Silverado "top truck"

Perrysburg Dodgeboy wrote:
Michael what you are failing to understand is * GM and Chrysler were fine *and would not have needed a "bailout" had the banks not told them "no we are not extending your lines of credit any longer, just to risky". The same backs the Bush gave trillions to and only got penny's on the dollar in some cases.

Why should the Government sell off their share at a loss? They will continue to receive interest on the loans and when the time comes that GM's stock hits $72 a share they will sell it. If they sell it sooner then that's not GM's fault is it?

I bought a ton of Ford stock between $1.12 and $1.80 and had to sit on it for years until it hit $13 dollars a share. It got to the point that I thought about lowering the sell point but figured I'm not retiring anytime soon so I left it there and made same nice change. Ended up losing most of the gain in 09 but that's the market.

* EDIT Both were as fine as any other company at that time. It was a good thing for Chrysler that GM's lines of credit came do at the same time! I bet if it was just Chrysler going to the Government they would have been turned away and Chrysler would have gone out of business.

Don

No, I get it. The government is intruding upon private business and telling them how to operate. Banks started having trouble after the mortgage crisis. Banks got into trouble because gov't forced them to lower their standards for who is approved for a mortgage. The gov't decided it was racially prejudicial to demand good credit and a 20% down payment. Banks had to provide loans to sub-prime lenders. Banks realized they were getting hosed due to a variety of reasons and started packaging good loans with bad loans and selling them off to investment firms and hoping the investment firms wouldn't realize they were buying a dirty diaper til it was too late. Surprisingly, the gov't that so desires to intrude upon EVERYTHING didn't do anything about the sneaky and questionable practice of mixing those types of loan deals.

Sneaky loan originators and greedy investors speculated and gambled on these subprime loans that were forced upon the lenders by government regulations. When the market started to slow and these loans stopped getting paid, the economy took a nose dive. Banks became hesitant to loan money out to anyone. If GM wasn't so poorly managed and burdened by legacy costs, they wouldn't have needed to restructure at all. Somehow all of you are glossing over the fact that GM was NOT sustainable at this point in time, or else they wouldn't have needed loans. Because of this, they were wallowed in debt and people weren't spending as freely because they used their houses as credit cards (home equity line of credit... another widespread misuse of loans perpetrated by the Fair Housing Act, probably unintentional... but another example of making things worse) and didn't have money to purchase anything, let alone an expensive vehicle.

Make all the excuses in the world that you want. Bottom line is simple. GM was financially insolvent in 2009 because of poor or weak management decisions in the past (legacy costs) and inability to properly plan for the future (slow down in sales). If GM was financially secure at the time the market went under, we wouldn't be having this discussion. Regardless of all that, I STILL do not believe that the government should be involved in providing money to private industry.

If I ran Mikes Pizza Joint and paid my employees 50% more than my competition and promised lucrative retirement plans and eventually couldn't sell a pizza for what it cost to make it (including all my overhead costs), should I expect Uncle Sam to give me money? That is ludicrous in my mind. From a freemarket capitalist based system (I understand that the US economy isn't truly a capitalist system), that doesn't hold water.

We are creating an environment whereby the best and brightest aren't given the incentive to be the best and work the hardest. We are creating a society whereby we reward the failures and further condemn the successes. This is an environment that we tax the top earners 40% of their earnings, and 46% of our adults don't pay taxes.

What message are we sending our kids and grandkids? If you give 100%, work hard, take care of yourself, plan for the future and produce in this country we are going to tax the heck out of you. If you fail, if you are lazy, if you don't want to work, if you do a poor job working, if you don't plan ahead and aren't a productive member of society we will take care of you.

GM wasn't doing well before the economic crisis, which magnified its problems when the bottom dropped out. I think I understand your arguments and I took those arguments into consideration when I made up my mind about what I believed was right and wrong. I disagree with your conclusion that GM going out of business would result in a total loss of that market share and that the majority of the laid off employees would not have been able to get a job with the "competition".

We can go back and forth as much as everyone would like to debate. I have considered all the possible angles and arguments for and against. Again, we are all making theoritical assumptions about what WOULD have happened. There is no way for either side to PROVE that they are right. Perhaps I wouldn't be so insistent about being against it if I wasn't so worried about the consequences. We are burdening my generation and generations to come with increasing debt, we are setting precedent that private businesses can become "too big to fail" and will likely receive government aid and we are getting away from what made this country great to begin with... the American spirit and the desire to make the world a better place. We are headed towards the point where it is easier to sit back and collect from the gov't rather than step forward and work for a brighter tomorrow. A lot of people on this particular forum have the luxury of not being around when its time to pay for this "free lunch", and perhaps that is why some are so supportive of it. For my wife, my daughter and me, I don't know if we are blessed with that particular luxury.