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Bail Outs For Auto Industry?


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It is being reported that their is a deal and it doesn't involve a BK.  It looks like the tax payers have been sold out by chicken sh!t a-holes from both parties.  Welcome to the command economy.

Dave

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I hate to say it but americans are fed up with the bailouts on every industry regardless if it is AIG or GM FORD etc... If you work for the big three get to work finding a job. Your done, if we bail them out the american people are going to abandon you and not buy your product, oh yeah and by the way the available credit is not available for people to buy your products that you make now. Keeping the big 3 open for business is not the only solution to fix the problem the funds are not there to buy cars. New green technology or re tooling my foot, that is not going to drive anyone to the showroom its a job with a pay check and a need for a car will drive them to a showroom that they have a positive opinion about and trust me there is not a person out there that has a positive opinion of the big three right now.
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. (me included) my old man a retired steel worker didn't have to worry about health care or a lot of other things

the employer is supposed to take care of you cradle to grave?

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"You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before."

In the spirit of Bill Engvall....Here's your crisis.

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. (me included) my old man a retired steel worker didn't have to worry about health care or a lot of other things

the employer is supposed to take care of you cradle to grave?

if that was part of the deal that the company made with the union was that after busting his ass in a steel mill for 35 years (and never took one unscheduled day off, ever) he got X benefits then I would expect them to honor the agreement! BYW the 'me included' part that you included was referring to me NOT being smart enoguh to get in a union.

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I hate to say it but americans are fed up with the bailouts on every industry regardless if it is AIG or GM FORD etc...  Your done, if we bail them out the american people are going to abandon you and not buy your product, oh yeah and by the way the available credit is not available for people to buy your products that you make now. Keeping the big 3 open for business is not the only solution to fix the problem the funds are not there to buy cars. New green technology or re tooling my foot, that is not going to drive anyone to the showroom its a job with a pay check and a need for a car will drive them to a showroom that they have a positive opinion about and trust me there is not a person out there that has a positive opinion of the big three right now.

New green technology or re tooling my foot, that is not going to drive anyone to the showroom its a job with a pay check and a need for a car will drive them to a showroom

Amen Brother, infact with gas prices falling I doubt many will be spending a premium to buy a hybrid or anything overly small sized (gas efficient).

The economy is way down, and folks are frozen with fear even if they have a job. That and credit is tight for a lot of folks.

I have no issues buying from the big two, (I dont like Fords). And I have no OTHER dealers in reasonable driving distance. So for me, why buy a Toyota and have to drive 100 Miles to service it? Besides I am happy with my Chrysler Minivan, and the GMC pickup. Why switch brands? Right now I just am not in the car market.

FWIW, the Big Three are calling this a loan. I suppose if they fail they wont pay the loan back, but if they do make it, supposedly the loans will be repaid. Didnt Chrysler get this kind of loan back in the 80's?

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STOCKHOLM, Sweden — Nobel economics prize winner Paul Krugman said Sunday that the beleaguered U.S. auto industry will likely disappear.

"It will do so because of the geographical forces that me and my colleagues have discussed," the Princeton University professor and New York Times columnist told reporters in Stockholm. "It is no longer sustained by the current economy."

Krugman won the 10 million kronor (US$1.4 million) Nobel Memorial Prize in economics for his work on international trade patterns. Some of his research on economic geography seeks to explain why production resources are concentrated in certain locations.

Speaking to reporters three days ahead of the Nobel Prize ceremony, Krugman said plans by U.S. lawmakers to bail out the Big Three automakers were a short-term solution, resulting from a "lack of willingness to accept the failure of a large industry in the midst of an economic crisis."

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Wall Street journal opinion piece that makes sense

 

By JARED POLIS

The din of clattering metal echoes through the halls of our capital: panhandlers! Erstwhile captains of the automobile industry, having foregone their Learjets, now don the tattered rags of beggars as they seek congressional approval for a $34 billion bailout of the Big Three automobile companies.

Our United States Congress of lawyers, doctors, diplomats, retired military officers and career politicians -- along with their staffs of intelligent young political science majors and MBAs -- now finds itself poring over "business plans" submitted this week by Ford, GM and Chrysler. People who have never before in their lives seen -- no less implemented -- a business plan are now trying to decide if these companies will succeed by means of a "capital infusion" with various imposed preconditions and negotiate what we taxpayers (investors) should be getting for our money. Something is wrong with this picture.

If we as a society place a public premium on "saving" the automobile industry from its default reorganization under Chapter 7 or Chapter 11 bankruptcy -- which has been good enough for the steel and airline industries, among others -- then a better manner in which to express that premium might be to establish special tax consideration for those who are willing to take on the risk. One way of doing that is to provide an exemption from capital-gains taxation on all debt or equity instruments used in the next six months to invest in the troubled auto makers.

By waiving the future capital-gains tax on all investments in the automobile industry, we enhance the projected return models and therefore the likely occurrence of a privately funded "bailout." There are turnaround firms and funds, and they are experts at what needs to be done. Tax exemption for gains would certainly get their attention. It also wouldn't cost taxpayers anything because it only forgoes future government revenues that wouldn't exist absent this incentive.

At the very least, my constituents in Colorado won't find themselves as limited partners in a private equity fund run by Congress making speculative investments in flagging automobile manufacturers and who knows what else with their taxpayer money. And Congress can focus on issues more directly related to its core competencies and the necessary role of government, such as how to make training accessible to workers who might be transitioning between industries.

At best, the tax incentive would lead to a far more efficient investment than anything Congress can negotiate. Such a tax incentive could save jobs, make our automobile industry more competitive and viable, and earn tax-free return on capital for the savvy investors who step up. If it works in this particular case to incentivize additional risk-taking through a capital-gains tax exemption, it may indeed work in other cases or, I dare say, across the entire U.S. economy.

Most members of Congress and staffers on the Hill are smart people, but we should not pretend that we are better at what are so clearly other people's jobs. One of the tremendously difficult tasks that we are ill-equipped to successfully orchestrate is restoring these three failing companies to health. As one of the members of Congress with a strong business background, I know what I don't know in business. While I hold my colleagues in great esteem, I doubt their abilities as turnaround artists are very much superior to mine. Any pretension of a government bailout being a good deal for taxpayers should be abandoned for the insincere (or perhaps ignorant) rhetoric that it is.

Among the reasons I ran for Congress, one was to make government work. Let's get government back to doing the work of government. Reading business plans and making investments is the job of equity funds and turnaround specialists, not members of Congress.

Mr. Polis, the founder of proflowers.com and bluemountain.com, was recently elected to Congress as a Democrat from Colorado.

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"Let's get government back to doing the work of government. Reading business plans and making investments is the job of equity funds and turnaround specialists, not members of Congress."

Good read. I can think of a number of other things the government has no business getting involved in that I would add to that list.

20081209thebailoutshittyz8.jpg

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Chris Raymond

One of the things about all of this I find so dishonest is that for years we've heard how we are a nation of spenders not savers.  Now that we've conditions in place that really accentuate the errors of our collective past, what does everybody want us to do...spend more!  For what?  To keep the present state of affairs in play and to help those less fiscally conservative who spent poorly.  As far as I'm concerned, let's take the hit now.  

Cut backs and reductions across all areas of our economy are needed in my opinion...and it's going to hurt.  Once we get our collective finances in order, we're going to have to prepare to weather the upcoming Medicaid/SS financial storm.  Ain't squat been said about those two monsters as of late...it's not like they've gone away.  

I feel this is going to get much worse before it gets better.

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Once we get our collective finances in order, we're going to have to prepare to weather the upcoming Medicaid/SS financial storm.  Ain't squat been said about those two monsters as of late...it's not like they've gone away.  

Let me get signed up in 2.5 yrs first. THEN change it.

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Chris Raymond
Let me get signed up in 2.5 yrs first. THEN change it.

RD--I know you're smart enough not to think that once you get signed up that prevents your package from changing any time into the future?  ;-)

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Unbelievable,

I cant believe the party I have voted for is betraying the people this way

I don't have a crystal ball either but I don't think people realize what is at stake. I firmly believe this will bring the country to its knees. I see a bankrupt federal Gov as the end result.

I see Sweeden cares about there domestic autos.

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