Should the government have bailed out GM?

[Chino]

I'll post my thoughts in a bit, but I have to get to class in a minute, just thought I would get the ball rolling. In short, I think it was a good move, I'll elaborate later.

[lordxizor]

I think it was a good move, but it's easy to say that now that we see how successful it ended up being. It seemed like an unfortunate necessity at the time.

[7StringedBeast]

I think in the physical sense it was a good thing.  That being the direct effect it had on the business and the industry.  People got to keep working, cars kept getting built and so on.  I think a negative however is that it sets a precedent of bad business practice being rewarded.  This sense of, ok well if we fail the government will bail us out because our company is so large.

I don't know, I feel like GM just should have had better business practices and come up with better products and would have been in better shape.  I don't think people should be rewarded for doing a bad job.  That said, I don't necessarily want to see GM go away either...

I just hope that this bailout thing doesn't become a trend.  Businesses need to know that they need to be great and stay on the cutting edge, or people won't buy into their product and they will go out of business.  This hopefully would lead to the rise of a better company with a better product.

I guess that's how I feel about it. 

[El Barto]

I thought a government loan to get them through a controlled bankruptcy would have been a better solution.  It seems like this was just to keep them afloat, without addressing some of the underlying problems within the industry. 

[rumborak]

As others have said, at the time it happened it was important to not have a complete industry and its supply chains collapse. Because once it collapses you can't just revive it, a company out of business is a company out of business.
I view it as risk investment, just like thousands of VC groups do. The government gambled right and got the money back with a bonus. It should only be a last-resort measure though, but I have no reason to believe this will change.

rumborak

[El Barto]

But would they have gone out of business?

[rumborak]

To my understanding it was assured they would without help, right?

EDIT: Yes, in 2009 the combination effect of low sales and inability to get loans (because banks were no longer giving loans to anybody) put GM close to liquidation. That I would call "going out of business"

rumborak

[rumborak]

To use an analogy, to me this like an alcoholic who has an acute liver failure. You got two options, either say "You shouldn't have let it come to this" and let him die, or prop him up long enough so he can recover and have a second chance. Giving the importance of GM in terms of employment I think it was the right decision at the moment.

rumborak

[El Barto]

To my understanding it was assured they would without help, right?

EDIT: Yes, in 2009 the combination effect of low sales and inability to get loans (because banks were no longer giving loans to anybody) put GM close to liquidation. That I would call "going out of business"

rumborak

I wasn't sure if it was bankruptcy or closure that they were fending off.  Regardless, I supported giving them loans to keep them afloat.  I just thought that bankruptcy precedings should have been part of the deal. 

[GuineaPig]

The government made money off it, didn't they?  I mean, all in all I don't know how you can criticize them for making what amounted to a wise investment.

[Super Dude]

Hey, as long as it contributes to the Detroit renaissance and hopefully pursuit of cleaner cars...

[Scheavo]

The government made money off it, didn't they?  I mean, all in all I don't know how you can criticize them for making what amounted to a wise investment.

Depending on which side your listening to, it either made money, or lost money, and I'm really not sure who to believe.

Honestly, the failure of those two companies probably would have made things a lot worse. Things would have reorganized themselves eventually, but it wasn't a good time to basically have our manufacturing industry crumble more than it already was. One thing that's sorta not relevant directly to this, but which seems to already be having an impact, is that Obama set national fuel efficiency standards. I think it's a fleet average of 56mpg, or somewhere around there. He also funded battery research and production. Those two things are probably going to really help the car industyr move forward.

Ideally, no, we wouldn't have bailed them out. But we weren't an in ideal situation, and we coulnd't treat it as such.

[jsem]

Absolutely now. It's especially horrid if it works to revive the business. What if the government had tried to preserve farming 200 years ago when urbanization began because of more advanced farming, just to save farming jobs. The government bailed it out to keep people from being laid off and for other protectionist reasons - but that prolongs progress.

[Riceball]

In one.

This guy got it.

I would like to add that big companies (like, really big) that are dubbed 'too big to fail' should pay the Government insurance.

Ready, break.

[snapple]

I thought a government loan to get them through a controlled bankruptcy would have been a better solution.  It seems like this was just to keep them afloat, without addressing some of the underlying problems within the industry.

[PraXis]

No. They're no more special than any other private company that succeeds or fails. They would be better off with a real chapter 11 where there would be an actual restructuring, and not screwing over the bond holders in favor or the parasitic UAW.

[Super Dude]

If I can take this thread *slightly* off-topic then, if not bailing out GM, how would you guys suggest bringing Detroit back on its feet economically? Because the truth of the matter is it's working; after all, that's the idea behind all those "Imported from Detroit" ads.

[jsem]

Cars don't have to be manufactured in Detroit. For a while it'll be tough there, but they'll find employment again - and the world will be better off because of a proper bankruptcy process. It paves the way for a more effective use of the assets of the companies that go under.

[Super Dude]

Find employment again from where, exactly? Detroit's been trying to find alternatives for the last twenty years, and has been on tough times for the last fifty; only in the time since the bailout are things finally picking up.

[El Barto]

Who gives a fuck about Detroit?  I'm more concerned about El Barto's house.  I supported keeping the US auto industry from imploding, but Detroit can become the next Pripriat for all I care.  In fact, I think I'd actually like that a great deal. 

[snapple]

Who gives a fuck about Detroit?  I'm more concerned about El Barto's house.  I supported keeping the US auto industry from imploding, but Detroit can become the next Pripriat for all I care.  In fact, I think I'd actually like that a great deal.

I live in Michigan. I give a fuck about Detroit. We have people leaving by the hundreds of thousands, and education funding is getting worse and worse and the fucking whole state is a shithole. Strong Detroit=strong Michigan.

[PraXis]

Stop electing liberals and maybe Detroit has a chance. They are a epitome of what happens to a city controlled by the progressive movement.

[Dark Castle]

Stop electing liberals and maybe Detroit has a chance. They are a epitome of what happens to a city controlled by the progressive movement.

[snapple]

Stop electing liberals and maybe Detroit has a chance. They are a epitome of what happens to a city controlled by the progressive movement.

I should have said Northern Michigan.

[Super Dude]

The fact of the matter is Detroit is getting better now, and that's because we have a liberal in office and those GM bailouts. And Detroit revival has implications going way beyond Michigan; if we become the front line in clean cars, we're very much set on the road to national recovery. After all, the Motor City is importantly a symbol of the U.S. making things again, rather than just being an economy of selling houses to each other.

[snapple]

The fact of the matter is Detroit is getting better now, and that's because we have a liberal in office and those GM bailouts. And Detroit revival has implications going way beyond Michigan; if we become the front line in clean cars, we're very much set on the road to national recovery. After all, the Motor City is importantly a symbol of the U.S. making things again, rather than just being an economy of selling houses to each other.

You mean a Republican governor. We've had liberals in Detroit for DECADES.

[Super Dude]

Oh, I was referring to the president. I will now look up the mayor's affiliation.

And yes I know Snyder's a Republican, I voted for him (regrettably).

Edit: The mayor's a liberal and a pretty honest guy, to boot.

[snapple]

Oh, I was referring to the president. I will now look up the mayor's affiliation.

And yes I know Snyder's a Republican, I voted for him (regrettably).

Edit: The mayor's a liberal and a pretty honest guy, to boot.

I didn't vote for Snyder. I didn't vote for the other guy, either. I voted on the rest of the ballot, though. Some good local props and what not. Can't miss those. They affect me more than the governor.

[emindead]

I thought Capitalism meant private gains and private losses.

[The King in Crimson]

I thought Capitalism meant private gains and private losses.

But what do you do when the losses cease to become private?

[PraXis]

I visited Detoilet last summer during a road trip. I stayed at the Motorcity Casino and went to a Tigers' game. The casino and stadium were nice (lots of security to keep out the undesirables), but the city itself looks like a third world country. The people who moved out to greener pastures were smart.

[snapple]

I saw McCartney at Comerica this summer. Literally, 3 blocks from the park and you wouldn't want to be on your own at night.

[Super Dude]

Well, that's what makes revival so important. Sharp increase in jobs will mean a sharp decline in crime.

[emindead]

I thought Capitalism meant private gains and private losses.

But what do you do when the losses cease to become private?

How does that happen?

[The King in Crimson]

I thought Capitalism meant private gains and private losses.

But what do you do when the losses cease to become private?

How does that happen?

I dunno, when say the people at the top of a company make some bad choices and the people at the bottom end up laid off because of them.  How is that a 'private loss' anymore?  Is it private because it's limited to that company only?  What if it's not limited to that company anymore, what if the decisions made/enforced by a select few end up having implications country or even worldwide?  Are those still considered private losses?