GM BAILOUT= $250,000 PER WORKER

Remember the GM bailout that turned General Motors into Government Motors?

That was your money that was used to keep the company in business and save 75,000 jobs.

I like to apply the helicopter theory when it comes to the government spending huge sums of money to improve the economy.

I ask myself if it might be better for the government to just throw the money out of a helicopter rather than go through all the bureaucratic red tape.

For example, I have a feeling that it would have been better for the economy of Glendale, Arizona if the city council had decided to throw $25 million out of a helicopter instead of throwing it at another year of Phoenix Coyotes hockey.

Megan McArdle, writing in The Atlantic, did some math on the GM bailout and those 75,000 jobs that were saved.

“The question is whether it was worth it to the taxpayer to burn $10-20 billion in order to give the company another shot at life. To put that in perspective, GM had about 75,000 hourly workers before the bankruptcy.  We could have given each of them a cool $250,000 and still come out well ahead compared to the ultimate cost of the bailout including the tax breaks–and over $100,000 a piece if we just wanted to break even against our losses on the common stock.”

Imagine $20 billion falling from the sky over Michigan. They’d have to keep all the malls open 24/7.

And think of all the Escalades that could have been sold.

  • Mason

    It seems that many of you have bought into the administrations hype about GM and Chrysler. Let’s overlook all the illegal activity that the government pulled to make this happen and focus on the bankruptcy.

    They convinced many of you that if GM or Chrysler went bankrupt, that their doors just would have closed – never to open again. The reality is that their just would have been different winners and losers. Investors would have bought things up for pennys on the dollar and would have continued making cars with a slimmed down operation.

    The end result would have been a much more stable GM and Chrysler in the long haul. The bankruptcy that took place, was done the way it was for one reason – the unions.

    • Matt

      GM going out of businesss may have been the best thing that could have happened to the auto industry. Smaller companies would by shop time in the old facilities. Imagine what a company like fisker or Tesla could do if they bought a modern gm assembly plant on the cheap.

      • Mason

        I agree Matt, happens everyday. One company goes under, others buy their assets at bargain basement prices and start doing business. On top of the young automakers that would have benefitted, someone would have bought the bulk of the GM operation and kept producing the same cars but without all the legacy costs and debt burden.

    • jferretti

      If I recall Chrysler proposed selling units and divisions AND THERE WERE NO BUYERS. Fiat was the only company that agreed to buy in. If not for them, Obama and the car czar made it perfectly clear Chrysler was done. There were no “white knights” waiting in the wings.

      • http://justwatchthegame.com JohnSteigerwald

        How about the fact that we now have something called a car czar? Was he approved by the senate?

        • Mason

          You are mixing up trying to sell something and “white knights” buying it via bankruptcy. Two completely different things. Do you really think investors wouldn’t have pounced on it for ten cents on the dollar and without the legacy costs of pensions. They would have shed some of the workforce, and kept producing the same cars with virtually the same distributors and same companies providing products to them. It would have slimmed down (like it needed to) without the albatross around their neck – in other words, they would have become viable companies.

          The current president saved the unions – period. At the same time, they literally stole a couple thousand businesses (dealerships) – the large majority of which were profitable and provided dozens of jobs, often in smaller towns that desparately need them. In case you were not aware, most dealerships will turn a profit selling very few, if any cars – service departments make dealerships a fortune, as well as (if run well) create goodwill with the local communities.

          • jferretti

            Dude, Chrysler was put up for sale to anyone or anything that was interested. No takers. When the government figured this out they coerced the Italians to buy a stake and if you recall, the Italians only wanted the dealership network. They wanted nothing having to do with factories, equipment or engineering. There would have been liquidations and nothing resembling an auto manufacturer would have been left. In the meantime, all of Chrysler’s and GM’s contracts with suppliers would have been trashed and many companies, like Delphi, would have perished. In Michigan alone unemployment would have been 20 to 30%. There was a Univ of Michigan report on this back in the day.

          • http://justwatchthegame.com JohnSteigerwald
          • saneman

            You should also watch Inside Job , an oscar winning documentary. It gives you a bipartisan takedown on what is wrong with Wall Street and DC.

          • Mason

            Again, you are missing the difference between ‘for sale’ and bankruptcy. Of course no one wanted to buy it – they would have been forced to deal with the UAW and the nightmare behind that, among other things. Getting the assets in bankruptcy is a completely different world. As I said before – it was done the way it was done, for one reason and that was to save the UAW! You are kidding youself if you think everything would have just died away.

            You talk about Chrysler and GM’s suppliers – but apparantly have no regard for the roughly 3,000 dealers that were literally just shutdown. And as I mentioned before, these were profitable dealerships. They actually stripped businesses from one dealer and gave it to another dealer. It was flat out criminal behavior and very few people have cried foul. I just don’t understand it.

          • Mason

            I just want to make clear that my resonse above was to jferretti not John

        • jferretti

          You are a smart guy, we need not get lost in semantics.

          • Parker39

            Where was the government when the US Steel industry collapsed in the late 70’s and early 80’s? Why no bailouts then? The truth is that our own politicians, Democrat AND Republican are selling us down the river to corporate america and foreign lobbyist….because they can! We need to get the money out of politics, established term limits for congress and start fixing the problems in America before we concern ourselves with the rest of the world.

            John Hoerr wrote and excellent book several years ago that details what really caused the demise of the steel industry, its called “And the wolf finally came” (hint: if it were just the unions getting too powerful which lead to the collapse they would have fixed it, but it was many many factors all occurring in a relatively short period of time)

            The problems with the US auto industry are somewhat similar.

          • http://justwatchthegame.com JohnSteigerwald

            I remember when the steelworkers were demanding 13 weeks of paid vacation per year.

          • Parker39

            You play right into it John, the “easy answer” beat the drum about how the unions got too powerful and destroyed the steel makers, How about the companies not investing anything into new technology? What about the Nixon administration permitting foreign companies to “dump” steel in American (selling below the cost to produce)? What about the EPA and OSHA putting rules on American companies that the foreign companies never had to deal with? What about the development and wide us of plastics? etc. etc. etc. But with all due respect John you choose to make the simple argument and blame the unions instead of educating your self as to the whole cause for the collapse of a huge industry.

            Beat the right wing drum all day if you want or educate yourself on the issues and make your self better able to make an intelligent argument, Its your choice my friend.

          • http://justwatchthegame.com JohnSteigerwald

            It’s obvious that it wasn’t only the unions but I’ll bet if you ask anybody who was in the Steel industry at that time they would tell you the number one issue was labor costs. I’m old enough to remember when kids got summer jobs working in steel mills. I didn’t know one who wasn’t stunned by the power that the union workers had over their bosses. My brother got a job working the midnight shift and on his first night the regular guys yelled at him for turning the lights on. They were sleeping. He slept right along with them most nights and he was getting a huge check. There were stories about having to wait hours for an electrician to come and plug or unplug a piece of equipment. I was in a union for 30 years and I have no problem with the concept but it’s stories like that and the things I experienced myself with the teamsters when I was working at Giant Eagle that explain why only 12% of US workers are in a union.

          • Parker39

            My last post was strictly in response to your previous post about the 13 weeks of vacation (this was only for workers who had 35-40 years seniority).

            I am a union member, (although I recently left the union and took a job with a company that is not unionized) and once again John I AGREE WITH YOU. The concept and principles of collective bargaining are good and noble but its the union bosses who have killed the union movement in America! Greed, nepotism, cronyism, grafting of union pension and other trust funds etc. etc. I could go on for days………

            Thats why I left and hope to never go back! The union members in this country are for the most part good, hard working and decent Americans who simply want to provide a decent standard of living for their families and educate their children. many of the local union leaders and most of the International union “bosses” have become exactly what unions were formed to oppose 100+ years ago, namely fat cats living a lavish lifestyle off of the sweat of the working men and women they are appointed, but not elected, to represent (The rank and file has no say so in the matter at the international level).

            The sooner the unions fold up so that we can begin the process of rebuilding them the way they were intended to be, the better it will be for the working class in this country.

            PS We won’t see it in our life time John.

          • Parker39

            By the way, I forgot to mention. The private sector in America is only 7% unionized the 12% is attained only by factoring in the public sector unions.

            Thanks union bosses for destroying what your father’s worked so hard to build!

          • http://justwatchthegame.com JohnSteigerwald

            For years I had to sit in an editing booth and watch a tape that was recording an important game run out because I wasn’t allowed to push the stop button and insert another tape. I had to wait for an IATSE union member to push do it. Think about that kind of sutpidity multiplied by thousands and thousands of union shops and you’ll know why unions are dead. I couldn’t move a chair three feet in the WTAE-TV studio without being in violation of the stagehands union. I actually had to page a stage hand to come and move a chair across the room.

          • Parker39

            99% of the union members would agree with u on the foolishness of these rules. Unions are dying and thats a damn shame for the working men and women of this country ( all of them, even the non union workers) again, thanks union bosses for pissing away what your father’s literally bled and died to build! These immoral criminals ought to be ashamed of themselves, but their arrogance won’t allow it.

          • http://justwatchthegame.com JohnSteigerwald

            Getting into bed with organized crime didn’t help.

          • Parker39

            The rank and file aren’t the ones who “got in bed” with the mob, once again it was the union bosses. The mob is also used by the bosses to silence through intimidation any member who dares to challenge their authority or who asks too many questions.

          • http://justwatchthegame.com JohnSteigerwald

            The fact remains that unions destroyed themselves. The rank and file allowed the bosses to get out of control.

          • Parker39

            I guess you could say that the rank and file allowed the bosses to get out of control, but change and taking the power off the bosses is next to impossible when they write the rule and stack the deck. Add on a good helping of intimidation not to mention the “reward your friends/ screw your enemies ” mentality that exists, especially in the trade unions and its easy to see why the bosses are almost untouchable.

            Its been my experience that the members eventually “vote” with their feet by walking away, and the best and brightest usually leave first. This is what is really adding to the rapid decline of trade unions, too many of their members are there only because they could never find a better gig. The more skilled and more intelligent members get tired of the BS and leave for greener pastures,

            Saying that the rank and file allow the bosses to get out of control is like saying that the American public allowed the US Congress to get out of control: its true but tell me realistically what in the hell we can do about it?

          • http://justwatchthegame.com JohnSteigerwald

            How about refusing to pay dues? Obama and the democrats would like to eliminate secret ballots in union elections. How’s that going to help?

          • Parker39

            The employee free choice act deals with elections for representation at open shop facilities and not with internal union elections..

            As far as refusing to pay dues, if you don’t pay dues in most cases you don’t work. Try explaining to your family that we’re losing the house and nobody can go to college because daddy disagrees with the union President.

            As I said previously, many of the best and brightest union members are leaving the union all together because of the crap that goes on but it must be an all or nothing decision, you can’t stay with the union but refuse to pay dues.

          • Gary M

            Yes, but you CAN opt out of the union and STILL pay dues.
            The union has no problem taking that money.

          • Parker39

            I’m living that exact scenario as we speak Gary M.

          • Parker39

            If you disagree with Obama and much of what else the feds are doing i.e. Health care, entitlements etc. try not paying your taxes for a few years and let me know how that works out for you. Maybe you can ask Wesley Snipes if you get a cell next to his.

          • http://justwatchthegame.com JohnSteigerwald

            The union doesn’t have the power to throw you in prison. The government does. Bad analogy. The rank and file should have used the same concept —union—that it used to get what it wanted from employers to get what it wanted from union bosses. They went along like sheep because they bought into the “boss is evil” mentality and were happy to get the benefits that put so many companies out of business. My friend’s father had a successful bakery that was put out of business by teamster truck drivers’ demands.

          • Marcellus Shale DIscount Sale

            was this back in the old days when the teamsters were in support of the vietnam war and were part of the “in” crowd, or after they started allowing in minorities and raising them to power, and were put in as part of the “out” crowd. it used to be the right loved unions and the left especially the anti-vietnam crowd, hated them.

            very hypocritical to attack unions for things they did, before they did the thing, that caused them to draw the ire of the people who passed that ire along to mainstream sheep.

          • http://justwatchthegame.com JohnSteigerwald

            It was when the unions becane corrupted by organized crime. beginning in the 20s and 30s. I don’t know what Viet Nam has to do with it.

          • Parker39

            The union bosses have the power to take your job and throw you in the river, thats worse than prison.

          • http://justwatchthegame.com JohnSteigerwald

            If they have that power they only have it with the consent of someone in government who’s willing to look the other way.

          • Parker39

            I”m living that exact scenario as we speak John S. As a union man or woman in this country, you can vote Republican and get screwed by their policy or vote Democrat and have things covered up when your union screws you. Either way it really doesn’t matter any more. Live life with honor, do right by your loved ones, and trust God. Thats my plan!

          • Richard

            It won’t.

            But refusing to pay dues won’t work either. Union officials will make your working life hell if you refuse to pay your dues.

          • http://justwatchthegame.com JohnSteigerwald

            What does that say about unions?

          • Richard

            And it’s not even so much that the rank and file “allowed” the bosses to get out of control. Voting on contracts is as corrupt as anything else.

          • Marcellus Shale DIscount Sale

            why are you so jealous of people who obtain power through collective bargaining? you would scold others for being jealous of the ownership class.

          • http://justwatchthegame.com JohnSteigerwald

            I’m not jealous. If you can get 50 weeks of paid vacation I say go for it. But if you demand 50 weeks and end up out of work, I don’t feel sorry for you.

          • Marcellus Shale DIscount Sale

            so tell my, why did local news destroy itself? it wasn’t the unions that made it unwatchable as entertainment, and useless as information?

          • http://justwatchthegame.com JohnSteigerwald

            It destroyed itself in terms of quality but it’s still wildly profitable. It dumbed itself down. Lots of people still watch. The audience just keeps getting older and dumber.

          • Richard

            Oh yeah, this stuff still happens and it’s incredibly stupid.

          • Richard

            Yeah, I also remember US Steel laying off workers who were months away from qualifying for pensions first. The fact is, the Steelworkers could have given every single concession, and the steel industry still would have collapsed.

          • Paul

            Speculation in its purest form. Ok, I’ll speculate that they could have given in and they still be in business..

          • Richard

            They did give in. Huge concessions were made by the USW in the early 80’s, and they didn’t mean a thing.

          • Paul

            Waaay too late

          • jferretti

            My father was USW and the 13 weeks was granted after 20 years of service and only occurred once, not every year.

          • http://justwatchthegame.com JohnSteigerwald

            I rest my case.

  • Mike

    Instead of crucifying GM, banks and hedge funds we should be learning from them. America can use the same “too big to fail” argument when it comes time to pay back China the money we have borrowed. Stick them with the bill. Debt problem solved.

  • Cary

    “The void left by GM would have been filled by other car companies and they would have needed to hire more workers.”

    Do have any numbers to back this up? Because it sounds like you pulled it out of your right wing ass.

    • http://justwatchthegame.com JohnSteigerwald

      Common sense. And if I am wrong then that would be proof that there is no need for GM. I always pull letting the free market decide out of my right wing ass. Feel free to keep pulling failed big government ideas out of your left wing ass.

      • Cary

        Knock off the smart ass routine and try to have an adult conversation. You are asserting that letting GM go bankrupt would not have been disastrous for the economy. Right? What do you have to back this up? Saying that Honda and Toyota would “fill the void.” That’s nonsense. nearly 1 million US jobs would have been lost. I know you feel like a victim because your tax money contributed. But do you really think the cost of the bailout was worse than 1 million people in the unemployment line?

        • http://justwatchthegame.com JohnSteigerwald

          Lost jobs can be found again. The federal government should…under no circumstances other than for national defense …..should be in the car business. As other posters have pointed out, companies go bankrupt all the time and they’re reorganized.

          • Cary

            In order to reorganize, bankrupt companies file a Plan of Reorganization that lays out how the company would restructure and pay its debts. It doesn’t happen automatically. If they can’t get the funding and a plan approved they go under. That’s what would have happened to GM. The administration made the decision to bail them out which turned out to be the right decision. It’s also a decision that any president would have had no choice to make after the bank bailouts, Bush, McCain or the ideologically pure Sarah Palin would have done exactly the same thing.

          • http://justwatchthegame.com JohnSteigerwald

            Nice theory.

          • saneman

            I am neither for nor against a GM bailout. I am sympathetic to your opposition to any bailouts. But I do see the other side. I don’t feel strongly one way or the other on this.

            Having said that, you keep taking spending on national defense off the hook. In the name of national defense, a lot of unnecessary expenses have been made. What is the scope of your definiition of naitonal defense? One would say spending more on retaining and hiring more better cops at home, improving schools, would make our neighborhoods safer than a dumb war in iraq .

          • http://justwatchthegame.com JohnSteigerwald

            National defense is the military. The federal government can’t have an occupying force in the US. Obama used Iraq’s democracy and newfound stability as an example during his speech last week on the Middle East. What example would he have used if Saadam were still putting people in shredders?

        • Paul

          “Saying that Honda and Toyota would “fill the void.” That’s nonsense”

          No, it’s not nonsense. First, they make better cars than GM, Ford, Chrysler….don’t take my word for it, look at Consumers Reports.

          Secondly, Honda Toyota, Nissan, BMW have factories right here in the good old USA! They make a lot of those cars here. Those are the ones that would fill the void.

          I’m guessing your problem is that those aren’t UNION jobs…

    • Gary M

      Cary,

      That noise your hearing is the sound of Milton Friedman doing the rotisserie spin in his final resting place.
      See, he was at first a devout Keynesian and huge supporter of the New Deal. then, through mathematics, he proved that government intervention into the market was not a good thing and advocated for less intervention into the market. That the market, if left to it’s own device, would produce much more effectively than with government intervention.
      When he won the Nobel Prize for economics, I don’t think they listed, ‘pulling it out of your right wing ass’ as a key foundation to his theories. I could be wrong.
      Oh, Obama called, the checks in the mail.

      • Cary

        Who was the guy that won the Nobel prize in economics a couple years ago? Little guy with a beard writes for the New York Times, teaches at Princeton. I guess you take everything he says as the gospel, right?

        I’m always amazed the GOP has any credibility on economics. I guess it’s because they’ve convinced people like you that the free market can do no wrong and tax cuts fix everything. You are a tool of billionaires. Maybe you’ll wake up some day.

        • http://justwatchthegame.com JohnSteigerwald

          You prefer European style socialism? You think the government’s not involved enough?

          • Cary

            Does “European style socialism” differ from, I don’t know, socialism? Which means government controlling certain industries that shouldn’t be run for profit? If so you and I both prefer that, we just disagree on the extent. I think government should run the military, a strong public school system, prisons, hospitals, fire department, etc. You would agree on at least a few of those right? Then you believe in socialism. I think the market has limitations and doesn’t work in certain situations, like providing heath care to old people. We’re both socialists you just have more faith in the market than I do.

          • http://justwatchthegame.com JohnSteigerwald

            I agree that the constitution allows for a military. It says nothing about public schools or federally funded colleges. Prisons would probably be more efficient if they were run by private companies. There’s no reason for the government to be in the hospital business. There’s nothing about me that is socialist.

          • Richard

            Prisons run by private companies have been tried. Remember the Cash for Kids Scandal from a few years ago?

          • http://justwatchthegame.com JohnSteigerwald

            Actually I don’t. Did you see the story last week about a judge freeing all of those inmates in California because of overcrowding?

          • Mike

            That “judge” was the Supreme Court. Frankly California should do what Arizona did and put up tents in the desert surrounded by barbed wire for inmates to live in.

          • Richard

            http://www.nytimes.com/2009/03/28/us/28judges.html?_r=1

            Basically, this guy got a contract for a private juvenile detention center, and he gave a judge money to convict kids.

          • http://justwatchthegame.com JohnSteigerwald

            So it required government complicity and corruption.

          • Cary

            If you believe in a taxpayer funded, government run military, you are a socialist. You just don’t understand what socialism means. Look it up.

          • http://justwatchthegame.com JohnSteigerwald

            Bullshit.

          • Cary

            That is the mark of a man who just lost an argument and knows it.

          • http://justwatchthegame.com JohnSteigerwald

            No, it’s the mark of a man who has no interest in wasting his time diuscussin such a ridiculous notion. if what you say is true, every nation in human history was socialist. It’s absurd.

          • Cary

            Now we’re getting somewhere. It is slowly sinking in to your rather thick skull. Every developed nation in the world is socialist to varying degrees. You live in the developed world, therefore you are a socialist. If you start arguing for a private for-profit military you can say you are not socialist. We’ll still have to work on the roads and bridges you drive on, the FDIC that guarantees your checking account, but I’m getting ahead of myself. You just need to let go of the notion that socialism is a bad word and a slippery slope to communism. You are a socialist, embrace it.

          • http://justwatchthegame.com JohnSteigerwald

            First, we have a rule here. You can disagree with or even make fun of what I say but you don’t get to insult me. That’s gutless because you’re doing it anonymously. Because you say something doesn’t make it so. No sane person would believe that all governments are socialist, which is what you’re contending. There’s a difference between Socialist with a capital S and government services. There are capitalists and socialists and they both drive on roads paid for by taxpayers. They are not one in the same. In fact, they’re not even close. I actually prefer toll roads, by the way.

          • Parker39

            ? Who are you talking to John? Who insulted you?

          • http://justwatchthegame.com JohnSteigerwald

            Cary said I had a thick skull. That’s not a fair fight because I can’t see his skull.

          • Cary

            I really had no choice but to describe your skull as thick because you have repeatedly railed against socialism yet you have no idea what it is. Which is strange since I explained it to you earlier. Socialism is the government controlling industries that should not be run for profit. Based on your last post you seem to think socialism is the opposite of capitalism. That is false. The US is socialist. All of Europe is socialst. Australia, Japan, Canada all socialist. Name a country that that is not socialist. Wait that is a waste of time because you can’t. How about this. Name an industry in the US that is purely capitalist. Name one industry that does not rely on some form of government assistance, other than the drug trade.

          • http://justwatchthegame.com JohnSteigerwald

            You gave me your interpretation of socialism and i’m not buying it. The US is not a socialist country. At least not yet. The Democrats keep trying and unfortunately we do have social programs which I think should have been declared unconstitutional. We may have creeping socialism and that needs to be reversed bu twe don’t qualify as a socialist country yet.

  • jferretti

    This contention shows a lack of understanding of the auto industry. For every GM worker there are many more employees working for contractors and suppliers of the corporation. The number is over a million. Seat and engine components, safety equipment, carpeting, etc. is purchased from other companies/suppliers. A lot of the engineering is also done outside the corporation. The failure of Chrysler and GM would have cost far more than 75K jobs; at least ten times that number.

    • http://justwatchthegame.com JohnSteigerwald

      What happened to all the people who used to work for Studebaker? How about those people building Ramblers? GM deserved to go out of business. They overpaid their workers to build bad cars. That’s not a good business model. The void left by GM would have been filled by other car companies and they would have needed to hire more workers. Why should I be FORCED to pay for GM’s stupid mistakes?

      • Niblick

        John, I have to disagree with you on this one. I feel that the U.S. auto makers represent a very core business in this country. jferretti makes some good points. Sure, if GM goes out of business someone might take their place. But that someone will probably be a foreign car manufacturer. Do you really want that? We have already lost a lot of the steel industry and other manufacturing industries to other countries. What happens in times of war? Do we ask a Japanese steel company to produce steel for our own weapons? What if the war is against Japan? Or China? That is not going to be easy. I think that certain critical businesses have to have some protection from going out of business.

        • http://justwatchthegame.com JohnSteigerwald

          How did we survive the loss of Packard, Studebaker and American Motors? They weren’t able to produce cars that enough people wanted to buy. Businesses that are designated “too big to fail” no longer have to maintain smart business practices. They can overpay their workers and make bad cars knowing that the government will always be there to CONFISCATE money from me and you to pay for their mistakes. You may be OK with being FORCED to pay a janitor working for GM $80,000 a year. I’m not.

          • jferretti

            We survived with other AMERICAN car makers. This time around there were no replacements except for the Koreans, Toyota and the Germans.

          • http://justwatchthegame.com JohnSteigerwald

            Then the AMERICAN car companies and the unions screwed it up, didn’t they? Welcome to the free market. Make a better product and people will buy it. If your labor costs make it impossible for you to make a better car at a profit, do something about your labor costs. I shouldn’t be forced to pay for their stupidity.

          • jferretti

            What free market? You mean the one where the Korean government underwrites all of their auto manufacturers’ pension plans? Where the steel purchases in Japan are heavily subsidized. Where the Chinese use slave labor? My brother is in Ford management and the world market is anything but “free”. He has traveled the globe and tells me we have severe competitive disadvantages with the foreign makers. And he is not sympathetic to the UAW.

            Oh, and the factories dump crap in their rivers, fire anybody who has the misfortune to get hurt on the job, and steal technology and patents. It is a different world out there and don’t think for a minute that you can simply lay this at the feet of the UAW and incompetent management here in your country. It is multi-factorial, and the subject article prompting these responses is way to simplified

      • jferretti

        You paid for other people’s stupid mistakes because a calculus was done that the cost to you and me may have been greater had the companies failed. Same calculus for saving AIG. You don’t have to like it, you just have to understand the rationale. Can’t blame the unions for AIG, can you?

        “Too Big to Fail” accounts for the thinking at the time. Right or wrong, we will never know. But clearly the Bush and Obama administrations believed the would be more harm letting them fail.

        • http://justwatchthegame.com JohnSteigerwald

          The problems began with government interference in the market and there’s a good chance it will turn out that things were made even worse when they interfered again to “save” us.

          • jferretti

            This is one of those unknowns John. Time will tell with your comment but we will never know what problems were possibly averted.

          • howard

            If you’re going to continue to just play one note…it could at least be in tune couldn’t it? You revisionism does not take into account the part that deregulation played in much this mess in the first place. I can appreciate a bias to your politics, but your political philosophy and facts of history are working against you on this one.

          • http://justwatchthegame.com JohnSteigerwald

            If they were de-regulated that means that they were regulated in the first place. In both cases its unnecessary government interference. Fannie Mae and Freddie Mac were at the heart of the real estate bubble. Toothless Barney Frank was still saying in 2008 that he didn’t see a problem.

          • howard

            And good ole boy Dubya wanted everyone to participate in the American Dream of home ownership.

          • http://justwatchthegame.com JohnSteigerwald

            It began with Jimmy Carter in 1977. Bush called for reforming Freddie and Fannie and the dems refused. Barney Frank and Chris Dodd, two of the most corrupt sleazeballs in congress kept saying everything was fine.

          • saneman

            Republicans were in charge of the White House, House of Reps, Senate for a good portion of the early 2000s. They had a chance to reform Freddie and Fannie Ass. If they could obstruct Obama’s agenda early in his presidency despite being the minority in the Senate, why couldnt they achieve some reform when they were in the total majority?

            And regulation is good because there is no such thing as a free market. You need regulation to actually protect the free market from forces that would hinder the free market – such as monopolies and lack of transparency in the disclosure and exchange of information between players that makes the free market work efficiently. When regulation fails, the answer is not to remove regulation, but to hold people in government accountable for such failure. Are you really liking COMCAST taking over everything? What kind of free market is there when COMCAST will favor an NBC run cable channel over an indepedent channel that may actually be better? THat independent run channel may not get a chance to get off the ground because of such an anti competititve environment.

            We need regulation to make sure the players know how much really an exec makes because too often the system is rigged where execs mislead their colleagues in a company by overstating how much value they bring to a company. A lot of those bonuses on wall street are out and out fraud because a lot of those profits vanished. That is why the guy from Europe wanted banks to have a minimal number of years for vesting salaries so that the profits are determined to be real to justify a mega million dollar salary.

          • http://justwatchthegame.com JohnSteigerwald

            The Repiublicans never had the power that the dems had from 2008 to 2010 when they controlled all three and had a filibuster proof majority in the senate. If I remember correctly it was 50-50 in the senate for a while with Cheney holding the tiebreaker. It was local government who gave Comcast a monopoly on cable service for all those years. How am I better served when if you’re not allowed to provide me an alternative to Comcast or Fios?

    • Anderson Hunt

      I disagree also. It’s not just about the GM workers. It’s the ripple effect across the national economy. If GM goes under, then so do the majority of the large and small businesses that are GM suppliers, car dealerships, etc.. You might get another car company to replace their cars on the market, but not the jobs in America that are supported by GM being in business.
      In addition, I do not think the math is correct. The final cost after paybacks is less than $16B for both GM and Chrysler. http://www.thecarconnection.com/news/1060907_gm-chrysler-bailout-loans-could-cost-taxpayers-up-to-16b

      I don’t think it is a stretch to think that at least 1 million people (plant workers, suppliers, dealers, etc..) had their jobs saved by this, which comes out to less than $16,000 per person. Given that those jobs were saved and now people are paying taxes on that income, it was a smart move for the long term.

      • Matt

        Chrysler is not even an American car company? Fiat just bought the gov’t stake, giving them 52% ownership. The whole bailout was less about current jobs and more about bailing out the UAW.

        • jferretti

          AIG was bailed out and I don’t think the UAW has a home there. Simply put, the thinking was there was more harm in NOT bailing them out and letting them fail.

          • Matt

            That was a different bailout and AIG was lent money that will be paid back. The auto industry was outright given money in exchange for an equity stake. The problem being that the equity stake is worth far less than the government paid for it.

          • jferretti

            Time will tell. The auto people are paying money back now.

  • Marcellus Shale DIscount Sale

    megan mccardle and math do not mix.

    read her commenters as they correct her errors.