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Getbig Main Boards => Politics and Political Issues Board => Topic started by: Danny on August 24, 2010, 03:03:30 PM
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http://www.economist.com/node/16846494?story_id=16846494 (http://www.economist.com/node/16846494?story_id=16846494)
General Motors
Government Motors no more
An apology is due to Barack Obama: his takeover of GM could have gone horribly wrong, but it has not
Aug 19th 2010
AMERICANS expect much from their president, but they do not think he should run car companies. Fortunately, Barack Obama agrees. This week the American government moved closer to getting rid of its stake in General Motors (GM) when the recently ex-bankrupt firm filed to offer its shares once more to the public (see article).
Once a symbol of American prosperity, GM collapsed into the government’s arms last summer. Years of poor management and grabby unions had left it in wretched shape. Efforts to reform came too late. When the recession hit, demand for cars plummeted. GM was on the verge of running out of cash when Uncle Sam intervened, throwing the firm a lifeline of $50 billion in exchange for 61% of its shares.
Many people thought this bail-out (and a smaller one involving Chrysler, an even sicker firm) unwise. Governments have historically been lousy stewards of industry. Lovers of free markets (including The Economist) feared that Mr Obama might use GM as a political tool: perhaps favouring the unions who donate to Democrats or forcing the firm to build smaller, greener cars than consumers want to buy. The label “Government Motors” quickly stuck, evoking images of clunky committee-built cars that burned banknotes instead of petrol—all run by what Sarah Palin might call the socialist-in-chief.
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Yet the doomsayers were wrong. Unlike, say, France’s President Nicolas Sarkozy, who used public funds to support Renault and Peugeot-Citroën on condition that they did not close factories in France, Mr Obama has been tough from the start. GM had to promise to slim down dramatically—cutting jobs, shuttering factories and shedding brands—to win its lifeline. The firm was forced to declare bankruptcy. Shareholders were wiped out. Top managers were swept aside. Unions did win some special favours: when Chrysler was divided among its creditors, for example, a union health fund did far better than secured bondholders whose claims should have been senior. Congress has put pressure on GM to build new models in America rather than Asia, and to keep open dealerships in certain electoral districts. But by and large Mr Obama has not used his stakes in GM and Chrysler for political ends. On the contrary, his goal has been to restore both firms to health and then get out as quickly as possible. GM is now profitable again and Chrysler, managed by Fiat, is making progress. Taxpayers might even turn a profit when GM is sold.
So was the auto bail-out a success? It is hard to be sure. Had the government not stepped in, GM might have restructured under normal bankruptcy procedures, without putting public money at risk. Many observers think this unlikely, however. Given the panic that gripped private purse-strings last year, it is more likely that GM would have been liquidated, sending a cascade of destruction through the supply chain on which its rivals, too, depended. As for moral hazard, the expectation of future bail-outs may prompt managers and unions in other industries to behave rashly. But all the stakeholders suffered during GM’s bankruptcy, so this effect may be small.
Socialists don’t privatise
That does not mean, however, that bail-outs are always or often justified. Straightforward bankruptcy is usually the most efficient way to allow floundering firms to restructure or fail. The state should step in only when a firm’s collapse poses a systemic risk. Propping up the financial system in 2008 clearly qualified. Saving GM was a harder call, but, with the benefit of hindsight, the right one. The lesson for governments is that for a bail-out to work, it must be brutal and temporary. The lesson for American voters is that their president, for all his flaws, has no desire to own the commanding heights of industry. A gambler, yes. An interventionist, yes. A socialist, no.
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They are getting destroyed by Ford which didnt take the bailout...oh wait,little tiny Harry Reid still credits that to Obama.
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They are getting destroyed by Ford which didnt take the bailout...oh wait,little tiny Harry Reid still credits that to Obama.
If you think Ford is doing better only because they did not take the bailout you must be high or something. ::)
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If you think Ford is doing better only because they did not take the bailout you must be high or something. ::)
Ya know something? The Economist, one of the most respected magazines in the world (in all things economics of course), comes out with an article stating, with a stiff upper lip mind you, that they were wrong and Obama was right about GM and some people still argue otherwise... I dunno, I opine that you're wasting your time.
Look there are people who listen to reason and many who don't. Who are we to show them a better way?
Let them stay in the fucking cave!
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Ya know something? The Economist, one of the most respected magazines in the world (in all things economics of course), comes out with an article stating, with a stiff upper lip mind you, that they were wrong and Obama was right about GM and some people still argue otherwise... I dunno, I opine that you're wasting your time.
Look there are people who listen to reason and many who don't. Who are we to show them a better way?
Let them stay in the fucking cave!
And I can show articles from ten other economists that say Obama was wrong and GM should have gone into bankruptsy and re-organised.I can also show you hundreads of articles showing how Imam Obama screwd shareholders and rewarded the filthy UAW.I couldnt care less if GM comes back to make trillions,Obama screwd the shareholders and rewarded the UAW which was mostly responsible for the collapse of the company.
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And I can show articles from ten other economists that say Obama was wrong and GM should have gone into bankruptsy and re-organised.I can also show you hundreads of articles showing how Imam Obama screwd shareholders and rewarded the filthy UAW.I couldnt care less if GM comes back to make trillions,Obama screwd the shareholders and rewarded the UAW which was mostly responsible for the collapse of the company.
And you can be shown laws from every state in america that drug trafficking, drug use and drug dealing are all ILLEGAL and worthy of JAIL TIME. It is just a short matter of time before the DEA is kicking your fucking door in and arresting your mentally retarded ass.
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EXHIBIT # 1:
And I can show articles from ten other economists that say Obama was wrong and GM should have gone into bankruptsy and re-organised.I can also show you hundreads of articles showing how Imam Obama screwd shareholders and rewarded the filthy UAW.I couldnt care less if GM comes back to make trillions,Obama screwd the shareholders and rewarded the UAW which was mostly responsible for the collapse of the company.
So... Let me guess, The Economist, a magazine hundreds of thousands of Economics professors or economics experts around the world read (and have the ability to correct and GRILL BIG TIME if they want to, but "misteriously" don't, most likely because the information they present is correct), coming out with an article basically stating that Obama was right, and they were wrong, doesn't somehow sort of convince you that the guy is maaaaaaaaybe doing something right?
Ask yourself this: Is there a possibility that the people you're listening to are... not as right as you think they are?
As far as UAW being responsible for the collapse of GM... if you're telling me the assembly workers, the ones who put the tyres on the cars, and all the electrical cabling, et cetera, are the ones who brought the company down... all I can say is: GO FUCK YOURSELF!! You're talking about working American people.
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EXHIBIT # 1:
So... Let me guess, The Economist, a magazine hundreds of thousands of Economics professors or economics experts around the world read (and have the ability to correct and GRILL BIG TIME if they want to, but "misteriously" don't, most likely because the information they present is correct), coming out with an article basically stating that Obama was right, and they were wrong, doesn't somehow sort of convince you that the guy is maaaaaaaaybe doing something right?
Ask yourself this: Is there a possibility that the people you're listening to are... not as right as you think they are?
As far as UAW being responsible for the collapse of GM... if you're telling me the assembly workers, the ones who put the tyres on the cars, and all the electrical cabling, et cetera, are the ones who brought the company down... all I can say is: GO FUCK YOURSELF!! You're talking about working American people.
Unions dont work.They sit on their big fat asses and make 50 dollars an hour screwing in a srew and then retire at about 80% of their annual salary with health benfits that bankrupt the company.The UAW is a bunch of pussies who have destroyed the car industry as unions destroyed the textile industry,steel industry,education etc.
So,go fuck yourself you bitch made homo!!!!!!!!!Unions are anti American and should be disbanded to save the country.
Samson,you need steroids just to get weak.