According to the story, Faust sold his soul to the devil in exchange for unlimited knowledge and pleasure. Sounds like GM did something similar (selling its soul to the devil, that is). Now the devil won't let go.


General Motors pushing U.S. to sell stake

http://www.marketwatch.com/story/gen...ort-2012-09-17

 

Not sure what you're getting at here. Do you mean GM would be better off if they had gone out of business, which was the most likely alternative? There certainly wasn't any private capital lining up to save GM, and there were various prominent businessmen promoting the idea that they should just go ahead and die...

If you mean that it's inappropriate for the government to sell their stake for a multibillion dollar loss, well, I'm not seeing the logic there either. If the government wants to give billions of tax dollars away, there must be more needy and deserving recipients somewhere...

 

Why should the treasury take a loss on our money? I think they should hold on to it as long as it takes to at least break even.

 

I wasn't intending any interpretations this complex. I was just amused at the notion that what has happened to GM is a classic tale. In this case, in accepting the government's money to save itself, GM gave up any control over its destiny.

In my opinion, yes, GM should have been allowed to die. That's the way our free enterprise system works. How many auto manufacturers have come and gone over the 100+ year history of the automobile? It's several thousand at least. What was the purpose in saving this particular one (or Chrysler as well)? All that was accomplished was to perpetuate inefficiencies.

Just because GM would have gone out of business doesn't mean that the demand for the cars it produced would have disappeared. Other companies, such as Ford or Toyota, might have moved in and picked up the pieces, or perhaps one or more new companies would have been formed. Yes, automotive jobs would have been lost, but they've been lost, anyway. The ones that remained, though, would have been sustainable. In short, all kinds of interesting things might have happened, all of them healthier for our economy in the long run than what was actually done.

So, yes, I think it's poetic justice that GM is now shackled by the very entity that was supposed to have saved it. What's the other old saying? Be careful what you wish for. You might get it.

 

Good God, if you start worrying about instances where the government loses our money, you will never find the end. And whose to say the investment in GM will ever break even? There are those who think that GM will yet fail or will need another bailout. There was a lengthy thread on this site on this subject very recently.

https://classicoldsmobile.com/forums...tcy-again.html

I'm not advocating, though, that the government take the loss. My point was as I explained above.

But after Solyndra and a few hundred other examples I can't think of right now, I'm not expecting the government to make money on GM or any other industry or company that it tries to predict as a winner. That's not what government is supposed to do.

 

I don't think the purpose was to make money or to predict winners and losers. The purpose was to prevent the US auto industry from collapsing, taking all the ancillary jobs with it and massively contributing to a swiftly spiraling economy.

I'm pretty sure that's a good example of what government is supposed to do.

 

The purpose was to prop up a failed business. It's a business that may very well still fail. GM is by no means out of the woods.

There's very good reasons to believe that none of this would have happened. As I said, it's very likely that other companies would have moved in, probably quickly, to pick up those pieces of GM and Chrysler that were worth saving. If there's no demand for a product, then all the propping up in the world, whether done by government or anyone else, isn't going to help. Instead, it just holds off the inevitable, making us all worse off in the long run.

Not at all. No government should be anywhere near a private business, let alone running it. That's what the Soviet Union tried for 70 years to do, and we all saw how that turned out.

 

You seem to be misunderstanding my point: a government's first responsibility is to the well-being of the citizenry.

The auto bailout, unlike the financial industry bailout, was structured quite deliberately to prevent a massive loss of jobs and the attendant hit to the economy, while not consisting of little more than a huge pile of cash to be thrown at perpetrators of the most enormous financial fraud in all of history.

Given that the auto industry had no private investment willing to facilitate their survival, the alternative was, very simply, a huge economic blow that the country could ill afford, particularly in the midst of the economic meltdown.

Wikipedia has more data, but there is one single sentence that is crucial:

Should we have just ceded that to China, as you seem to be advocating? I know that out-sourcing jobs is a favorite tactic of corporations, but it seems a bit extreme for private citizens who actually want to work in this country to be cheerleading such a move...

 

I'm sorry, but your opinion is mired in ignorance.

 

when you make a deal with the devil it is not likely going to have a good outcome. i would love to get involved more in this discussion but i see this going down hill fast.

 

However bad the economy is now, it would have been worse had GM been allowed to go under, and all its employees, and those of its suppliers, put on the unemployment line.

There are many Americans, including plenty on this board, who say, "I will go out of my way to buy American, even if it costs a bit more."
Well, I am happy to throw some of my tax dollars at GM to keep those jobs in America, rather than save some money and buy cars with a label that says "且又在中国" ("Proudly made in China"). I'd also rather see them in the hands of GM and its workers than in the pocket of some corrupt Iraqi or Afghani politician/general/opium kingpin.

- Eric

 

The tone of remarks in this thread demonstrates this latest ruse has been successful at accomplishing what really is behind the federal government infusion of tax dollars to GM: attempting to secure a desired voting result among the working and retired rank and file of this largely unionized work force, and the work forces of it's dependent suppliers. This is not even nearly the first time in recent history this game has run, and all indicators are this latest attempt will prove as unsuccessful as the last, and I must point out at the risk of crossing the 'political discussions' line, on the heels of a failed Democrat administration of at least two branches of federal government. This isn't a criticism of one way of thinking or party or support of another, it's a matter of paying attention to history some of you are either too young to remember or have forgotten:

http://uspolitics.about.com/od/econo...lerBailout.htm

http://www.wsws.org/articles/2008/se...chry-s26.shtml

http://www.npr.org/templates/story/s...oryId=96922222

In these three examples of many available, even NPR examines the issue with a critical tone. My opinion is the main difference between what happened with Chrysler then and GM now is this time there has been made no attempt to run a game to maintain some degree of decorum in openly attempting to try to buy a voting block: This time with GM the infused money has offset staggering legacy costs carried by the UAW and GM in that order, to allow day to day business to continue to presumably some point after 2012. The UAW retirees (whose vote is desired in this election cycle) will get a screwing ultimately, just as the LTV steel employees did once the their crippling legacy costs were tossed on to the back of social security.

I'm sure with the value of 20-20 hindsight this is what is in play now. Prop up the business(s) with duct tape and paper clips and string, get in to 2013 with (presumably) new law on the books, then old heavy American industry sheds resource sapping legacy costs once and for all, of course on the backs of those remaining Americans actually paying income based taxes. It's another chapter in what will prove in hindsight to be the biggest and perhaps final economy grab in US history. I sure hope something outside of a national emergency of some sort and unforseen rights the compass before events transpire beyond what can practically be undone.

The only large scale federal gonvernment bailout having any degree of success in hindsight seems to have been Conrail, but it was painful to endure. The federal government of either party was ready to nationalize the rail system on Conrails expected failure, but the nature of railroading in America was underestimated, as a business and way of life for men and families. The good people bootstrapped Conrail to viability especially after the Staggers act, with the following wildy successful IPO stock offering returning Conrail to private (stockholder) ownership and operation. No such bootstrapping is in store for the auto industry, although the stock offering following the 1979 Chrysler bailout was initially successful, it benefitted few, mainly Lee Iacocca. I'd like to point out at the time of the breakup of Conrail the man at the very top hired on as a brakeman, overseeing this successful turnaround of a business previously run in to the ground by Harvard business school graduates, one of which (who I admire) despite best efforts could not stop the bleeding (Alfred Perlman). Pay close attention to his closing remarks at the end of this short film, these made during the 1958 recession under a Republican president:


Securing voting blocks are how the outcome of national elections are won towards a desired result in this country, and it does not always involve throwing taxpayer cash at the task. Joe Kennedy, Sam Giancana, John Kennedy and Bobby Kennedy, that ring a bell with anyone? Follow the money. CW

 

I don't have the time to read his links now, but I think few would argue that the bottom line motivation of any politician (including Democratic greats FDR and JFK, and Republican greats Abe Lincoln and Ronald Reagan) is to secure votes, and to do it in big chunks whenever possible.

- Eric

 

Unless economic habits have changed, which I'm not sure if they have, then the bailout is nothing more than a bandaid for a sucking chest wound. The wounded may survive a few more hours on life support, but in the end, will die on the vine. Unprofitable companies fail all the time. If GM is unprofitable, it's not OUR job as a government to make them so.

GM has apparently paid back its actual money part of the "loan", but then, they still have that 500 million shares the government owns on its back.

IF...big IF....GM can use this opportunity to figure out how not to be stupid with the money they do have again, they may survive.

But Pontiac, Oldsmobile, Saturn, et al, are dead. GM is alive (for now). How many limbs are you willing to lose to stay alive? Kinda reminds me of the movie Saw.

Remember when Chrysler, Anheuser Busch, Miller, and Standard Oil were American companies? Remember when TWA, Braniff, and Pan Am were flying the skies? I can remember when American Motors was still around, too. And yet, somehow we're all still here in the universe.

Had GM went down the tubes in a natural way, sure it would hurt, but business, in a true capatalistic way and just as in nature, somehow finds a way (Jurassic Park reference). Sometimes you can't sugar-coat a bitter pill because simply treating the symptom never cures the disease.

Drastic? Sure. And I'm even a GM retiree's son. But NOBODY should expect a bailout because they can't compete. How about MY bailout?

 

And you, of course, are the expert.