Yep. Goldman and the gang would have taken their bailout money and swooped in to buy the automakers.
Then both GM and Chrysler should have been shoved into bankruptcy and sold off to new creditors for a fraction of the stock value.
Stock holders AND unions would have taken a bath, but behavior and expectations would have been corrected on both sides.
Originally Posted by ExNYer
WRONG! There were projects that if GM and Chrysler were allowed to go under that the result would be 40% unemployment in the US as all the support vendors closed also. The cost in terms of lost taxes, increased public assistance and the hit to the financial markets would have thrown the country into another great depression. EVERYONE says it was the right thing to do, well except you. Originally Posted by BigLouieAbsolute horseshit.
Absolute horseshit.+1
40% unemployment? Really? Where did you get those numbers?
From GM's attorneys or from GM's PR department?
Do you really think the failure of ONE company could boost unemployment from 10% to 40%? Ford was financially sound and Chrysler is too small. So you are basically saying that GM - by itself - would have boosted unemployment by 30% in a country or 310 million people. What are you smoking?
GM would have been sold for a fraction of the bailout money to its creditors in bankruptcy. They would have busted the union and began to make cars with about two-thirds the number of UAW members. Detroit would have taken a hit, but the rest of the country would have been fine.
We have TWO auto industries in this country - a domestic one (ford, GM, Chrsyler) centered in Detroit and a foreign one which is spread throughout the South and Southeast.
The Feds should have provided a liquidity boost of less than $10B while GM and Chrysler were shoved through bankruptcy. Originally Posted by ExNYer
The Feds should have provided a liquidity boost of less than $10B while GM and Chrysler were shoved through bankruptcy. Originally Posted by ExNYerAll these comments ignore a few facts. First, GM and Chrysler WERE shoved through bankruptcy. It was called a "managed bankruptcy" because it was pre-planned and accelerated in order to minimize the disruption to all concerned.
That's alright. We print 85 billion a month of fake money, every fucking month!Since we print 75 billion a month, why the crying over the supposed 10 billion loss to save 200,000 good paying jobs?
My bad they knocked it down to 75 billion this month.
100 billion, you are a funny guy...Originally Posted by IIFFOFRDB
All these comments ignore a few facts. First, GM and Chrysler WERE shoved through bankruptcy. It was called a "managed bankruptcy" because it was pre-planned and accelerated in order to minimize the disruption to all concerned.You are correct about the perverted bankruptcy proceedings that occurred.
My problem isn't with the bailout itself as much as it is with the bankruptcy. As the leading creditor, the federal govt dictated the BK terms for everyone involved. Obama bent all of the long-standing rules of BK (regarding debt seniority and security interests) to reward the UAW at the expense of taxpayers and other creditors. It was a backdoor way to shovel tax dollars to his crony union supporters and avoid concessions they would have made in a normal BK. Taxpayers didn't have to lose $10 billion. The US Treasury could have been fully repaid two years ago if the normal rules of bankruptcy had been followed. The fact that it didn't happen was a huge scandal and represented political corruption of the highest order - yet the MSM ignored it.
Also, everyone seems to think Ford is better managed because it didn't need any bailout money. The reality is more complex. Ford made a decision to leverage up and borrow billions from its banks and Wall Street just before the crisis hit. That gave Ford a pile of cash to ride out the crisis. So a lot of it was sheer luck and good timing. Here's a link if anyone is interested.
http://www.nytimes.com/2009/04/09/business/09ford.html? Originally Posted by lustylad