that is exactly what everyone has been screaming about since the Economic meltdown. Privatized profits, but "socialized" losses. Re: TARP - the govt. ran the program itself -- very well -- and has MADE money on most of the investments (not to mention the far greater "return" of saving the economy). In the Chrysler case you cited, the Govt. -- taxpayers -- still took ALL the risk, but the banks made ALL the money. They were able to lend to Chrysler at going rates, and earn their normal profits, without taking ANY of the risk. That is a government "handout" to the banks. Reagan not only bailed out Chrysler, but made huge handouts to the Banks in the process. That's "better"? Is that really how you want your tax dollars being spent? And, BTW, Chrysler's shareholders still maintained their ownership -- thanks, once again, to a government 'handout'. Think of it like this, let's say the govt. offered to "guarantee" your investments. You could invest as much as you want in the stock market, be as speculative as you like. - If you make money, you get to keep everything you made. - If you lose money, don't worry, the govt guaranteed your investment so they will make up your losses to you. Does that really sound like a "better" solution? That's the deal that Chrysler's banks got. Subsidizing the textile industry was not smart. You are right about that. Neither is subsidizing the Farming industry, though we spend $100s of Billions doing so -- and have for decades under Rep and Dem admins. It doesn't make any sense for us taxpayers to be subsidizing the Oil industry either -- an industry that made $100 BILLION in PROFITS this year. They need subsidies? The only thing is, GM is NOT getting subsidies. They got a one-time restructuring. Now it is up to them to thrive, long term. So far, they are off to a good start. Wall St. signaled their endorsement via the largest IPO in US history. Millions of jobs were saved. Federal and State governments saved $millions in unemployment benefits. Additional tax revenues were created. The benefits go on and on. Sometimes, temporary exceptions in the face of dire reality, is a wiser course of action than slavish devotion to principle.
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TBird41
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Post by TBird41 on May 13, 2011 16:13:00 GMT -5
The other thing that keeps getting left out of the GM bailout debate is that saving GM / Chrysler from bankruptcy saves the gov't from having to pay the pension obligations via the Pension Benefit Guaranty Corporation like happened w/ a lot of the steel workers pensions
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