Quote:
Originally Posted by potter
Ok. Now that we've cleared that up. Realize, that right now the American auto makers face a huge problem. A problem in which money cannot fix. Giving the auto makers more money - only supports them enough to not go bankrupt right now. They're still going to have the same problem after they receive the bailout. They'll just need another bailout in the coming months.
This is why congress is having such a hard time with this particular bailout. It won't solve the problem. It'll delay the problem for maybe a year at best.
...... Also. Congress did just bailout the credit system. With 700 billion dollars. So your point is kind of null and void. The government did take care of it's own, go read a newspaper.
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This isn't true.
Car makers weren't in trouble last year or the year before.
The fact that consumers aren't spending money because they're scared of a depression and the banks won't lend money to most of the consumers who do want to buy a car isn't Detroit's fault.
These are the Main Street consequences of the Wall Street melt down.
Does Detroit need to renegotiate with the union? Yes....they already did, spent half of the year doing it. The labor cost difference between Detroit cars and Foreign cars built in the South will be about $250 per car once the new contract takes effect.
They also need to build more fuel efficient cars....these take time to develop, but they're already in the pipeline. They need some help to get from here to there, and when the economy is in the situation it's in, you can't turn your back on 3 million good paying jobs.
I understand having a moral problem with bailing companies out. I personally have a big moral problem with it...the banking bailout, the whole mess.
But there's ideology and there's what's practical.
Morally speaking, letting Lehman Bros go under was the right thing to do....practically speaking, it was the dumbest fucking thing the Treasury has done in the last 79 years.
Maybe bankruptcy and restructuring are inevitable for Detroit....but this is the worst possible time for that to happen. If the economy were otherwise sound (circa 1995 or even 1985) then the right thing to do would be to leave them on their own....but today, in this economy, they should get some help from the government IMHO.
If they do eventually end up bankrupt, I'm sure Uncle Sam will be first in line at the bankruptcy court to be repaid before any other creditor.
