GM on top again

[Lust4xxxLife]

Well, well... Thanks to Obama's actions in the early days of his Presidency, GM is the world's number one car maker again.

If any of the current GOP candidates had had their way, GM would have been allowed to fail, likely half the jobs would have been lost during restructuring, many smaller businesses that supply GM would have failed, and the carcass would likely be under foreign control.

Instead, GM is back on top and getting healthier each month, and because the Obama government structured the support as an investment and not a bailout, the taxpayer is going to recognize a significant profit by next year.

Any comments from the foaming-at-the-mouth Obama haters? Would you rather have seen no investment and the livelihood of 50-100K families impacted? It seems to me that the Obama government used the capitalist system for the advantage of the taxpayer instead of for just the select few.

Curious to see how others will figure out how to position this victory as a failure or a mistake.

Bring it on!

Cheers,

L4L

[Boltfan]

I think you make a good deal of assumptions of how a bankruptcy would have proceeded.

How many families got fucked out of their bond investments because he circumvented their first right at bankruptcy.

I am happy GM worked out, and happy what was done worked. I am just not willing to make the leap that it is the ONLY thing that would have worked, and that using the bankruptcy system in place would not have been a similar outcome.

[JDNorthface]

Originally Posted by Lust4xxxLife

... GM is the world's number one car maker again.
...

I suppose that depends on how you define "number one". No one I know ever considered them a top car manufacturer.

[tsrv4me]

How come FORD rejected the bailout and have allready paid off their debt and were back in the running long before GM ..........but it is good that GM made it back ...........now the GREED will take over and we will probably have to bail them out again....but Obama took the Social security money from us older citizens .......no raise in SS for two years ...of our own money ....and gave it to the Unions and GM .......... NOW is HE going to pay us back with our own money that has been stolen over the years ????? Just a thought ......

[Lust4xxxLife]

Originally Posted by JDNorthface

I suppose that depends on how you define "number one". No one I know ever considered them a top car manufacturer.

Volume. I don't consider them a great car maker either, but I guess there are a lot of people around the world who do. Even a lot of people on this board who swear by Vettes.

[Lust4xxxLife]

Originally Posted by Boltfan

I think you make a good deal of assumptions of how a bankruptcy would have proceeded.

How many families got fucked out of their bond investments because he circumvented their first right at bankruptcy.

I am happy GM worked out, and happy what was done worked. I am just not willing to make the leap that it is the ONLY thing that would have worked, and that using the bankruptcy system in place would not have been a similar outcome.

You're right, I did make a lot of assumptions based on historical precedence. However, never before have I seen a bankruptcy create financial gain for the taxpayer, have you? I think that's worthy of recognizing.

L4L

[Lust4xxxLife]

Originally Posted by tsrv4me

How come FORD rejected the bailout and have allready paid off their debt and were back in the running long before GM ..........but it is good that GM made it back ...........now the GREED will take over and we will probably have to bail them out again....but Obama took the Social security money from us older citizens .......no raise in SS for two years ...of our own money ....and gave it to the Unions and GM .......... NOW is HE going to pay us back with our own money that has been stolen over the years ????? Just a thought ......

Ford were in a better position to begin with because they had strong leadership already. Ford saw the crisis coming and borrowed a big pile of money while they still could. They also put in place a CEO who is product-oriented, not just an overpriced accountant. Kudos to Ford!

Besides turning a profit for the taxpayer, the other benefit of Obama's investment strategy (versus bailout) is that it gave them the legitimate authority as a major shareholder to replace the failed leadership at GM, and that is a big part of the recovery, in my opinion.

BTW... I'm just as surprised as anyone that this worked out.

As for your "Obama took our Social Security" comment, give me a break. I knew somebody would derail the thread with another issue rather than acknowledge an Obama victory. Well, all I can say is just wait until you see the deep cuts coming in your social security if Obama is defeated. Are you not watching the debates? When these big business puppets talk about protecting the military and cutting costs 'that we can't afford', what do you think they're talking about? They will continue to lavish rich contracts on the military industrial complex while cutting back on middle and lower class social benefits. Yes, that means YOU and your SS. At the same time, they'll be protecting tax breaks for their funders/buddies/'job creators'.

BTW, don't forget that George Bush squandered a surplus and put us in the hole with a bullshit war for oil. Also, in EIGHT YEARS of power, he did nothing to address the predatory mortgage business (that was started by Clinton and Newt). You might want to consider that as part of your SS problem too.

Food for thought...

L4L

[pyramider]

Originally Posted by Lust4xxxLife

You're right, I did make a lot of assumptions based on historical precedence. However, never before have I seen a bankruptcy create financial gain for the taxpayer, have you? I think that's worthy of recognizing.

L4L

I am willing to wager the taxpayer will not see any financial gain.

[Lust4xxxLife]

Originally Posted by pyramider

I am willing to wager the taxpayer will not see any financial gain.

The taxpayer will definitely come out ahead on this particular question. That's a given now. I think your point is "what will the government do with this return?"

I think both parties have their special interests that will swallow up and squander any gain. I don't believe either party will use the gain to pay down the debt or reduce the deficit. We need a new party. Let's call them 'Progressive Conservatives'. Fiscally responsible yet not socially irresponsible.

L4L

[durango95]

GM Should have gone under, what Obama and congress did was unconstitutional. The government put about 3,000 small business owners under last year alone, more than 300 local restaurants that employed 3,000 people in the DFW area closed last year. The Obama administration and Democrats have a more than horrible record for hurting small business owners in this country. The raising of the minimum wage three times in three years were just the start of the great recession. Rasing minimum wage caused small business's to stop growing and hiring. Since small business in this country make up 55% of the total economy is it a surprise that we were into a very diffifcult economic time?

GM still owes more than 50 billion for the bailout and that money will never be repaid. Our country seeing a profit on the GM investment? Not going to ever happen.

[Boltfan]

You have historical precedence of a bankrupcy as large as GM would have been?

Please cite it.

It was unprecedented. It would have been a challenge to be sure. You are glossing over the losses many took for the "government" and "taxpayers" to get a profit.

http://www.businessweek.com/news/201...ess-price.html

According to that article boldholders received 30 cents on the dollar for their stake. Are the taxpayers going to reimburse them the difference? GM certainly had much more than 30 cents on the dollar in assets so more would have been recovered in a traditional bankruptcy. More of the goverment "choosing" winners and losers in deference to the laws as written.

http://dealbook.nytimes.com/2009/05/...m-bondholders/

You have no historical reference to provide to show that all of these companies supplying them would have gone out of business and the job losses incurred.

Again, my point is that regardless of whether or not this has appeared to work I challenge your assertion that the alternative would NOT have worked.

Originally Posted by Lust4xxxLife

You're right, I did make a lot of assumptions based on historical precedence. However, never before have I seen a bankruptcy create financial gain for the taxpayer, have you? I think that's worthy of recognizing.

L4L

[durango95]

Lots of major companies have gone Chapter 11, and then 13 and some 7 and I am talking about major companies yet things still kind of went along. The US had major steel companies at one time and most of them are gone. There are no TV manufacturing companies left in this country, and several airline companies are gone. American Motors gone yet its now 2012 and we are rolling along. The government cannot even run the post office and yet they want to control business. I say if a company is in trouble and goes under thats the way it goes.

[cookie man]

L4L
I actually agree with you, and I am a free market kinda guy. I think the bailout was the lesser of two evils. The american auto indusrty had been fading for several years and were already in trouble. Then you throw in the financial crisis with housing and the banks, and I think it would have been too chaotic for a bankruptcy plan to be inacted without an enormous amount of suffering for a whole lot of folks.

GM will still owe the tax payers a lot of money that can't be recooped, but the alternative I feel would have been much worse.

Give Bush some credit as well. This financial collapse did not become apparent till near the very end of his presidency. Going against his Republican constituents, he opted to start the bailout process for both GM and the banks. Then your buddy Obama detoured the money for his social agenda...can you say "setback".

I hope we are never in the position for this shit to happen again...but we will thanks to greed.

For the record I am a GM stockholder and down a whole lot of money.

If Obama is such a friend of the auto industry and jobs, why would he not approve the Keystone pipeline....such a bonehead. It would help create jobs and keep oil prices down which helps sell more cars. After studies by environmental groups for three years, the route has been tweeked and should be started. Instead he is postponing it until after the election.

[Guest032516]

Originally Posted by Lust4xxxLife

Well, well... Thanks to Obama's actions in the early days of his Presidency, GM is the world's number one car maker again.

If any of the current GOP candidates had had their way, GM would have been allowed to fail, likely half the jobs would have been lost during restructuring, many smaller businesses that supply GM would have failed, and the carcass would likely be under foreign control.

Instead, GM is back on top and getting healthier each month, and because the Obama government structured the support as an investment and not a bailout, the taxpayer is going to recognize a significant profit by next year.

Any comments from the foaming-at-the-mouth Obama haters? Would you rather have seen no investment and the livelihood of 50-100K families impacted? It seems to me that the Obama government used the capitalist system for the advantage of the taxpayer instead of for just the select few.

Curious to see how others will figure out how to position this victory as a failure or a mistake.

Bring it on!

Bring it on?

OK. Here it is.

As someone pointed out during the Chrysler bailout in the late 70s/early 80s, the danger with a government bailout is not that it won't work. The danger is that it will work.

A company is reckless with borrowing and spending, and instead of being punished for risky behavior, it is rewarded with taxpayer money. Other companies take note, particularly ones that are "too big to fail", and they, too, take stupid risks, with the ultimate fallback position that - if worst comes to worst - the government will bail them out if they pay off enough lobbyists to complain that if Chrysler got a bailout, why can't they?. Well, we bailed out Chrysler and, having established that precedent, here we are bailing out Chrysler (again!) - and GM, too.

We also bailed out a bunch of banks. Tell me, Lust4xxxLife, how much TARP money will the government get back? 30%? 50%? And it was a LOT more than the GM bailout.

Why is it that you are crowing about the alleged GM success, but not discussing the even greater money lost on the banks and Chrysler?

And why don't you talk about the losses taken by the bondholders when you talk about the money allegedly made on GM? The bondholders are taxpayers, too. They were supposed to be first in line to get paid if a bankruptcy occurred. Instead, the federal government stepped in and bailed out GM, but stiffed the bondholders. I still do not know how they got away with that legally, but I have read that some of the bondholders were also financial institutions that were also trying to get TARP money. They took a back seat in the GM deal in order to get TARP money. So, if a bank lost $5 billion on GM, but got $10 billion in TARP money as payback, do your count the TARP money the taxpayers lost as part of the GM bailout? Or does that cloud up your Obama fantasy?

And please cite your sources about how taxpayers are going to make a profit in a year. The first problem is that you are counting money that has not even been received yet.

The second problem is that i have read reports like this before and it was always a trick of selective accounting. Like GM would pay off $5 billion that it borrowed from the US ahead of schedule, but they did so by taking a line of credit with private banks that was backed by the federal government. GM hadn't really paid down any debt - they had just switched creditors and the federal government was still on the hook if GM sales did not keep up and they defaulted again.

So, please cite some articles about how the bailout has supposedly worked out and let us read the counter-points.

[Lust4xxxLife]

Wow, thanks for the responses. I like the different perspectives and I respect everyone's opinion, no matter how much I might disagree. No matter what I post, please don't misinterpret disagreement as disrespect. Let's engage and keep it on an intellectual level. For the record, please know that I am NOT a Democrat, NOT an Obama fan, and NOT a Republican. I used to be a Republican in the old days, but the party I knew has been corrupted by the special interests of Jesus, war, oil, banks, and guns. The only reason I could ever support a Democrat agenda would be because it is the lesser of two evils, and the agendas proposed by some of the latest GOP candidates make that a possibility.

I'll respond to specific points elsewhere.

L4L.