As the first evidence of Obama continuing Bush's policies, he's 100% on board with the bailout big business approach that has been so effective at making our auto industry so much more productive and efficient. Oh, wait, sorry. My mistake, the American auto industry continues to lose jobs and money no matter how much the government decide to pour down their black hole of a business. So Barack Obama is going to save the auto industry by giving their executives billions of your dollars to lose while continuing to lay off low level employees.

 

Are there really people who seriously think this is a good idea - to just continue to pour our money into a business that isn't viable in its current form?

I never expected this new administration to bring less bailouts, I think we are going to see more.

 

I don't think anyone is shocked

I never expected this new administration to bring less bailouts, I think we are going to see more.

 

I don't think anyone is shocked

 

Agreed.

 

Just think, though, if GM fails: that's 5 million jobs down the drain. Think about the broader consequences. I don't like bailouts, but I think they may be necessary now to avoid a total economic meltdown.

 

Fresh, your predictions about a depression, unfortunately, appear to be starting to come true.

I never expected this new administration to bring less bailouts, I think we are going to see more.

 

I don't think anyone is shocked

 

Agreed.

 

Just think, though, if GM fails: that's 5 million jobs down the drain. Think about the broader consequences. I don't like bailouts, but I think they may be necessary now to avoid a total economic meltdown.

 

Fresh, your predictions about a depression, unfortunately, appear to be starting to come true.

Well, this is the conundrum that I see. I don't like giving GM and Ford more money, because just like the airline industry, they never do anything productive with these government bailouts. However, we can't let them fail, as GM alone employs so many people. I do think that the government needs to be tougher about this, and demand benchmarks or promises from GM or Ford in exchange for the money, and then back up their words with actions if the companies don't fulfill their part of the bargain.

I'll never understand this "we cannot let them fail" mentality. These are private businesses which are insolvent and being on government welfare takes away any motivation that they might have to correct their business practices. To give them money will only perpetuate this. It's not like it's the first time the government has given them our money, and it hasn't stopped them from losing jobs year after year. At best, it has slowed it down a little, but at what cost?

 

I heard someone else explain pretty well also that the idea that these companies "going under" would mean the end of the American auto industry is also short sighted. All the factories and assets would still be there, and someone else would buy that up, probably along with the company name. They would likely still go back and hire the old plant employees, since I think it would be cheaper than training an entire new crop to run those factories. It would however leave out all the executives who have mismanaged those companies into the ground.

 

I think it's also very naive to think that government just giving them money can really "save jobs", or that government shoudl even be in the business of saving jobs. Progress demands that some jobs will be lost forever and replaced with different jobs. A good example I remember from that recent 20/20 John Stossel had for the Election was that of the guys who used to deliver blocks of ice to people's homes before refrigerators and freezers became commonplace. Obviously technology made the job those guys had obsolete, but what would it have cost us and would it have been worth it to try to "save" their jobs?

 

I also don't understand how it is moral to think that these huge companies with their millionaire executives cannot be allowed to fail but small business and regular folks like us are on our own.

I never expected this new administration to bring less bailouts, I think we are going to see more.

 

I don't think anyone is shocked

 

Agreed.

 

Just think, though, if GM fails: that's 5 million jobs down the drain. Think about the broader consequences. I don't like bailouts, but I think they may be necessary now to avoid a total economic meltdown.

 

Fresh, your predictions about a depression, unfortunately, appear to be starting to come true.

Well, this is the conundrum that I see. I don't like giving GM and Ford more money, because just like the airline industry, they never do anything productive with these government bailouts. However, we can't let them fail, as GM alone employs so many people. I do think that the government needs to be tougher about this, and demand benchmarks or promises from GM or Ford in exchange for the money, and then back up their words with actions if the companies don't fulfill their part of the bargain.

 

 

Just because a company goes into bankruptcy doesn't mean there going to liquidate. The airlines go in and out of bankruptcy all the time, they restructure themselves and come out the other end usually making money. This is what needs to happen to the auto industry. Right now the auto industry is so horrific that it would bleed through billions of dollars in cash in just a few years. The unions that represent the labor at ford and GM will not budge on anything when the companies negotiate. Now, I'm all for unions, i'm apart of ALPA, but the unions at ford and gm are bankrupting there respective companies. Alot of there labor force represents some of the most highly paid un-skilled workers in the world, not to mention the very generouse pention plans and benifts they recieve. The un-skilled labor that work in these factories make more then 40 % of airline pilots who are highly skilled and trained with college degrees along with alot of other "skilled" workers.

 

The bottom line, under the current cost structure of Ford and GM, along with the economic crisis and the fact that no one wants to buy an SUV anymore, the companies cannot survive without some concessions. Ford and GM don't make money when they sell car's. Competition like Toyota, are making cars so cheap that ford and GM actually cheapen there cars (taking out GPS's amongst other goodies) just to keep there cost's down. The companies are actually pricing themselves into bankruptcy (I though the airlines were the only ones who did that). The cost of there material contracts, labor costs and paying full pensions on retried workers along with other outrageously good work rules have helped to make it so. The CEO's 40 million dollar bonus's for running there respective companies into the ground is a huge cause as well. The unions will not negotiate the kind of concessions with the labor needed to turn these companies around. So the companies are forced to lay people off instead and still, they can't make money. IF you give them a bailout, then you might as well burn the money because the auto industry will bleed it out so fast in two years they'll just be on the brink again.

 

what needs to happen is bankruptcy. Ford and GM must file chapter 11 bankruptcy protection. They need to meet with the federal government, and federal arbitration judges and come up with a cost structure that will have the company actually make money. They need the arbitration judges to look at the labor contracts and compare them with other labor contracts in the industry and come up with fair packages with the unions that will allow for a successful company. In return there needs to be snap back clauses in the concessions so that if management takes a bonus or raise the concessions snap back to pre bankruptcy numbers. This is the American auto industries best chance at coming out of bankruptcy as a stronger company then the company that went into bankruptcy and allow them to compete with foreign automakers that won't sink the company. Other wise you could very will see chapter 7 liquidation of the companies.

 

Now yes, ford and GM going into bankruptcy will hurt the stock market at first but in the end having the companies come out leaner and more economically sound will be the best thing for the market in the long run. If they don't go into bankruptcy, labor and management will never negotiate anything of substance to improve the companies cost structures (especially without government over sight) and if you just give them a bailout your just giving them more money to hemorrhage out without actually stitching up the wounds.

There are too many jobs at stake to just throw in the towel. There has to be some kind of solution to this. I don't think it's enough to stand by and do nothing.

There are too many jobs at stake to just throw in the towel. There has to be some kind of solution to this. I don't think it's enough to stand by and do nothing.

 

 

you let the company file chapter 11, get the federal judges, management and unions work out concessions and new cost structures. once they get a cost structure that will work then you take the company out of bankruptcy and they should make money. (if they do it right that is)

There are too many jobs at stake to just throw in the towel. There has to be some kind of solution to this. I don't think it's enough to stand by and do nothing.

Again, this doesn't save jobs. The auto companies have been on government welfare for a long time and they're still laying off people year after year. The only people this money really saves is those at the top and they need to go.

IF you give them a bailout, then you might as well burn the money because the auto industry will bleed it out so fast in two years they'll just be on the brink again.

This, except that I think they'll be back for more welfare in 6 months rather than 2 years.

There are too many jobs at stake to just throw in the towel. There has to be some kind of solution to this. I don't think it's enough to stand by and do nothing.

 

 

concur. I only wish the government would have done more for other businesses in the past that failed. Think how many jobs we could have saved if we would have bailed out the rotary phone industry, dial up internet businesses, milkmen, pets.com...the government should have been saving businesses and jobs years ago.

 

It's just not fair that a business could fail and the government won't do anything!

There are too many jobs at stake to just throw in the towel. There has to be some kind of solution to this. I don't think it's enough to stand by and do nothing.

 

 

concur. I only wish the government would have done more for other businesses in the past that failed. Think how many jobs we could have saved if we would have bailed out the rotary phone industry, dial up internet businesses, milkmen, pets.com...the government should have been saving businesses and jobs years ago.

 

It's just not fair that a business could fail and the government won't do anything!

Well played :thumbup

I never expected this new administration to bring less bailouts, I think we are going to see more.

 

I don't think anyone is shocked

 

Agreed.

 

Just think, though, if GM fails: that's 5 million jobs down the drain. Think about the broader consequences. I don't like bailouts, but I think they may be necessary now to avoid a total economic meltdown.

 

Unless they deal with their unsustainable cost structures bailing them out is simply postponing the inevitable and it's kind of like flushing money down the toilet.

I really wish 1-800-COLLECT were still around. Why weren't you there, government? Now Mr. T is out of work.

 

 

 

O SNAP !!! :o :o

 

if only 1-800-collect was bailed out Mr. T wouldn't be supporting the competition.

I never expected this new administration to bring less bailouts, I think we are going to see more.

 

I don't think anyone is shocked

 

Agreed.

 

Just think, though, if GM fails: that's 5 million jobs down the drain. Think about the broader consequences. I don't like bailouts, but I think they may be necessary now to avoid a total economic meltdown.

 

Unless they deal with their unsustainable cost structures bailing them out is simply postponing the inevitable and it's kind of like flushing money down the toilet.

 

Perhaps the bailout could require it.

I never expected this new administration to bring less bailouts, I think we are going to see more.

 

I don't think anyone is shocked

 

Agreed.

 

Just think, though, if GM fails: that's 5 million jobs down the drain. Think about the broader consequences. I don't like bailouts, but I think they may be necessary now to avoid a total economic meltdown.

 

Unless they deal with their unsustainable cost structures bailing them out is simply postponing the inevitable and it's kind of like flushing money down the toilet.

 

Perhaps the bailout could require it.

Sorry to break it to you for the Democrats are in the pockets of the unions so that's not about to happen.

I never expected this new administration to bring less bailouts, I think we are going to see more.

 

I don't think anyone is shocked

 

Agreed.

 

Just think, though, if GM fails: that's 5 million jobs down the drain. Think about the broader consequences. I don't like bailouts, but I think they may be necessary now to avoid a total economic meltdown.

 

Unless they deal with their unsustainable cost structures bailing them out is simply postponing the inevitable and it's kind of like flushing money down the toilet.

 

Perhaps the bailout could require it.

Sorry to break it to you for the Democrats are in the pockets of the unions so that's not about to happen.

 

I think the unions understand that the choice is between having a job or not having a job. It is in their best interest to make sure the company stays afloat and prosper.

I never expected this new administration to bring less bailouts, I think we are going to see more.

 

I don't think anyone is shocked

 

Agreed.

 

Just think, though, if GM fails: that's 5 million jobs down the drain. Think about the broader consequences. I don't like bailouts, but I think they may be necessary now to avoid a total economic meltdown.

 

Fresh, your predictions about a depression, unfortunately, appear to be starting to come true.

 

The variable in the economy that is not clear to me is the currency (domestic and international). The world is significantly different to 1929, due to globalization and paper currencies (i.e. Euro and Dollar)

 

In the depression era cash was king, due to deflation. We are seeing deflation now on commodities with the dollar getting stronger, but I think heavy government intervention may reverse those variables. We are playing with fire.

 

The dollar is a good investment now, but I just don't know how this is going to play out at the end. Is a total dollar collapse possible? I think it is possible, I'm not sure how probable it is at this point. Our Government is operating in a crisis mode, without regards to long term consequences.

 

Maybe a global collapse will 'unite' the world, ushering a global bank holiday where we end up with new international economic rules and one global currency (probably the dollar?). You better believe the US is going to use their power and be a significant part of the new deal, whatever that may be.

 

I know all of the above sounds crazy, but I think it is closer to reality that most of us may think.

I never expected this new administration to bring less bailouts, I think we are going to see more.

 

I don't think anyone is shocked

 

Agreed.

 

Just think, though, if GM fails: that's 5 million jobs down the drain. Think about the broader consequences. I don't like bailouts, but I think they may be necessary now to avoid a total economic meltdown.

 

Fresh, your predictions about a depression, unfortunately, appear to be starting to come true.

 

The variable in the economy that is not clear to me is the currency (domestic and international). The world is significantly different to 1929, due to globalization and paper currencies (i.e. Euro and Dollar)

 

In the depression era cash was king, due to deflation. We are seeing deflation now on commodities with the dollar getting stronger, but I think heavy government intervention may reverse those variables. We are playing with fire.

 

The dollar is a good investment now, but I just don't know how this is going to play out at the end. Is a total dollar collapse possible? I think it is possible, I'm not sure how probable it is at this point. Our Government is operating in a crisis mode, without regards to long term consequences.

 

Maybe a global collapse will 'unite' the world, ushering a global bank holiday where we end up with new international economic rules and one global currency (probably the dollar?). You better believe the US is going to use their power and be a significant part of the new deal, whatever that may be.

 

I know all of the above sounds crazy, but I think it is closer to reality that most of us may think.

 

I agree with you. Given the current-account deficits so many industrialized countries are running right now, once countries like China decide to float their currencies (rather than their current "let it float within a range" deal they have going) the dollar and Euro will likely collapse quite dramatically. We're seeing a seismic shift in the world financial order, with emerging markets playing an increasingly important role (BRIC and the countries in the Middle East). Do you remember the inverted yield curve we saw in 2007 (short term rates were higher than long term rates)? I think that was caused by a flood of money from emerging markets in safe, long-term treasuries (money that was accumulated over years of current-account deficits run by the US and the EU).

 

Unfortunately, I think this instability in the financial markets will continue for the next few years.

If we have a financial catastrophe the only real similarity to 1929 would be that government meddling caused it.

 

Expect deflation in the short-term but massive inflation over the long scale. I wouldn't call the dollar a good investment right now, unless you are trading severely on the short term. Better currencies to look at would be the Swiss Franc or the Yen. Furthermore, I heard one analyst say the other day that we could be seeing $4000-$5000 gold by the end of Obama's presidency (assuming he doesn't confiscate it, that is).

 

If we maintain, this course, I don't think a one world currency is out of the question. It is incredibly undesirable but since we appear to be completely against letting failing institutions fail and running a balanced budget, it's inevitable.

 

yes..yes..and yes

 

the dollar is a short term play, as the global economy deflates..I think we are going to see more capital into the US treasuries and leaving the more speculative markets (short term).

 

The Swiss Francs is solid, since it is a currency backed by precious metals.

 

Hard currencies such as gold and silver (in moderation) are good method of defense. But on a collapse, the Government has no other choice but to confiscate them ('for the greater good of the nation')

We could sell Guam... :confused

I never expected this new administration to bring less bailouts, I think we are going to see more.

 

I don't think anyone is shocked

 

Agreed.

 

Just think, though, if GM fails: that's 5 million jobs down the drain. Think about the broader consequences. I don't like bailouts, but I think they may be necessary now to avoid a total economic meltdown.

 

Unless they deal with their unsustainable cost structures bailing them out is simply postponing the inevitable and it's kind of like flushing money down the toilet.

 

Perhaps the bailout could require it.

As nice an idea as that sounds like, it has more than a few problems, just like adding conditions to any bailout:

#1 You need someone to come up with these specific conditions, and while some of them might be obvious (like cutting executives' salaries), so it'll cost us more just on top of that.

#2 There's no guarantee that the requirements placed on them by government will actually be the correct solution to the problem, and if the company is bound to those requirements by government mandate it will only make it more difficult to correct new problems as they arise.

#3 Even if you could find someone smart enough to foresee all possible issues and come up with the "right requirements", you still need to spend even more money to hire people to monitor these companies to be ready to penalize those who do not comply.

#4 Even after you spend all this money and have been lucky enough to get a good set of conditions, there is no chance that your monitors/regulators/enforcers are going to bat 1000 so to speak - there are guaranteed to be violations, abuses, and misuses that the regulators will miss, and not even necessarily because they are bad or incompitent people (although that may be the case as well), but just because they are human they are guaranteed to make mistakes and to miss things.

 

I gotta say though, it scares the hell out of me how people seem to so casually discuss (and be ok with) the idea of the government confiscating private property like gold (I think that's called theft) or a one-world currency. I don't think I can properly express how bad these things would be if they happened.

I gotta say though, it scares the hell out of me how people seem to so casually discuss (and be ok with) the idea of the government confiscating private property like gold (I think that's called theft) or a one-world currency. I don't think I can properly express how bad these things would be if they happened.

 

I don't think anyone is claiming that confiscating private property is OK. My opinion is that it is an outrageous violation of liberties. I put in quote 'for the greater good of the nation', because that's how it is going to be played by the government and the media as an excuse for such atrocity. They will probably tell you that you would be getting an equivalent in treasury bonds paying 5%, and it is a much better deal than exchanging dollars for gold like they did on FDR....

 

Is not like it hasn't been done before. . .heck, they are discussing the Government taking over and socializing 401Ks with the excuse of giving people their balances as of August 2008..So this is real plausible scenarios that shouldn't surprise anyone. The Government is huge at this point, and people want to cling to their Dollars and houses and want Government to be a solution, instead of staying away. This how the majority of Americans look at their Government today, Government officials know this and they will act accordingly.

 

I don't see a problem discussing these possibilities, so people can protect themselves from their circumstances and the government.

Sorry, I guess just fear and outrage don't come through well in text.

 

All the same, we live in scary times.

Sorry, I guess just fear and outrage don't come through well in text.

 

All the same, we live in scary times.

 

I understand where you are coming from...But at this point, all of these scenarios are hypothetical. We don't know how all of this is going to shake out. So I rather discuss without fear and outrage...we all need to be vigilant, discuss and watch the events in order to take action we deem best to protect ourselves