I didn't "defend" it in the sense that I thought it was a great idea. I said that given the situation, it was the best decision the government could make. Kind of like looking for the least ugly gal when the bar is closing.We could have done this:
. Originally Posted by pjorourke
''Between 1989 and mid-1995, the Resolution Trust Corporation closed or otherwise resolved 747 thrifts''
There is still uncertainty in the economy because there are still toxicity in the assets. The next crisis is going to be governments for taking on all the debt from your beloved bankers
What you fail to address is "To Big To Fail". The auto's had a great business plan , just like their Bank buddies. All the top executives take all the money from the profits upfront. All the workers take their security from the profits from the company at the end of their working life. If there is not enough for the poor working stiff at the end of the day, it does not effect the CEO that has driven the truck off the cliff by 1) Not priceing the asset properly 2) Taking to much out of the profit in the form of executive bonuses because they did not price it proplerly.
Bank runs are ugly and extremely damaging to the economy. The way the bank deal was structured, the government will make money on the program as a whole (including AIG) and never took any real risk. Auto's are a cess pool and financially an entirely different deal. As we've discussed, the banks were a liquidity problem. The autos had/have a failed business model -- they will never be healthy until they fix it. Originally Posted by pjorourke
That is why the Gini and difference between workers and CEO pay is so important.