And so it begins-GM CEO resigns

[chargerboy69]

I was listening to NPR today (I was bored).

I don't think I have ever been that bored. 

As a side note that Jon Rich song is not to bad.

[General_01]

So would you leave your daughter alienated and homeless...

Damn straight, it's called tough love.  Spare the rod, spoil the child, and all of that other stuff.  This is the game of life; the sky's the limit for success but there's absolutely no room for failure.  If someone doesn't cut it, wether it's a bankrupt car company or a wayward daughter who's now working the pole, those failing people need to get their acts together and help themselves.  The idea of the government stepping in and bailing ANYONE out is contrary to what this country was founded on, which is individual liberty and freedom; the freedom to succeed OR fail. 

Now.  Where is my bailout check to help with the restoration of my Charger?  Oh wait, I need to grab a set of tools or scrounge up the money to have it done?  Right, after all, nothing is or ever should be for FREE.  Doesn't anyone know how to work for anything more?  Or do we continue to whine and cry because we now live in an "entitlement" society where everyone in it firmly believes that the world owes them something for just being alive?  Or getting saved because life dealt them a hard one and they failed?  Life is hard-rock and roll with it or GTFO of the way...

Very easy to say. Very hard to do.

When my wife's brother divorced the first time, my in-laws let him move in with them. It was gonna be short term, maybe 4-6 months. It was going on 9 months and my wife and I kept telling them to give him a deadline. They finally did and he found a place to move to. That was the tough love part, but they didn't leave him. They still helped here and there financially until he was on solid ground.

According to your reading, they should have just let him fall into ruin. I doubt even you guys would let your children do that. Come back with your stories when your kid is living out of their car instead of in your spare bedroom.

[Arthu®]

I have to disagree with the idea that the bank system shouldn't be bailed out.  Of course we should never have had to pay for any of this, but the only way to avoid this problem was to never let it reach this point. 

I have family working Bank of America now and working in that industry for decades.  I hear about this stuff every week or two from that viewpoint.  The top brass at BOA don't even WANT to do what they're doing now, taking money from the govt and taking over other instutions.  Even aside from the nationalization threats, they're still stuck with huge far-reaching project that they'd rather avoid.  But they absolutely have to do this and they know it.

It strikes me sorta like a military secret - most of the public will never understand the true extent of the financial danger that we've really been in during the last several months.  These bailouts aren't just some big term-paper that congress has been putting off all semseter and now they're doing a shitty job writing it the night before it's due.  This is much worse than that.  This is more like a frantic gun-against-the-head effort to keep the USA as a functioning nation.  Bush/Obama/govt can't even let the public see them acting half as scared & hurried as they really are.  If the danger was widely understood it would destroy the confidence that they're struggling so hard to sustain.

How come that whenever I am lurking in any of these threads you are one of the few that seem to have an educated opinion... It's a good thing that the broad public doesn't know what kind of problems the economy and especially the financial sector is really in. How they still have no idea on how much money they have or how much they lost. It is a scary thing if a lot of your assets are almost impossible to value... I mean these bail outs are just the beginning, we won't see the end to this very soon. These car companies need to be bailed out in order to save the economy from an even bigger crisis. When we talk about the financial sector they need to be bailed out because if more large and large parties fall the entire system will collaps. In a small country such as the Netherlands the collaps of even 1 bank would be fatal for the entire system, causing an economic meltdown beyond imagination (look at Iceland to get an idea on the level of impact).

Arthur

[WingCharger]

What is the opinion of Fiat merging with Chrysler?

I was watching the news last night, and some dude said that it would be better for the US to let Chrysler fail. They are the 5th biggest automaker on earth, so they aren't worth anything.

[NHCharger]

The latest joke I just read. Congress (Barney and friends) is writing a law that will give the government complete control over all the salaries for any employee in a company that has taken bail out money from the government. This will also be retroactive back to the date the bail out money was given. Congress is saying that these employees salaries should be performance based. If that's the case congress shouldn't have been paid for the last 20 years.

[General_01]

The latest joke I just read. Congress (Barney and friends) is writing a law that will give the government complete control over all the salaries for any employee in a company that has taken bail out money from the government. This will also be retroactive back to the date the bail out money was given. Congress is saying that these employees salaries should be performance based. If that's the case congress shouldn't have been paid for the last 20 years.

Best example of the pot calling the kettle black.

[RD]

i think some have missed my point.  my point is to not continue to feed the spoiled child, DID I SAY THAT I WAS TO STOP LOVING THAT CHILD? OR BETTER YET, LET THEM FALL INTO RUIN?  There are more than one way to skin a cat you know.  The option of the bailout was just that, ONE option.  Is it the best option?  No, not IMO.  There were options to let certain companies fail, for which I think they should have.  Not everyone agrees with me, and I understand that.  But this system that the U.S. "banks" on is inherently self-balancing.  The issue, like i stated before, is that those in the position of money, power, and influence try to manipulate the system so as to protect their individual interests (or caste system based corporate interests) rather than that of patriotic intentions.  Business has always circumvented or usurped the concept of patriotism in the United States.  There is no patriotism in business unless it is government ran, and even then its culpable (remember the possible security contract to the Yemenese for the harbor/ports?).

My point is this, you lead a nationwide lifestyle representing "easy street" and "good will" without a hardened respect for patriotism, american idealism, and domestic independence, and it will lean towards a unregulated manipulation of people, resources, and funds so as to directly enhance the greed and power hungry stature of those trying to make a "quick" buck.

That was the point from my analogy.  If you dont start being a parent, the child will run away from you and will continue taking from you and everyone else. Tell me if this is not what you have seen with the recent economic situation.  If it is not, then you and I must be reading and seeing two different stories.  I am not saying each business is like this, but there are a larger number of individuals (that I have come across at least) who are more willing to screw you over than to help you.  And it has got worse since I have got older.

[bull]

What is the opinion of Fiat merging with Chrysler?

I was watching the news last night, and some dude said that it would be better for the US to let Chrysler fail. They are the 5th biggest automaker on earth, so they aren't worth anything.

As with anything there's both good and bad points to the deal: http://www.allpar.com/cars/adopted/fiat/fiat-cars.html

"In short, Chrysler will get small and mid-sized cars, small engines, lightweight transmissions, new fuel saving technologies, long-awaited distribution channels in Europe and Latin America, and an equity owner that can easily outvote Daimler-Benz - and has a vested interest in Chrysler's success, with no emotional need to destroy the company. What's more, Cerberus will still be pushing for Chrysler's success, since they own the loan company - which will thrive if Chrysler the car company does.

There are concerns. This will make Chrysler foreign-owned again, even if Cerberus buys back Daimler's 20%, because Fiat has an option to buy another 20%, pushing their share alone up to 55%. In addition, with more than half of Cerberus' equity going to Fiat, there is little left for the mandated payments to medical and pension funds."

As far as the other part of this discussion, I think the govt. should bail out the auto makers (and the UAW should accept major pay cuts for its members as should management) but it should have let the troubled financial institutions shrivel on the vine. We don't need a bunch of ethics-challenged lending institutions encouraging Americans to get in over their heads with shady lending practices like it's been done for the past 10-15 years. Americans need to get out of the debt used to buy stupid junk like TVs, fast food and iPods and the debt used for responsible home loans and (less responsible) car loans should go back to the way it was, ie., difficult to attain. You cannot and should not base an economy on debt, especially stupid debt charged to credit cards and home equity lines of credit. In fact, if they want to fix the problem for good they should just forgive all consumer debt tomorrow and start over the next day with hyper-strict requirements for loans and harsh penalties for defaulting on those loans.

By the way, I think it is an atrocity that this current administration is trying to dictate how GM and Chrysler is conducting business but that's what they get for accepting bailout money. Still, someone should tell Obama that communism failed a long time ago and just because he thought of it doesn't make it a good idea. If anyone had said six months ago that today our sitting president would basically be taking over GM and Chrysler we'd have said they were insane. Now look at us.

[chargerboy69]

Still, someone should tell Obama that communism failed a long time ago

Bull, I have to disagree with you my friend. Just look how well it is working in Cuba. 

[Mike DC]

How come that whenever I am lurking in any of these threads you are one of the few that seem to have an educated opinion... It's a good thing that the broad public doesn't know what kind of problems the economy and especially the financial sector is really in. How they still have no idea on how much money they have or how much they lost. It is a scary thing if a lot of your assets are almost impossible to value... I mean these bail outs are just the beginning, we won't see the end to this very soon. These car companies need to be bailed out in order to save the economy from an even bigger crisis. When we talk about the financial sector they need to be bailed out because if more large and large parties fall the entire system will collaps. In a small country such as the Netherlands the collaps of even 1 bank would be fatal for the entire system, causing an economic meltdown beyond imagination (look at Iceland to get an idea on the level of impact).

Thanks Arthur.   


---------------------------------------------------

i think some have missed my point.  my point is to not continue to feed the spoiled child, DID I SAY THAT I WAS TO STOP LOVING THAT CHILD? OR BETTER YET, LET THEM FALL INTO RUIN?  There are more than one way to skin a cat you know.  The option of the bailout was just that, ONE option.  Is it the best option?  No, not IMO.  There were options to let certain companies fail, for which I think they should have.  Not everyone agrees with me, and I understand that.  But this system that the U.S. "banks" on is inherently self-balancing.  The issue, like i stated before, is that those in the position of money, power, and influence try to manipulate the system so as to protect their individual interests (or caste system based corporate interests) rather than that of patriotic intentions.  Business has always circumvented or usurped the concept of patriotism in the United States.  There is no patriotism in business unless it is government ran, and even then its culpable (remember the possible security contract to the Yemenese for the harbor/ports?).

I actually agree with you more than my other post might sound like.  I agree that the guilty parties right now aren't facing adequate consequences for their actions to deter future misbehavior. 

But at the same time, the problem is the SIZE of these failures.  Letting all these banks/financial institutions fail at once  . . .  we're literally talking about turning off the electricity or something.  The problems caused indirectly would be THAT big.  At some point the govt has to decide that the net-total damage potential outweighs the need to teach the failing corps a lesson.

The problem is that the money was too concentrated into too few hands, which were all too little-regulated. 




Look at it this way - We could just let electric companies operate without restrictions, and let some of them fail when they screw up.  But that only works for the benefit of everyone IF our entire power grid was spread out among dozens of individual companies throughout the country.  Competition, etc.  It would work if people had the option of choosing between multiple different companies supplying for the same area, for example. 

But when the entire electrical supply of the nation has been concentrated into just a few HUGE hands, and a "failure" of any major player would crash an entire region . . . now this is a problem.  There are only two answers to this that don't involve a huge free taxpayer bailout, and neither one can be applied once the critical situation has already been created:

1.  Use antitrust laws to prevent/break up the electricity industry from being "consolidated" into so few companies in the first place.

2.  Severely regulate/nationalize the few huge companies when they get that large.  It's just a matter of protecting taxpayers' interests, since they taxpayers are essentially on the hook for a huge failure whether they've bought stock in the companies or not.     


The bailout is the only thing they could do.  And they have to do it FAST.  So fast that a lot of unworthy people will get out of it rich, and a lot of innocent people will get burned.  But unfortunately that's gonna happen pretty much any time there's a huge & disorganized shift in any industry.  The best we can do is demand that the govt will get off its ass and correctly regulate (or break up) the companies once the smoke clears.

[Red Ram]

Not like this hasn't happened in our "recent" past...there was a lot of government intervention to get us out of the Great Depression.

Note: I think this discussion is great...difference in opinion and discussion is what this country is all about...I'm glad this can happen without anyone getting bent out of shape or taking it personal! I think this one of the few threads of this type I've seen go this long without people going nuts!

Brad

[RD]

the era of the 30's (and early 40's for that matter), had promoted a huge government intervention to spur the economy in a direction that put people to work.  There are a huge number of jobs that have been lost, but at the same time there are a huge number of jobs that are still available.  For everyone negative, there is a positive.  Where one method closes, another opens.  My area of employment is a great example of that.  I am a autoparts store manager and our business is breaking records.  Due to the economy, people are choosing to fix their own vehicles rather than send them to shops to be repaired.  (I saved a couple $1000.00 on leaf springs just today by having providing a part for them that will enable them to be DIY'ers). But that is my short lived tangent there.

~~~~~~~~~~~~

Mike, I do agree that a infusion of funds or support (of some kind) was needed to insure the stability of our economic foundation, but the rush and lack of oversight for the expedient expenditure of funds into this bailout was way off mark in my opinion.  You live by the sword, you die by the sword.  The large banks failed due to their inability to manage themselves.  They should not be "rewarded" for their bad business habits.  Take that $800 billion that the government used to bail these ill-managed companies and put them into successful ones, not unsuccessful ones.  I mean, what about all those banks out there that are still strong?  Give them the money so they can give more money to lend.... or better yet, give it to the people!  Somewhat fanciful, but seriously the math shows it.  $800 billion to each 18 y/o taxpayer would net roughly $256,000 per person.  Guess what, they could have paid off their mortgage (housing crisis averted), used the money to buy a home (if they didnt have one, again housing crisis averted), paid off their car or bought a new one (the big three gets revenue), or put it in a bank to collect interest (look the banks have money to lend!!).  Now.. isnt that a better option?   

*edit* that was a joke btw.

[Arthu®]

Mike, I do agree that a infusion of funds or support (of some kind) was needed to insure the stability of our economic foundation, but the rush and lack of oversight for the expedient expenditure of funds into this bailout was way off mark in my opinion.  You live by the sword, you die by the sword.  The large banks failed due to their inability to manage themselves.  They should not be "rewarded" for their bad business habits.  Take that $800 billion that the government used to bail these ill-managed companies and put them into successful ones, not unsuccessful ones.  I mean, what about all those banks out there that are still strong? 

Would those 'strong' banks still be 'strong' if those who failed would fall? Really these banks have so much equity at each others banks that the downfall of one can be a real financial burden for the other, possibly even so much that it gets into trouble itself. These banks need to lend each other money, it's important, it's part of our entire system. Right now the trust between banks is at an absolute zero, this really doesn't help the situation. The way government is helping by bailing these banks out is that the banks get a small guarantee that it is safe to have their money at the other bank. This also goes for the consumers, they can also be sure that they don't loose the money if the bank is bailed out, otherwise you would get a classic run on the bank. Which would be desastrous. What MikeD said is that they needed to do this fast and effective. Giving them a bailout and having them blowup anyways because it was not sufficient would be an even larger waste of money. Anyways nobody can say for certain what is going on at the moment, nobody knows what kind of situation we are in here, it's so much more complex than the great depression in the 30's. Eventually there will be an era of growth again and if this won't last too long I am pretty certain the US will come back as the strongest player again, be it in a different form.

Arthur

[Mike DC]

Mike, I do agree that a infusion of funds or support (of some kind) was needed to insure the stability of our economic foundation, but the rush and lack of oversight for the expedient expenditure of funds into this bailout was way off mark in my opinion.  You live by the sword, you die by the sword.  The large banks failed due to their inability to manage themselves.  They should not be "rewarded" for their bad business habits.  Take that $800 billion that the government used to bail these ill-managed companies and put them into successful ones, not unsuccessful ones.

I agree that it was handled pretty badly as far as the specifics of the handouts.  Probably almost every taxpayer in the nation does right now.  I just don't think they had the time. 

The average taxpayer could have waited around for 2-3 months demanding that the bailout be planned & executed fairly, but the problem for the banks was much too severe & too immediate.   They needed serious cash NOW.  If the public had widely understood the situation, they would probably have consented to let the govt do just a quick & dirty handout first.  The purpose being to hold the system afloat long enough for a truly well-planned handout to be drafted up . . .

. . . and that's where we are right now.  The small "quick & dirty" handout is the huge $800 billion wad of cash that we're complaining about.  The govt can't refuse to hand out money, and they don't have time to hash out ways to hand it out fairly.  (And they can't even threaten to take it back later, or else it destroys the confidence in the system again.)




Q.  So what powers do the govt have left? What can be done to try to get the public SOMETHING in exchange for all this money they're losing? 

A.  The govt can start exerting some muscle on these industries and reign in their misconduct in the future.  It's the only way they can get the public anything else back later in exchange for these initial handouts.  Either the govt gives the banks $800 billion in exchange for nothing, or it gives away $800 billion in exchange for increased regulatory power in the future.

(And when the govt starts showing any signs of actually doing something with the increased regulatory power later one, certain talking heads in the media will start pointing & screaming, "AAAGGHH!! Nationalization! It's Socialism!"  The pundits will criticize, but they will have little or no better ideas.  None that would have worked and could have been practically hashed out in the short time the govt had to do it.) 


--------------------------------------------------

Take that $800 billion that the government used to bail these ill-managed companies and put them into successful ones, not unsuccessful ones.  I mean, what about all those banks out there that are still strong?  Give them the money so they can give more money to lend.... or better yet, give it to the people!  Somewhat fanciful, but seriously the math shows it.  $800 billion to each 18 y/o taxpayer would net roughly $256,000 per person.  Guess what, they could have paid off their mortgage (housing crisis averted), used the money to buy a home (if they didnt have one, again housing crisis averted), paid off their car or bought a new one (the big three gets revenue), or put it in a bank to collect interest (look the banks have money to lend!!).  Now.. isnt that a better option?     

Man, I wish! 

But I guess that'll have to wait for the next $800 billion, when no financial structure stands to immediately collapse without it. 

As crazy as it sounds, they did "need it" worse than the public a few months ago.  At least in the short term anyway.  Let the whole system crash and it would have hurt everyone.  The damage would not just have been landing hardest on those in debt, or over-mortgaged, or needed a loan, etc.   

What good is getting a personal handout of $250K, if the US dollar also gets inflated to 1/10th (or 1/100th) of its current value as the system crashes around it?


-------------------------------------------------------------------------


As for Detroit, they're getting screwed compared to the banks.  (If you can call any corporation being handed a free $40 billion dollars "screwed.") 

GM/Ford/Chrysler are being interrogated & taken over & squeezed in the balls for like, what, $10-20 billion each or something?  That's shite compared to the whole bailout.  Shite.  A lot more money than that will probably get "lost in the paperwork" during the banking bailouts. 


I think the mentality of the govt coming down so hard on Detroit is: "Maybe we can't catch all the murderers & rapists, but we'll still lock up teenage shoplifters when we see the chance."  It's much easier for the public to grasp what goes on at a car company.  It's hard to convey what's happening when you're preventing some bank from mismanaging $100 billion dollars that only even exists on paper.

   

[chargerboy69]

Not like this hasn't happened in our "recent" past...there was a lot of government intervention to get us out of the Great Depression.

Brad

You are right. And it did not work then either. A depression that should have lasted a year or two lasted for almost ten years thanks to government intervention. It took WWII to get us out of it.

[nh_mopar_fan]

Not like this hasn't happened in our "recent" past...there was a lot of government intervention to get us out of the Great Depression.

Brad

You are right. And it did not work then either. A depression that should have lasted a year or two lasted for almost ten years thanks to government intervention. It took WWII to get us out of it.

BINGO. It was the war that got us out of the depression.

Spending our way to prosperity (not) and sticking our kids with the bill is going to be a catastrophe.

Geez, even the EU socialists aren't willing to go this far.

[Mike DC]

 
We got out the depression in the short-term because of WWII.  We got out of it in the longer term because America fundamentally changed its lifestyle when it ended.  Suburbs, appliances, cars, etc.  We didn't just turn off all our factories after peace was declared.



IMHO spending won't get us out of this one, but neither will slashing taxes at the other extreme.  We need to make some more fundamental changes to our lifestyle again.

[Ghoste]

You mean like quit building everything in China just so we can enjoy falling prices at Wal-Mart and better stock performance on Wall Street?  Employ people here in good paying jobs so they can actually buy the products everyone is making?

[richard pettys 73]

why dont the govnt take that 800 billion and give it to the american citizens instead of using it to bail out failing companies??  then couldnt we all pay off our debts and free the banks up for more lending and people would then buy cars....just a suggestion

[Brock Samson]

 Well that's not how "it" works,.. First:
  you either lay off or cut the pay of the workers at the bottom,.. usually a bit of both...
then:
  cheapen the product or service, then pour millions - if not billions - in at the top for the great job the CE Os and executives did for saving a few thousands on their budgets...
I guess you didn't get the memo.. 

[Mopar2Ya]

You mean like quit building everything in China so we can enjoy falling prices at Wal-Mart and better stock performance on Wall Street?  Employ people here in good paying jobs so they can actually buy the products everyone is making?

I couldn't say it much better.

why dont the govnt take that 800 billion and give it to the american citizens instead of using it to bail out failing companies??  then couldnt we all pay off our debts and free the banks up for more lending and people would then buy cars....just a suggestion

I agree, but we may just spend the $ at Wal-Fart. See above. 
The gov wants to get involved, then quit letting these CEO's get paid millions, no one person deserves that $ especially now. IMO.

[RD]

You mean like quit building everything in China just so we can enjoy falling prices at Wal-Mart and better stock performance on Wall Street?  Employ people here in good paying jobs so they can actually buy the products everyone is making?

ur my hero!

http://www.youtube.com/watch?v=i-T1h7J0R-Q

[chargerboy69]

The gov wants to get involved, then quit letting these CEO's get paid millions, no one person deserves that $ especially now. IMO.

And maybe you do not deserve what you are making either. Why don't we bump your pay down to. . say $6.00 an hour. For the last 9 years I do service work inside our local GM truck plant. I pass by guys sleeping for a couple hours at a time. Others will sit in break rooms for hours playing cards. Should they get paid what they are making?  Yes they should, because they have a contract. Do I think some of them deserve what they make?  No I do not. But it is not up to me, and certainly not up to the government.

It is not governments job to dictate who makes what. At least that is not supposed to be it's job. That would be up to the company/board of directors to decide. Because if they do this to the people you do not like, what is to stop them from coming in and telling you, you are making to much.

[Troy]

The gov wants to get involved, then quit letting these CEO's get paid millions, no one person deserves that $ especially now. IMO.

And maybe you do not deserve what you are making either. Why don't we bump your pay down to. . say $6.00 an hour. For the last 9 years I do service work inside our local GM truck plant. I pass by guys sleeping for a couple hours at a time. Others will sit in break rooms for hours playing cards. Should they get paid what they are making?  Yes they should, because they have a contract. Do I think some of them deserve what they make?  No I do not. But it is not up to me, and certainly not up to the government.

It is not governments job to dictate who makes what. At least that is not supposed to be it's job. That would be up to the company/board of directors to decide. Because if they do this to the people you do not like, what is to stop them from coming in and telling you, you are making to much.

Exactly. I worked with a guy recently who believed that no one should be "allowed to be rich" (yet he drove a BMW 740 so not sure what he considered "rich"). He believed that any money a person made over a certain amount should be taxed at 100%. Give it to the government to redistribute it to others who need it (but certainly didn't earn it in my opinion). I've worked at plenty of places with quotas and you know what the majority of people do? Just enough work to maximize their income (and/or stay out of trouble). There's no desire to achieve any more because the reward has been taken away. There will be a massive exodus of qualified managers. If you think corruption is bad now, try capping salaries and watch for all the new ingenious ways to hide/rename money/income. Better yet, take a look at the "benefits" that our congressmen enjoy (that aren't part of their base salary).

Put this into comparison, would a high end restorer do the same quality of work if they were paid exactly the same as HLPAG (or the local Maaco)? Who would you trust your car to? Wouldn't you be willing to pay more for the highly skilled worker with impeccable attention to detail? Look at sports. Why should the coach get paid when he isn't actually doing any work? In an ideal situation, a person's compensation should be directly related to the amount of money they generate for the company. If a "good" manager can cut costs, increase output, and improve employee morale (which hopefully leads to more production and less theft) then why don't they deserve a reward? Why wouldn't all the employees who contributed deserve a reward? Team chemistry is a wonderful thing - especially if profit sharing is involved. In such an environment the slackers don't last long - and I'm fine with that.

Troy

[nh_mopar_fan]

Let's be honest here. "Rich" is the guy that makes more money than you.

We can rag on the guys taking the AIG bonuses, right or wrong. We can complain but the CEO who makes way more than what we think he should.

BUT, at the end of the day, if you were sitting in their position, you'd take the money as well.

So, what does that make someone you?

I'll give you a hint, a hypocrite.