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Getbig Main Boards => Politics and Political Issues Board => Topic started by: Bindare_Dundat on June 08, 2009, 07:13:25 PM
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Last week, General Motors finally declared bankruptcy. Many in government thought $20 billion in taxpayer dollars would save the company, but as predicted, it only postponed the inevitable. The government will dump another $30 billion into GM and take a 60 percent controlling interest for it. Public officials are now involving themselves in tactical business decisions such as where GM’s headquarters should move and what kind of cars it will build.
The promise that this is temporary and will eventually be profitable is supposed to ease the American people into accepting this arrangement, but it is of little comfort to those who remember similar promises when the American taxpayers bought Amtrak. After three years, government was supposed to be out of the passenger rail business. 40 years and billions of dollars later, the government is still operating Amtrak at a loss, despite the fact that they have created a monopoly by making it illegal to compete with Amtrak. Imagine what they can now do to what is left of the great American auto industry!
In a truly free market, GM would get your money one way and one way only – by selling you a car you want, at a price you are willing to pay. Instead, the government is giving public money to a private company in spite of the market signals it has been sending. Throwing money at GM does not stop it from being an engine of wealth destruction; on the contrary, it simply gives it more wealth to destroy.
Had it been allowed to fail naturally, the profitable pieces of GM would have been bought up and put to good use by now. The laid off employees would likely have found new jobs and all that capital would be in private hands, reinvested in companies that produce products demanded by consumers. Instead, we are all poorer now.
Political pressure, rather than the rule of law, is deciding how to divide up the remains of GM. The bondholders had billions in retirement savings invested in the company, and though they were entitled to nearly three times as much as the United Auto Workers, the bondholders were left with just a 10 percent stake compared to the union’s 17.5 percent stake. For their 60 percent stake, taxpayers have a future of constant bailouts to look forward to.
Comingling public control of private business is known as fascism. While today’s politicians may feel emboldened with all their new power, history will only repeat itself as all this collapses on itself. It is the height of hubris for bureaucrats and politicians to attempt to control the market and the freewill of the American people. In the end, the market always wins out. Maybe one day future generations will wise up and allow free markets to function and thrive without the albatross of government around its neck. For now, it looks like those in charge have not learned the lessons of the past, and have doomed us to repeat those mistakes once again.
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Last week, General Motors finally declared bankruptcy. Many in government thought $20 billion in taxpayer dollars would save the company, but as predicted, it only postponed the inevitable. The government will dump another $30 billion into GM and take a 60 percent controlling interest for it. Public officials are now involving themselves in tactical business decisions such as where GM’s headquarters should move and what kind of cars it will build.
The promise that this is temporary and will eventually be profitable is supposed to ease the American people into accepting this arrangement, but it is of little comfort to those who remember similar promises when the American taxpayers bought Amtrak. After three years, government was supposed to be out of the passenger rail business. 40 years and billions of dollars later, the government is still operating Amtrak at a loss, despite the fact that they have created a monopoly by making it illegal to compete with Amtrak. Imagine what they can now do to what is left of the great American auto industry!
In a truly free market, GM would get your money one way and one way only – by selling you a car you want, at a price you are willing to pay. Instead, the government is giving public money to a private company in spite of the market signals it has been sending. Throwing money at GM does not stop it from being an engine of wealth destruction; on the contrary, it simply gives it more wealth to destroy.
Had it been allowed to fail naturally, the profitable pieces of GM would have been bought up and put to good use by now. The laid off employees would likely have found new jobs and all that capital would be in private hands, reinvested in companies that produce products demanded by consumers. Instead, we are all poorer now.
Political pressure, rather than the rule of law, is deciding how to divide up the remains of GM. The bondholders had billions in retirement savings invested in the company, and though they were entitled to nearly three times as much as the United Auto Workers, the bondholders were left with just a 10 percent stake compared to the union’s 17.5 percent stake. For their 60 percent stake, taxpayers have a future of constant bailouts to look forward to.
Comingling public control of private business is known as fascism. While today’s politicians may feel emboldened with all their new power, history will only repeat itself as all this collapses on itself. It is the height of hubris for bureaucrats and politicians to attempt to control the market and the freewill of the American people. In the end, the market always wins out. Maybe one day future generations will wise up and allow free markets to function and thrive without the albatross of government around its neck. For now, it looks like those in charge have not learned the lessons of the past, and have doomed us to repeat those mistakes once again.
Next time please put in Ron Paul sticky thread, after all that is what it is there for.
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Ron Paul is very much wrong this time.... Not about everything here... Just the premise that the people would have found jobs and the money would have been re-invested after the sale.
He has no clue what he's talking about on those points.
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Ron Paul is very much wrong this time.... Not about everything here... Just the premise that the people would have found jobs and the money would have been re-invested after the sale.
He has no clue what he's talking about on those points.
No one knows the future so no one can say.
However, I think it is undeniable that we are practicing economic fascism under Obama.
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Next time please put in Ron Paul sticky thread, after all that is what it is there for.
Don't tell me what to do. I'm a free man. :D
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Don't tell me what to do. I'm a free man. :D
The sticky is gone anyway.
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I don't believe anyone can say Paul is certainly wrong on this one. The workers would be displaced, certainly, but a large % of them would be re-employed by another company or find other work. Another start-up company may also spring up, healthier than GM. That is the free market. The horrible part is that there would be a large temporary displacement, agreed.
However, the larger picture is paramount. To what degree is the gov able to control private industry? Can it pick and choose what industries to save, how much of our $ should be spent on this, which companies should gov intervene (including firing CEOs and determining wages), does the government have the ability to run private industry better than private industry?
So, if a company went bankrupt, you don't think another start-up would appear (that learned the lessons of the failed company)?
I think the Amtrak correlation is appropriate and reminds people that if gov intervenes, they must get out quickly because gov cannot run private industry efficiently. Gov has too much bureacracy and waste. Gov should be setting rules to make equal playing fields, not managing companies.
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No one knows the future so no one can say.
However, I think it is undeniable that we are practicing economic fascism under Obama.
Perhaps, I won't disagree that I do not like the spend mentality... However, you and I both know that it would have been the same under McCain... So at least the Democrats will tax to try and get revenue to offset it... I mean, the Dems do tax.
I just think that using GM as a point of contention is silly... We had to inject them with cash so they would remain afloat long enough that they could actually make it into bankruptcy court... If not, then another company, who's NOT in the US, would have come in and bought them up and there wouldn't be a damn thing we could have done about it.
It would have been a long term disaster.
Add to that, the fact that we all know that companies are not hiring, and that a company which is worthless won't have any money after they sell off what little assets they have, and I think we can also all agree that there would not have been a net improvement to the economy.
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Perhaps, I won't disagree that I do not like the spend mentality... However, you and I both know that it would have been the same under McCain... So at least the Democrats will tax to try and get revenue to offset it... I mean, the Dems do tax.
I just think that using GM as a point of contention is silly... We had to inject them with cash so they would remain afloat long enough that they could actually make it into bankruptcy court... If not, then another company, who's NOT in the US, would have come in and bought them up and there wouldn't be a damn thing we could have done about it.
It would have been a long term disaster.
Add to that, the fact that we all know that companies are not hiring, and that a company which is worthless won't have any money after they sell off what little assets they have, and I think we can also all agree that there would not have been a net improvement to the economy.
i have no doubt that McCain would be doing exactly the same thing.
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i have no doubt that McCain would be doing exactly the same thing.
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I think there would be some differences with McCain but probably not on the GM issue, agreed.