Thread: Pandoras Box?

Banks/Lenders and now the possibility of the auto-makers. AIG wamts more.

What do you think of the bail-outs and why.
Sue

Probably necessary. Will probably cost much more than necessary. Will undoubtedly be completely forgotten by the time we get into this situation again.

j

Do I understand this correctly that you mean that the State helps companies economically and sometimes buys stocks in it and even takes over the companies in times of crisis?

If so I think it's good, or rather, necessary. I believe it's the only way the auto industry for instance in america can survive without canning most of the workers. The state helping out companies in times of crisis is one of its purposes i believe. It would cost the americans much more if the companies went bankrupt or lost significantly than if the state would help the companies to get on there feet again.
This is nothing uncommon, I dont know in america but I suppose the americans are more sceptical to these sort of things. Mainly because of the negative view americans have on the state and the almost laizze faire capitalist ideals that are present.
In Europe however there is another tradition that is not that hostile to these sorts of things. I guess it's due to the strong position of mainly socialdemocrats, both historically and now.

Nobody wants a financial crisis but when it comes it is better that the state takes some responsability, if they don't the consequences will be more devastating to the companies, the employees, the state, economy and the people in general.

Well, I'm all for getting return on investment, especially when it's done with tax-payers money. If (and that's a big IF) the bailout will not only be repaid, but possibly turn a profit, then yeah, I believe it's a good thing. If on the other hand the bailouts are done with public money for private gain (and not public gain), then I believe this is the largest and most blatant form of cronyism I've ever seen.

Only time will tell, I guess.

Mark

I am flat-out against it. the whole "too big to fail" paradigm blurs the line between gov't and private sectors, and dangerously so. if a company sucks at doing business, they need to go out of business, period. i am a big free market advocate, and so i see this as the opposite of helpful.

if anyone loses their entire retirement, then it's their own fault for investing poorly. it's called diversification, and if you aren't already doing it, call your broker right this second and correct that mistake.

I'm in the same boat as Jockeys. If it was my company that was going under because of mismanagement, the government isn't going to come bail me out. Why should the big boys get special treatment? Anyone can see that their business model sucks. As my dad would say, sounds like a personal problem.

Again and again, they come to the brink of bankruptcy and act like it just happened. The foreign automakers have none of these problems, their vehicles are cheaper, and many of them ship (or used to) from their home country. If they can't sell American vehicles made in North America to Americans for profit without price gouging, something is obviously wrong. The Big 3 could all go down and this country would be just fine. All our cars would still run, there would still be inventory to be sold, and plenty of foreign cars to fill the gap where our fellow Americans didn't have the integrity to stand. Then, someone with a dream and a plan would come in and revive what used to be the American Spirit in the auto industry. I don't understand why everyone thinks life will suffer because these mega corporations with bad business plans go down.

Ironically, the downfall of the American auto-industry could have been prevented had they learned from communism. The industry had the idea that "bigger is better" and rode the horse until it dropped, and then until it died and then until it decomposed. Only then did the big 3 decide to go smaller, but it's too late without a big government bailout. As you can see, once a business gets too big, it loses flexibility and then bad things start happening.

Corporate welfare is bad policy. Always. As an advocate of ordered liberty the one thing that scares me more than the Almighty State is Big Business. Their insidious comings and goings always bode ill for the common man. A real wolf in sheep's clothing.

What happens if the companies still can't turn a profit and default on the bailout loans?

Originally Posted by Whiggamore

Corporate welfare is bad policy. Always. As an advocate of ordered liberty the one thing that scares me more than the Almighty State is Big Business. Their insidious comings and goings always bode ill for the common man. A real wolf in sheep's clothing.

Dont stop now! Preach it brother! Personally I believe the capitalists own/control the government and they are eating us up.

A public debt is a private treasure!... Nicholas Biddle