Should we bailout the Auto Industry?
 

Should we bailout the Auto Industry?

Tawk amungst yaselfs:) I'm feeling vaklempted :D

But seriously, should we?

We already have...at least the first of many payments to come ;) I have a bigger problem with the billions we've given to the banks. They will only take our money and screw the common man harder with our own money...mark my words as it's already begun to happen :mad:

All these bailouts are just making things worst. if the banks are dumb enough to give millions in wages and bonuses, even though they can't afford it then they deserve to go bust and criminal proceedings bought against them.

Whats happened now is that the taxpayer in the states and uk are bailing out these thieves and still they're paying themselves millions in bonuses out of the taxpayers bailout.

In the UK there was an uproar when about 10 bigwigs in banking paid themselves ?50,000,000 in bonuses between themselves, and that was bailout money. But governments are too spineless to regulate the banking industry, so basically they make up the rules as they go along and still pay themselves silly money even for failiure.

Nice work if you can get it :cool:

The American car companies just don't get it.
I don't know if unions are all to blame or upper management.

For the auto manufacturers to fly to Washington in their corp biz jets, proves how little respect they have. They would have done much better to fly coach like everyone else. At least make an effort to show they care.

I think the top American auto company is American Honda. Go figure.

I don't like the auto industry bailouts, but as to the backing bailouts, I can only mention the massive economic crisis of 1927-1933 (I think), AKA the great depression. If my history teacher has his stuff right, a lot of its problems were caused by the banks going down.

bail no one out - may as well bail out all the people who`s home are being repossed - seems like a more worthwhile cause to me.Id rather see someone go without a car than a family being without their homes.
When the car manufactuers had it good they never passed on the cuts to the consumer so now times are hard why should the consumer then be forced to bail out the manufacters.
If they going down let them go down gracefully.

hallelujah, what great words of wisdom, I agree 100% Before bailing out the fat cats, bail out the folks that are about to lose their homes.

car makers have been taking us for mugs all these years, Why is it that we're still running our cars with petrol and oil, there are cars which are more cleaner and earth friendly running on water and electric, come on, the car makers are well in with the government, both are ripping us off left, right and centre.

Landrover have been bought by Tata an indian company, they bought both Landrover and jaguar for 2.3 billion dollars, now Tata are asking the uk Government for 1 Million Pounds in order to keep the workforce going.

makes me mad :mad:

Its a crime that the coverupment has given away these billions. AIG after recieving their bailout package, treated their executives to a 400k+ weekend get away.

GM who has recieved 13.4 Billion dollars has already said it will still be bankrupt by Feb 2009 and unable to pay anything back. What the heck is the point in giving a badly managed company 13.4 Billion they know, and the government knows won't be able to pay back.

Its criminal that this is going on, not a single person has been held accountable for any of it, nor will they ever be.

So instead of paying off homeowners mortages, and other debts, lets give the billions of dollars to the corporations who will then in return charge the consumer more interest, fees and other charges to gain the money back they know owe the government.

Basically we're giving them our money for the bailout, after they misspent/misused our money, and then you ready for it? We'll be paying them our money to pay their bailout bills if they ever do.

America is great isn't it?

Its not just the states, the UK is just as bad.

Governments give silly amounts of money to these hopeless companies, because they know they'll get a lot back in taxes and other charges, That not before a lot of people both in industry / banking and the government make millions themselves but getting companies in the position that they are now in.

No one wants to help the average joe, because it means that they just won't benefit as much.

Sad really, but until someone decides enough is enough, we're still gonna be mugs enough to pay through the nose for these idiots. :mad:

Amen... keep the house, take the bus.

on further thinking about this problem then maybe we should help these firms out.
Reason being if we dont then loads of people are going to find themselfs without jobs and without jobs a lot of people will lose their homes.So if we bailout the companies then we better make sure we get every penny back and this is not just a short term solution before they go under anyway.
Problem is we bailing everything out these days and i fear this is going to have a lasting effect for yrs to come.

The problem being is, that the idiots that created this mess in the first place will still be employed, will still get millions in bonuses and back pay and whats to stop them doing it again next year.

Not one single person has been blamed, or sacked as a result. if we bail companies out it has to be on our terms and conditions, and with benefits that work for us :D

Economic Darwinism is being thwarted. The guilty are not being punished. The innocent (workers and the like) outnumber them and should be protected.

If the government has to put money into a company, then the government should own it. I'm in favour of nationalisation of essential services, but for something not essential then I fully believe that if a government has to intervene they should have the right to take it over and then sell it to someone who will run it properly.

Rapscallion

but what happens if the goverment owns everything ?

Won't happen. Business owns the government.

Edit: What is good for GM, is good for the country. 50 year old quote.

It's the banks who are the real criminals increasing interest rates, high executives living in luxury (giving themselves hefty bonuses) and are the first to extend their hands out and cry wolf at the expense of the taxpayers.

The corporate scroungers have it easy knowing they can pull out the bail out clause out of their ass whilst people are losing their homes whilst these high end companies are fed and injected with more cash and a silver spoon fed to them.

The government shouldn't bail out any large corporation and show the same treatment they show to the smaller businesses that fold by the thousand s each year.

Unless we/you/us wanted millions upon millions of people out of work AND homeless I'd say yes we had to bail them out...

No, do not bail anyone out.

/me is majoring in economics.

I say if the banks don't want to go bust then they should claw back some of the millions spent on bonuses and gold plated pensions. How can anyone who works for a bank expect to get silly money like this when the banks have done so badly.

Bankrupt the greedy bankers ;) and lets have a bank run by the people for the people.

Look at this guy....

$10 million bail was secured by property??? Whats that about, he bought those properties with the proceeds of crime, how can he use that as bail??? Its like i've just robbed the bank of 5 million and then using that money for my bail !!

Why are governments so scared to do the right thing???

Matters like this should be put to the public vote and let us have a say on whether we want to bail them out.After all its us who are going to be paying if all this goes belly up.

Bail is simple a contract of guarantee that he will show up in court. The amount set is the perceived cost of apprehending him if he does not appear in court and flees the jurisdiction. If he does appear than everything is refunded.

He hasn't been convicted of any crime. He stands accused but not convicted. There is a very big difference. If convicted then his assets will most likely be liquidated to pay off claims from those defrauded. Legally he cannot be stripped of his assets before a trial in which he is found guilty of a crime.

--------------- Added 03 Jan 2009 at 07:53 ---------------

Welcome to a Federal Republic if you are in the United States. You elect Senators and State Representatives to present your case to the federal government and in your best interest. These representatives cast their votes in your favor so that something can be accomplished. If everything went to a public vote then nothing would ever get done.

If you live in the United States, you are first and foremost a citizen of your state which has all the rights and privileges of any other country in the world. The state in turn has become part of the Republic through majority vote of the members of that Republic. In return for providing the Republic with resources found in the state, the Republic promises to keep the state and its citizens safe from outside influences (military) and to negotiate better trade deals with other countries. Also the individual states have the right to elect the Chief of the Republic and the Commander in Chief. Of course this is the President and why we have the Electoral College.

You can change these things through amending the Constitution does require a 2/3rds vote of both houses of Congress and 2/3rds of the states to ratify it through the process outlined in the state's constitution. Individual states can put the ratification to a public vote or can approve it through their own elected officials.

In the case of banks here in the United States, you will find a lot of the CEOs and management out of jobs. When the FDIC seizes a bank, it becomes the property of the Federal Government. That property is then sold off to more financially sound institutions either whole or piecemeal. The management of those banks usually do not have jobs after the transition period. The majority of the Financial Bailout is going towards seizing these banks that are already failing, securing their assets to protect consumer's money and then reselling those assets to other firms under specific terms and loans. They aren't just writing checks to CEOs to do with as they wish. In the case of traditional loans to financial institutions, the receiving bank is often tasked with taking on underperforming assets at a loss as well. You see this in the case of the Bank of America merger with Countrywide Mortgage or the purchase of Washington Mutual by J.P. Chase Morgan. Both Bank of America and J.P. Chase Morgan received loans to help them deal with the underperforming assets and prevent their own collapses.

Letting these underperforming assets fail would be more detrimental to the economy. Not only would thousands of people lose their jobs causing a job loss domino as less money is in the economy but customers would lose 100s of billions of dollars.

The Auto Industry is a little different as technically they are not financial institutions. However GM does own one of the largest financing companies in the country providing everything from auto loans to bankruptcy loans. These loans are given not only to individuals but to corporations and countries around the world. In the scheme of a $1.5 Trillion bailout package, which includes $700-800 Billion in the Financial Aid Package and another $755 billion in a proposed consumer stimulus package plus associated costs, $20 Billion dollars to the Auto Industry is peanuts.

I do believe there should be higher constraints on how they spend the money. Higher fuel mileage, more US employees, regional economic stimulus amongst them but really preserving and enlarging the manufacturing base is key to preventing a global economic depression never before seen by this world. A country's GDP cannot rely solely on digital money transfers and selling lattes to Soccer/Hockey Moms who use products manufactured elsewhere. To misquote a former President - It is important that we make computer chips instead of potato chips.

Well said :up:

As much as it pains me to say, I have to agree with this comment. I watched a program on the History Channel last night comparing this mess to the one in 1929 and thats exactly what the Treasury Sec. did back then...nothing and let the system try and correct itself and we all know what happened then.

The question is ofcourse if you should save the car industry. If i am not mistaken then the US car manufactors are already for many years in problems. You should only save such an industry if it can, in normal circumstances, perform healthy. It might be better to invest the money in alternative new industries that will provide a stable economy in the long term.

Let?s make Wayne Luke our first President of vB.org!

p.s. it seems like he have the time to write all those things :p

<a href="http://mises.org/books/socialism.pdf" target="_blank">http://mises.org/books/socialism.pdf</a>