GM and Chrysler

[Embar Angylwrath]

When the whole bailout thing started, several of us argued that one or two of the Big Three should be allowed into bankruptcy, that it had to happen, that US policy shouldn't support a failing business. Several of you argued against a bankruptcy, even an organized and pre-packaged bankruptcy. Well, here we are, months (and hundreds of billions of taxpayer's money) later, and guess what.. GM is preparing for BK, and Chrysler may not be too far behind.

Did we really have to spend all that money (close to 200 billion) to get here?

Now, on to other semi-related subjects. Some here (me) argued the best way to get toxic assets off balance sheets was a reverse-auction. And guess what's now in the works (although the Obama administration put some extra spin on it by practically wiping away any risk to buyers of toxic debt)... a reverse auction.

And finally, for the "I told ya so" Trifecta, I argued for the BK courts to treat mortgages like any other debt... allow the judge to write down the amount. It effectively nullifies the stonewalling of the mortgage servicers, and puts some stick on the banks to get serious about loan modifications. Guess what....

Obama has my direct line if he wants anymore advice before we spend another 10 trillion in taxpayers dollars....

goddamit...

[Lurker]

We went over this already. Obama hasn't spent 10 trillion in taxpayer dollars.

Nice call on the reverse auctions. Hopefully it works.

Mortgages... no brainer.

Can you source the 200 billion for the auto industry figure? Extending them a small loan was the right call at the time. Obama made the right move not writing them a blank check after their plans proved inadequate, and if that leads to controlled restructuring through brankruptcy so be it. That was my position at the time.

You left out this one though. Increased oversight of all financial companies... just like you argued for.

[Embar Angylwrath]

My bad on the GM/Chrysler loan extensions.. it was about 17.5 billion, plus whatever the Obama admin gave them for the next 30-60 days.

That close to $20 billion in "loans" aren't guaranteed. The US taxpayer is on the ..... oh shit.. my dog just farted and I'm about to throw up... swallowing bile and going to my happy place now.... ok, back..

So.

The US taxpayer is on the hook. Why didn't we make those with skin in the game take the heat? All the bondholders? We subsidized their loss! Fuckin' A! Look, I'm a ruthless Capitalist at heart, really I am. Capitalist with a capital "C". But taxpayers should NOT be paying for the risks others took, I dont care how big the company is. Look at it this way Lurker... should a company be exempt from capitalisitic forces just because it employs too many people? Should it be protected by government policies? Should government be in the business of business?

[Kulaf]

You are opening a really sticky door Embar.....because it wouldn't surprise me for Lurker to respond with......well we never should have allowed GM or any other company to get so big that they threaten the economy if they fail......which means more regulation and breakup of our multinationals.

[Embar Angylwrath]

Given the altnernative of subsidzing loss with taxpayer money, I'll take the lesser of two evils and be ok with limiting the size of companies below the point where a collapse won't cause the government to hand out dollars.

I truly am surprised at the silence from the left with what really is unconscionable amounts of corporate welfare. Tax breaks for oil companies and ag subsidies are nothing compared to this.

[Lurker]

You seem to be conflating steps taken and money spent trying to prevent the financial infrastructure from collapsing with money given to companies like GM and Chrysler. Can you clarify which we are discussing in this thread?

[Embar Angylwrath]

My last post was in response to Kulaf's post.

[Lurker]

The reason I asked is because the money given to GM and Chrysler was many times smaller than the "tax breaks for oil companies and ag subsidies" are every year. You're post seemed to indicate otherwise.

I think the loan to GM and Chrysler was the right move last year. 17 billion to prevent (or most likely delay) the collapse of the US auto industry in the midst of the economic shitstorm was money well spent.

[Partha]

I truly am surprised at the silence from the left with what really is unconscionable amounts of corporate welfare.

I don't know about anyone else, but I got tired of talking about it with blockheads who think regulation is a four letter word and greed is an outmoded concept.

[Embar Angylwrath]

The reason I asked is because the money given to GM and Chrysler was many times smaller than the "tax breaks for oil companies and ag subsidies" are every year. You're post seemed to indicate otherwise.

I think the loan to GM and Chrysler was the right move last year. 17 billion to prevent (or most likely delay) the collapse of the US auto industry in the midst of the economic shitstorm was money well spent.

Spending money to delay the inevitable is foolish and wrong-minded, imho. When it all broke open almost every credible expert on the auto industry said that one or two of the Big Three coould not be saved. That one or two would most likely fail, regardless of the money they received, because their business models just weren't viable anymore. Not many in politics wanted to hear that, especially those with constituencies heaviliy tied to auto industry. Remember when some Democrats broke off from the mainline and tried to push an agenda on their own? That's what happens when we politicize an economic equation.

Wait until we have to deal with a dismantling of AIG. If AIG is "too big to fail", and the US now owns 80% of it, then the next logical step is to force the company to break itself up and sell parts of it off. And guess where all the bad parts of AIG are going to land? At the foot of the US taxpayer. Makes me so goddam mad...

[Ddrak]

You are opening a really sticky door Embar.....because it wouldn't surprise me for Lurker to respond with......well we never should have allowed GM or any other company to get so big that they threaten the economy if they fail......which means more regulation and breakup of our multinationals.

That's actually a workable economic proposition and probably a logical extension of antitrust law.

Dd

[Partha]

Wait until we have to deal with a dismantling of AIG. If AIG is "too big to fail", and the US now owns 80% of it, then the next logical step is to force the company to break itself up and sell parts of it off. And guess where all the bad parts of AIG are going to land? At the foot of the US taxpayer. Makes me so goddam mad...

Funny, you never talked about the S&L's in quite that manner.

[Embar Angylwrath]

Funny.. the S&L crisis happened 15-20 years ago. I haven't been posting here that long.... moron.

[Fallakin Kuvari]

Nor has anyone else.

[Embar Angylwrath]

Exactly my point. Clearly Partha needs his meds adjusted.

[Partha]

It's certainly been mentioned on these boards before, and I never heard howls of outrage from you or anyone else when it was discussed. Plus, it's the same damn thing. You saying Poppy Bush handled that wrong?

[Embar Angylwrath]

Links please. I don't recall it ever being a topic of its own. Maybe mentioned somewhere in a post someplace in some type of anecdote, but not as a formal topic of debate. Probably because many on this board weren't even born yet when it was going down.

[Partha]

You know damn well that damn little from Beeker's tenure on the board survives except what's in the Hall of Flame, and that's when we discussed it. Convenient memory hole for some people.

[Embar Angylwrath]

Ah, I see. Blaming your inability to produce the thread on Beeker's tenure. Gotcha.

[Partha]

So you're saying that Reagan handled the S&L's wrong? Is that what you're saying?