Quote:
Originally Posted by Riddil
Admittedly I've been out of the country for a few years, so maybe I'm not totally up to speed with current events, and the reasoning behind them.
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Numerous reasons. Some of the numbers you should have known from any responsible news report. GM is worth only $1.8 billion. They wanted $10billion from the government to merge with much less than $0.5billion Chrysler. At what point does any of that make sense?
Then GM, et al wanted another $25billion from the government. Then another $25billion after that. All the while doing nothing - zero - to solve their problems. Even flying executives to Washington in luxury private jets because GM's corporate rules say executives cannot fly commercially. Why? Commercial flights are too dangerous for GM executives - which is why GM maintained seven luxury private jets.
These are but samples of why GM is in trouble. And GM still has done nothing - zero - nada - to address any of their real problems.
We learn from history. When 1979/1981 Chrysler and Ford tried the same thing, instead, the American government did what any patriot and free marketeer would do. No aid was provided. Then Chrysler replaced bean counters with Lee Iacocca. Ford replaced their only problem - Henry Ford - with a car guy. Then both companies addressed problems and became profitable in years. You are expected to know the facts in this paragraph before you even posted. How to save a company? Eliminate the #1 reason for their troubles and the resulting stifled innovation - top management. Further reasons posted in
Saving the US Auto Industry,
Saving the US Auto Industry],
Saving the US Auto Industry,
Saving the US Auto Industry,
Saving the US Auto Industry,
and what happened last week in Washington:
Saving the US Auto Industry.
So why is this different for banks? A question that requires knowing details in so many posts in Current Events. A snapshot shows how what we knew only kept getting worse. Many posts on this page that cites things like NINJA in
Bush's Shrinking Safety Zone and
More Welfare for the Rich ,
early symptoms of the problem in
The mortgage and
The mortgage,
early attempts when we had no idea how much accounting was fraudulent in
The Crash, etc.,
another example of how naive we still were
The Crash, etc.,
some indication that things may be even worse in
Does Anyone feel like Bailing,
George Jr's secret change to throw more money at the problem in
Greatest raid of the Treasury yet. (tax code 382),
how much worse (even in October) the problem would become as demonstrated by AIG and another post on GM in
Does Anyone feel like Bailing,
how large the problem became by mid November with no end in sight and why - in
Sub-prime Bail Out,
and finally how little we know as even the biggest goes for a second rescue in
Does Anyone feel like Bailing.
Yes this post does not (yet) answer why banks should be assisted. But those reasons are more complex. If we were to apply justice equally, then finance institutions would never get such assistance. But they can better afford to buy politicians. Just from those above cited posts, notice that Goldman Sachs is a more honest institution. And yet even with government assistance, they were still going to reward their top executives with a smaller bonuses - only $67million each. Why? These executives could not survive on their base salary of $600,000 per year. Does this not say why finance companies get protection early?
Not completely. There is more. However economics takes revenge - and is not fair about it. When we needed to go after the problem when it was obvious with a 2001 bank failure, instead, our wacko extremists advocated more deregulation. The time to be fair about stopping a massive recession was before 2004. Now the rich stay rich AND all Americans must pay for their fraud and excesses. Unfortunately, even our government is still not attacking the excesses found in financial companies. Fear mostly. Worse, nobody still knows how to solve a problem that can only end when a significant drop in the American standards of living occur.
Appreciate the numbers - these are massive numbers - as cited in
Does Anyone feel like Bailing.
Feel free to describe our economic crisis as rape. Except we all but voted for it.