Duped or Complicit? The bad idea of bailing out General Motors turns into a scandal

  1. You have chosen to ignore posts from ComingLiberalCrackup. Show ComingLiberalCrackup's posts

    Duped or Complicit? The bad idea of bailing out General Motors turns into a scandal

    National Review:

    "The American government should not own a car company because it inevitably creates a conflict of interest; the federal government is financially invested in the company making the cars and is hoping to make (or at least not lose) money off their sales, at the same time that it is inspecting, investigating, regulating, and punishing both that company and its rivals."

    In February 2010, by which time the era of Government Motors was well underway, Toyota faced claims that its cars were accelerating unexpectedly. Obama’s transportation secretary, Ray LaHood, testified before a House Appropriations subcommittee and, in the words of USA Today, “went nuclear in his tirade against Toyota,” declaring, “My advice is, if anybody owns one of these vehicles, stop driving it.” Toyota stock plunged

    In March of this year, Toyota agreed to pay a $1.2 billion fine to settle a four-year federal criminal investigation into whether it properly reported safety complaints about the sudden acceleration of its vehicles to regulators. (Note that the alleged crime is failing to properly report the complaints, not manufacturing unsafe cars.)

    Meanwhile, in 2007 and 2010, the NHTSA considered but ultimately declined to start a formal investigation of the GM vehicles and reports of air bags failing to deploy.

    Thus the Obama administration’s Departments of Transportation and Justice came down like a ton of bricks on a Japanese automaker about unproven allegations of defects, while the government-owned American company continued to make and sell cars with proven potentially fatal defects, even after the chief of the NHTSA’s Defects Assessment Division twice proposed investigations....

    ...The American government should not own a car company because it inevitably turns the leader of the free world into a car salesman....[Obama] put his seal of approval on GM and its cars, again and again. His speeches from that era included pledges and promises that look awful in the light of what we now know. In a speech on June 1, 2009, President Obama said, “From the beginning, I made it clear that I would not put any more tax dollars on the line if it meant perpetuating the bad business decisions that had led these companies to seek help in the first place.”

    Obama held a rally at the General Motors Lordstown Assembly Plant in Warren, Ohio, on September 15, 2009, touting the popularity of the Cobalt as he praised the Cash for Clunkers program....

    The president and his fans find themselves insisting, simultaneously, (a) that losing $10.5 billion in bailing out General Motors was absolutely the right thing to do, because GM is a good company full of good people making good cars, and (b) that GM’s actions before the bailout, at the time, and afterwards are an abominable outrage, demonstrating that it is a reckless, selfish company full of irresponsible people making cars that kill people if the key chain is too heavy.

    The contradiction is too great. So they prefer to avoid looking at the issue too closely.....

     
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    Re: Duped or Complicit? The bad idea of bailing out General Motors turns into a scandal

    It was a bad idea to bailout GM, but the issue above is a symptom, not the problem.  If GM was allowed to fail, it wouldn't have disappeared.  Worse case, other companies would ramp up to meet the hole it's demise would cause, at better prices, and better quality.  This is how markets work.

    The best case would have been that GM would restructure, being a leaner, meaner company, all without the large infusion of our money, which is not intended to be allocated for such market distorting nonsense.

    Instead, we have a failed investment, a still too large and inefficient company, government invovlement in design and corporate governance, and a company still intent on selling crummy cars.

     

     
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  4. You have chosen to ignore posts from DamainAllen. Show DamainAllen's posts

    Re: Duped or Complicit? The bad idea of bailing out General Motors turns into a scandal

    In response to twelve_angry_men's comment:
    [QUOTE]

    It's amazing to watch how far some people will distort reality for partisan politics.

    The investigations into GM defects started as far back as 2001 but partisan apparatchicks are blaming Obama for not acting soon enough.

    Toyota's defects surfaced in 2009, the Obama admin moved swiftly to investigate the issue and won a court judgement against the company for fraud and deception. Now those same political apparatchicks are trying to blame Obama for acting too quickly and forcefully.

     

    In 2008, little-Bush gave GM and Chrysler (a private company at the time) an $18 billion bailout in return for a 'promise' to reform. His Dept of Energy added another $25 billion in loans for the same 'promise'.

    Obama did have the option to allow the industry to fail, but that would have cost not only the $40+ billion already paid out, but the additional loss of 5% of the GDP of the country and millions of jobs in the midst of the worst financial crisis since the depression.

    The big 3 account for fully one quarter of the manufacturing output of the US, by far the most of any single segment in the country. Allowing that segment to fail would have certainly plunged the country into a depression worse than the 30's.



     

     

    [/QUOTE]

    Its funny because some want to portray the loss of 10 billion dollars, a pittance in terms of bailout money compared to what was pushed into the financial sector, as a catastrophic loss while simultaneously advocating for a position that would have cost the american tax payer at least 4 times that amount in bailout funds, all in a pursuit of their poitical dogma.  Meanwhile, instead of simply giving the money away the Obama admin enforced repayment of the funds and allowed GM to get back on its feet and a shortly therafte it became, again, the biggest carmaker on the planet.

    If Obama was playing favorites with American car companies, then why haven't they dragged Nissan into hearings?  Nissan is recalling nearly a million cars for faulty airbags.  Instead we see GM getting flogged.  

     
  5. You have chosen to ignore posts from DirtyWaterLover. Show DirtyWaterLover's posts

    Re: Duped or Complicit? The bad idea of bailing out General Motors turns into a scandal

    It's a bad idea to have surgery to remove cancer because it will leave a scar.

     
  6. You have chosen to ignore posts from ComingLiberalCrackup. Show ComingLiberalCrackup's posts

    Re: Duped or Complicit? The bad idea of bailing out General Motors turns into a scandal


    When angryman childishly calls the former President "baby Bush" or little Bush" , one knows the traget has been hit, and there is no real comeback...

    1) The American government should not own a car company because it inevitably creates a conflict of interest; the federal government is financially invested in the company making the cars and is hoping to make (or at least not lose) money off their sales, at the same time that it is inspecting, investigating, regulating, and punishing both that company and its rivals."

    agree or disagree?

    2) Obama did not save the car industry. The Obama bailout had more to do with preserving the existing contracts the United Autoworkers Union have with GM & Chrysler than with the health of the corporate bottom line or institutional longevity.

    GM would have survived without the Obama bailout. Other car companies did not get a bailout!

     
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  8. You have chosen to ignore posts from ComingLiberalCrackup. Show ComingLiberalCrackup's posts

    Re: Duped or Complicit? The bad idea of bailing out General Motors turns into a scandal


    "...especially the very same 'principal' that caused the financial catastrophe to begin with."

    Strange statement, given that the financial catastrophe was caused by 'principled' leftist government policies which forced banks to give out bad loans...loans the free market would never have allowed.

     
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  10. You have chosen to ignore posts from DirtyWaterLover. Show DirtyWaterLover's posts

    Re: Duped or Complicit? The bad idea of bailing out General Motors turns into a scandal

    In response to ComingLiberalCrackup's comment:
    [QUOTE]


    When angryman childishly calls the former President "baby Bush" or little Bush" , one knows the traget has been hit, and there is no real comeback...

    1) The American government should not own a car company because it inevitably creates a conflict of interest; the federal government is financially invested in the company making the cars and is hoping to make (or at least not lose) money off their sales, at the same time that it is inspecting, investigating, regulating, and punishing both that company and its rivals."

    agree or disagree?

    2) Obama did not save the car industry. The Obama bailout had more to do with preserving the existing contracts the United Autoworkers Union have with GM & Chrysler than with the health of the corporate bottom line or institutional longevity.

    GM would have survived without the Obama bailout. Other car companies did not get a bailout!

    [/QUOTE]

    GM needed a loan.  There was no financial institution able to give GM a loan because they were in a smoldering heap.

    Had the country's financial markets not been destroyed, maybe a large bank in a position to give them a loan.

    Kind of like how the FED stepped in and started making loans to non-banks.

     
  11. You have chosen to ignore posts from ronreganfan. Show ronreganfan's posts

    Re: Duped or Complicit? The bad idea of bailing out General Motors turns into a scandal

    In response to DirtyWaterLover's comment:
    [QUOTE]

    In response to ComingLiberalCrackup's comment:
    [QUOTE]


    When angryman childishly calls the former President "baby Bush" or little Bush" , one knows the traget has been hit, and there is no real comeback...

    1) The American government should not own a car company because it inevitably creates a conflict of interest; the federal government is financially invested in the company making the cars and is hoping to make (or at least not lose) money off their sales, at the same time that it is inspecting, investigating, regulating, and punishing both that company and its rivals."

    agree or disagree?

    2) Obama did not save the car industry. The Obama bailout had more to do with preserving the existing contracts the United Autoworkers Union have with GM & Chrysler than with the health of the corporate bottom line or institutional longevity.

    GM would have survived without the Obama bailout. Other car companies did not get a bailout!

    [/QUOTE]

    GM needed a loan.  There was no financial institution able to give GM a loan because they were in a smoldering heap.

    Had the country's financial markets not been destroyed, maybe a large bank in a position to give them a loan.

    Kind of like how the FED stepped in and started making loans to non-banks.

    [/QUOTE]

    GM needed to go bankrupt.  That's the process that clears out the BS of corporations that go bad.  A better industry would have emerged, not this multimillion dollar sinkhole that you lefties are so proud of.

    Funny how corporations are bad to you lefties, until it comes  to GM.

     

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