The Democrat Thread

[Jenksismyhero]

I feel pretty confident in saying that the #OWS movement as a whole strongly rejects libertarianism since it generally results in a propertarian minarchy and strict social stratification, at least according to liberal and leftist philosophy.

 

 

 

I'd say it's better for society to make sure the economy doesn't completely collapse, putting millions out of work and leading to widespread suffering during a severe economic depression than it is to make sure a few people get punished for being "bad." But AFAIK, GM and Chrysler did clean house and the investors weren't the ones that were really bailed out, so you should be happy that a million jobs were saved.

 

I'd also like to note that it was liberals and leftists pushing for tight controls on executive bonuses and compensation with the right (conservatives and libertarians) pushing back and decrying the end of capitalism.

 

I meant more the anti-protect the rich and entitled people/corporations angle that i'm in agreement with.

 

And don't you think that the whole letting the economy collapse is an oversell, just like the availability of private capital is/was? It would have taken years for the actual fall of those companies to happen. And that's assuming they would have fallen at all. At the end of the day I've guessing other companies would have stepped in to purchase the remnants and a lot of the various suppliers and manufacturing plants would have remained in business (after all, i'd bet a lot of those same suppliers/manufacturers also supply and manufacturer parts for other car companies...or gasp!...they might have innovated and done something else). Maybe a slow down, but not a complete closure. I think that angle is played up WAY too much.

[Jenksismyhero]

"GM" is not a person.

 

Whatever, same idea. Why on earth should I give GM credit for doing well AFTER such a debacle.

[StrangeSox]

Whatever, same idea. Why on earth should I give GM credit for doing well AFTER such a debacle.

 

...because it's not an individual person, and GM now doing well, generating profits and employing tens of thousands of people should be considered a good thing irrespective of past management failures?

[Jenksismyhero]

The collapse of jenks, inc. won't cause national unemployment to rise by several percentage points.

 

I agree 100% that, at least in the financial sector, many people have undeservedly made or expanded vast personal fortunes off of bailout money and that no one is seriously being prosecuted for the crimes that caused this collapse. Far too much money was given out with little or no control.

 

 

 

Rattner said in December that the deals will likely cost the government $14B, all told.

 

Balance that against the tax receipts generated from not losing 1M+ jobs and corporate taxes.

 

Right, so get too big to fail, the government will bail you out, a select few will get filthy rich in the process and the whole thing starts over again.

 

And btw, the whole GM being profitable could be a mirage. Wasn't there some big government contract they just signed in the last year or so? And aren't they shoving those Volts down their own employee's throats? Could have sworn I read stories just recently about that.

 

Here was the 25 billion figure I read about....at the end of last year.

 

http://hotair.com/archives/2011/11/17/good...s-14-3-billion/

 

 

[Jenksismyhero]

I might be making the government contract thing up. I could have sworn I read that somewhere.

[StrangeSox]

I meant more the anti-protect the rich and entitled people/corporations angle that i'm in agreement with.

 

Ok, but that's only a first-order agreement. The philosophical reasoning behind those ideas are likely very different.

 

And don't you think that the whole letting the economy collapse is an oversell, just like the availability of private capital is/was? It would have taken years for the actual fall of those companies to happen. And that's assuming they would have fallen at all. At the end of the day I've guessing other companies would have stepped in to purchase the remnants and a lot of the various suppliers and manufacturing plants would have remained in business (after all, i'd bet a lot of those same suppliers/manufacturers also supply and manufacturer parts for other car companies...or gasp!...they might have innovated and done something else). Maybe a slow down, but not a complete closure. I think that angle is played up WAY too much.

 

The problem here is that, much like ss2k5's posts, this is entirely an argument by assertion. It's not easy to find contemporaneous support for what you're saying, but it's very easy to find support for the idea that private equity simply was not available and that the result would be an unstructured liquidation. This support comes from all over the political and economic spectrum.

 

You're also missing a key component in that paragraph: it's precisely because Ford, GM, Chrysler and I believe the rest of the manufacturers producing domestically (Toyota, BMW, etc.) relied on the same supplier network that this was such a critical situation. GM, and to a lesser extent, Chrysler, represented a large portion of their business, and if they were to go down, the suppliers would as well. This would have impacted the entire US domestic auto manufacturing industry. Ford certainly didn't have tens of billions to swoop in and buy up pieces of GM. All of the auto manufacturers were bracing for substantial downturn in demand.

 

This would not have been a long, drawn-out process. GM and Chrysler had already gone to the well once in late 2008 because they were on the brink of being insolvent. There was not time for suppliers to slowly absorb a huge hit to revenues; there wasn't time for manufacturing plants to transition to other makes and models while still keeping people employed.

[bmags]

so then should we consider boeing unprofitable?

[StrangeSox]

Right, so get too big to fail, the government will bail you out, a select few will get filthy rich in the process and the whole thing starts over again.

 

And btw, the whole GM being profitable could be a mirage. Wasn't there some big government contract they just signed in the last year or so? And aren't they shoving those Volts down their own employee's throats? Could have sworn I read stories just recently about that.

 

Here was the 25 billion figure I read about....at the end of last year.

 

http://hotair.com/archives/2011/11/17/good...s-14-3-billion/

 

that change appears to be entirely based on current stock value. It's a floating number until those shares are sold. GM's stock price is above $26 right now. The article indicates that a revised estimate was due December 30th. I'd be curious to see what the current estimates are and if Hot Air has continued its diligent reporting, even if subsequent reports were more positive.

[StrangeSox]

Right, so get too big to fail, the government will bail you out, a select few will get filthy rich in the process and the whole thing starts over again.

 

Please note that, as a left/liberal, I strongly support the various bills meant to break up the big banks, limit executive pay and provide strong control over firms that accepted TARP money. It's been conservatives and libertarians fighting against those things the most, and a good dose of corporatist Dems (OBAMA!) as well.

[Jenksismyhero]

As with the tea party movement, i'm a fan of the idealistic goal, but understand that a lot of that actual meat and bones are unrealistic and/or unsupportable

The problem here is that, much like ss2k5's posts, this is entirely an argument by assertion. It's not easy to find contemporaneous support for what you're saying, but it's very easy to find support for the idea that private equity simply was not available and that the result would be an unstructured liquidation. This support comes from all over the political and economic spectrum.

 

You're also missing a key component in that paragraph: it's precisely because Ford, GM, Chrysler and I believe the rest of the manufacturers producing domestically (Toyota, BMW, etc.) relied on the same supplier network that this was such a critical situation. GM, and to a lesser extent, Chrysler, represented a large portion of their business, and if they were to go down, the suppliers would as well. This would have impacted the entire US domestic auto manufacturing industry. Ford certainly didn't have tens of billions to swoop in and buy up pieces of GM. All of the auto manufacturers were bracing for substantial downturn in demand.

 

This would not have been a long, drawn-out process. GM and Chrysler had already gone to the well once in late 2008 because they were on the brink of being insolvent. There was not time for suppliers to slowly absorb a huge hit to revenues; there wasn't time for manufacturing plants to transition to other makes and models while still keeping people employed.

 

I think you can make a pretty compelling case. Every single one of these auto manufacturers were investing tons and tons of money in China, which has become their bread and butter. They were setting up manufacturing facilities that other foreign manufacturers would have been very interested in. Yeah, a lot was crap, but i'm confident other competitors would have jumped in to purchase those assets for pennies on the dollar. I think it's faulty to just flat out assume that everyone would have stopped working the following monday. It might have been difficult for a time, people might have been unemployed for weeks or months, but eventually they would have gone back to work.

 

And perhaps that would have caused a wave of innovation you can't predict until businesses are forced to innovate. Maybe there would have been a big opening for those same suppliers to start manufacturing more green technology. Maybe the government would have been forced into providing all the green tech incentives earlier (and more of them).

 

I think it's just speculation that the end times would have been the result.

[StrangeSox]

That's a fascinating just-so story. I'm glad we didn't try that experiment, though, since an overwhelming number of economists believed and still believe it would have resulted in a collapse and hundreds of thousands if not millions of job losses.

[NorthSideSox72]

I still think we should have allowed the industry to consolidate down a bit. Specifically, let Chrysler go under, for the long-term betterment of GM and Ford. But that wasn't going to happen for a variety of reasons.

 

[Balta1701]

I still think we should have allowed the industry to consolidate down a bit. Specifically, let Chrysler go under, for the long-term betterment of GM and Ford. But that wasn't going to happen for a variety of reasons.

It pretty much did consolidate a lot. GM's production capacity went down by what, 25% or so? And it shut what, 15% or so of its dealerships?

[Balta1701]

Right, so get too big to fail, the government will bail you out, a select few will get filthy rich in the process and the whole thing starts over again.

Here's the remarkable thing though...GM is not too big to fail. If GM went into bankruptcy 6 months from now, or in February of 2008, etc., GM would be able to proceed through normal bankruptcy proceedings, and everything 2k5 has said would happen in 2008 would actually happen.

 

The thing that was different about 2008 was the credit freezeup. In that case, resources that would normally be available to manage funding vanished, and were completely replaced by the Federal Reserve and the Treasury Department.

[southsider2k5]

Here's the remarkable thing though...GM is not too big to fail. If GM went into bankruptcy 6 months from now, or in February of 2008, etc., GM would be able to proceed through normal bankruptcy proceedings, and everything 2k5 has said would happen in 2008 would actually happen.

 

The thing that was different about 2008 was the credit freezeup. In that case, resources that would normally be available to manage funding vanished, and were completely replaced by the Federal Reserve and the Treasury Department.

 

Well except for people who got financed...

[NorthSideSox72]

It pretty much did consolidate a lot. GM's production capacity went down by what, 25% or so? And it shut what, 15% or so of its dealerships?

You don't seem to understand the difference between consolidation and contraction.

 

[Balta1701]

You don't seem to understand the difference between consolidation and contraction.

GMAB.

[NorthSideSox72]

GMAB.

Seriously? We aren't talking semantics here (although even if we were, tearing into that would be right up your alley). There is a fundamental and very large difference between the Big 3 all having to contract, vs going from 3 to 2 with the 2 actually growing.

 

[Balta1701]

Seriously? We aren't talking semantics here (although even if we were, tearing into that would be right up your alley). There is a fundamental and very large difference between the Big 3 all having to contract, vs going from 3 to 2 with the 2 actually growing.

Versus having 3 of them with all 3 growing, like we have now.

[Balta1701]

There's clearly more than sufficient global demand to satisfy the existence of a company called "Chrysler", they just have had the same sort of crappy, short-sighted management that so many other US companies have had for the last decade+, and that left them a mess.

 

The US would not be better off if that demand were shifted to more foreign manufacturers because of inept management.

 

And then there's still the continuing statement that if one of them went down, it'd have killed enough suppliers to take down all 3.

[NorthSideSox72]

Versus having 3 of them with all 3 growing, like we have now.

First, as I said, the situation done as it was, was my second choice, and I wasn't hugely opposed to it. I wasn't one who wanted the whole thing to drive off a cliff.

 

Second, Chrysler has experienced some growth, but they are still struggling and still have fundamental problems... if it weren't for rental car fleets, they would not be making money. They products continue to be among the worst, in most classes where they have a model. They are run by a mildly psychotic Italian who seems to think his Fiat mentality will work here. Basically, I am pretty convinced that Chrysler will likely die back again and continue to be a laggard in the future.

 

Of course, I could be wrong, this is all just predictions.

 

[southsider2k5]

First, as I said, the situation done as it was, was my second choice, and I wasn't hugely opposed to it. I wasn't one who wanted the whole thing to drive off a cliff.

 

Second, Chrysler has experienced some growth, but they are still struggling and still have fundamental problems... if it weren't for rental car fleets, they would not be making money. They products continue to be among the worst, in most classes where they have a model. They are run by a mildly psychotic Italian who seems to think his Fiat mentality will work here. Basically, I am pretty convinced that Chrysler will likely die back again and continue to be a laggard in the future.

 

Of course, I could be wrong, this is all just predictions.

 

It isn't like Chrysler has a history of failure or anything...

[Balta1701]

Scientific proof that being wealthy makes one more likely to steal candy from babies!

 

(The report appears to be serious, but I'm not going to bother actually looking through the study, so no need to attack for it, just laugh).

[StrangeSox]

[HuskyCaucasian]

I am conflicted who I should be rooting for. I think Romney, but I'm not sure.

Edited February 29, 2012 by Athomeboy_2000