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What are the good arguments for not bailing out the auto companies?

An argument that may be able to change a few people's minds.



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SteveMT's picture

From the Federal Reserve Perspective, that is Easy...

We help our buddies, and auto companies are not banks. We are not buying any TARPs ( toxic assets) even though that is what the Bailout Bill was all about, so America thought. That is a simple enough explanation. In addition, why bailout companies that have had their own agenda times decades, and their overhead is horrible. Since the Fed now controls the purse strings, why not let these companies go bankrupt, and if the Fed is feeling generous, buy them for pennies on the dollar with every possible concession on the table.

"Power corrupts, and absolute power corrupts absolutely!" Lord Acton

The same argument for not bailing out the buggy makers

and horse whip makers.

They killed the EV1 / electric cars ~ sold the battery technology to Texaco who then burried it. And they now hold a government forced monopoly on individual transportation.

It would be better to give $ to a company like Telsa motors and give them the mission of bringing Affordable transportation to America..

The Car companies no longer have that as a goal. But to get you in a payment plan on a super overpriced piece of crap that will not be worth a dime by the time you pay for it. Forget that it runs on a extremely inefficient internal combustion engine (by design) to burn lots of gas for their 51% owners the oil companies..

Yes, GM is 51% owned by oil companies who had the biggest profit ever in History this year. Why don't they bail out the car companies..

Throwing money at them will NOT solve the problem. It is good money after bad. Let them fail and let the market open up here in America for the many small car (local) car manufacturers who will take their place with hybred velocars and other inovative transportation machines that are inexpensive and don't use gasoline ( very little energy).

We will never become energy independent as long as we keep feeding the wolves. Let them starve.

You are not going to get people buying cars by the bailout. Cars just cost too damn much and people are waking up to the stupidity of it all.

They have been raping America for the last 20+ years and now we are to bail them out because they ran out of KY jelly and are getting rub raw from screwing us..

They make a inferior, overpriced product, that is solely responsible for the billions of dollars that exit this country every year to our enemies and the main reason behind the last 3 wars. They had the answer, are full of shit trying to look like they are pursuing the answer now with their electric car. They can do a lot better than 40 miles and a lot cheaper than 40-60K.

They just want to get you in debt slavery instead of the mandate of their founders. To bring high quality affordable transportation to Americans. Now they just wan't to get you into a ever increasing debt payment for a overpriced, polluting, piece of crap.

To hell with them...

One Voice, One Vision, One Love ~ Liberty.
Good Thoughts, Good Words , Good Deeds.
That is the Ron Paul rEVOLution Creed.

One Louv. ;-)..

Ummm

How about shrieking "WE DON'T HAVE ANY MONEY YOU MORON!!!!! That's how I handle those discussions.

Good answer

Acala

Republicae's picture

IT WON'T

IT WON'T WORK!

http://www.1776solution.blogspot.com

I would remind you that extremism in the defense of liberty is no vice! And let me remind you also that moderation in the pursuit of justice is no virtue. Barry Goldwater

http://militantjeffersonian.com

"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

The argument is essentially the same for not bailing out any

company. What they are seeking to do is to give money to be managed by people who mismanaged the company into such a position in the first place. If the company's assets have been mismanaged then they should seek bankruptcy so that the assets can be purchased by other investors who will risk their own investment capital and attempt to make those assets and operations profitable again. That's the way that it's supposed to work.

The people attempting to make an argument for forcing taxpayers (via debt instuments) to fund GM, or Ford or some other company, will insist that they are "too big to fail", which is preposterous. There's no such thing as "too big to fail". Their "reasoning", if it may be called that, insists that there will be other job losses that will result from the failure of a company like GM. So what. That happens when other companies fail and have to seek the protection of bankruptcy. Other suppliers or vendors lose a certain amount of business and it can have an adverse effect on their ability to hire more employees or to keep the employees that they already have. Nobody has a guarantee to a job, at least not in the commercial marketplace. It is perhaps very unfortunate that GM or Ford was managed in such a way as to bring them to this point. (Yes, there are a lot of laws that work to prevent GM and Ford from contracting operations in ways that are needed and that certainly should be changed.) However, that is hardly anything approaching justification for using the power of the state in order to take money from taxpayers and hand it over to one or more failed or failing corporate institutions. Where is the end of such "logic"?

When the government, financed by taxpayers, finally acquires legal ownership of a majority interest in all important banking and manufacturing institutions? Is that the end? Who will be running those institutions then? Will decisions be made on the basis of profit and loss? Risk :vs: reward or on political grounds? We would be forced to pay for (reward) bad management. What happens when you pay for a certain type of behavior? You get more of it.

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"An economy built on fiat money is a society on its way to ashes."

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"An economy built on fiat money is a society on its way to ashes."

60 Years of holding out on high-mileage engines

And---It's not the government's role.

Save Jobs?

The argument FOR bailing out the automobile companies is that we can't afford to lose these jobs. I contest that these jobs are already lost. You can pay people to make cars nobody wants/needs. What are they going to do with these inferior cars? Drive them into Lake Michigan? You can also pay them to dig ditches, pick up garbage on the highway, or bang their heads against the wall. Those would all serve the same purpose. The only exception is some of the car co. assets have value and by bailing them out they will remain in incompetent hands. If they're allowed to fail they will be sold to more efficient entities and used productively. An economy is not based on jobs, it's based on productivity. Otherwise we could all be paid to clean our own streets and become prosperous.

Well said! I was about to

Well said! I was about to post the same thing ... these car companies need to fail for prosperity sake.

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"Live free or die: Death is not the worst of evils." -- General John Stark.

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"Live free or die: Death is not the worst of evils." -- General John Stark.

I picked up a book

while I was in Minnesota i believe. It is called Stranglehold. How union bosses have hijacked our government,By Reed Larson

agree with tomforron

Through bankruptcy, they can void labor contracts.

The Unions

are the power of this country, And its time to change that. Those companies cant be profitable with the unions running them. Question 1 to eliminate the income tax was defeated by the unions in Massachusetts. I understand they need a fair wage but they also need to make consessions. Alot of my family worked in Detroit and they retired at the ages of around 47. And they live a great life

We won't have government

We won't have government work camps if they keep bailing businesses out!

THE FEDERAL RESERVE - Americas OVERLORD

It does not take a majority to prevail ... but rather an irate, tireless minority, keen on setting brushfires of freedom in the minds of men.
— Samuel Adams

13 No servant can serve two masters; for either he shall hate the one, and love the other, or else he shall lean to the one, and despise the other. Ye cannot serve God and riches. - Luke 16

We need some

Just Say NO Bailout stuff. :)

The DP is proof that the grassroots support for Ron Paul and his peaceful message of individual liberty is large, real, and not going away!

How about the fact

they can't make a profit off of their core business--making cars.

Somewhere in hell, John Maynard Keynes is laughing maniacally and dancing a jig.

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"the only thing that keeps the banking system from failing is general ignorance about how the banking system works."
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