Reply With Quote
So do you have a problem with Bush doing what he did?
GM would have failed under Dubya...but...
Motor AuthorityDuring an interview on Fox News last Tuesday, Cheney revealed that during his presidency George W. Bush did not want to be the one who “pulled the plug” on GM.
“I thought that, eventually, the right outcome was going to be bankruptcy,” Cheney said, referring to GM. “It had to go through such a dramatic restructuring to have any chance of survival that they had to be able to renegotiate labor contracts and so forth, and the president decided that he did not want to be the one who pulled the plug just before he left office.”
Cheney said that rather than acting on GM, the Bush administration “put together a package that tided GM over until the new administration had a chance to look at it.” This included the original $17.4 billion auto industry bailout package signed in by the Bush administration late last year, which was designed to give the incoming Obama administration some time to adjust and make preparations for the inevitable GM bankruptcy.
GM is expected to emerge from its ongoing bankruptcy in about 60 to 90 days as a separate New GM, of which 60.8% will be owned by the U.S. government. The restructured company will also be responsible for approximately $17 billion in total consolidated debt, as opposed to the $172 odd billion the old GM was servicing.
So do you have a problem with Bush doing what he did?
That he and his economic adversors set-up the govt. like a stack of cards thereby exacerbating our current economic crisis...
I thought it was a good punt.
W. even said this in the fall. He also said at the same time that he didn't want to be known as "the next Hoover"...thus, the bank bailouts. This was not the most courageous adminisitration in history when it came to asking the American population for sacrifices.
Bush continued the voodoo economics fantasy of "you can cut taxes and simultaneously increase defense spending and it will all be okay because the economy will grow so strongly that the increased tax revenues from people making so much money will balance the budget." This nonsense didn't work under Reagan and it didn't work under W. Somebody, someday, is gonna have to tell the American public that we are gonna have to pay more in taxes and lose some services. The folks in California never wanted to accept that reality and now they are dealing with the consequences.
At some point, doesn't it stop being worthwhile laying blame (both Republicans - who never want to pay any taxes - and Democrats - who want to spend everybody ese's money on projects that sound nice but are unaffordable - ) and just accept the reality that neither option is acceptable, and nothing will help until some of BOTH things happen?
I wish that Republicans had more fiscal credibility than they do, because there really does need to be some brakes put on Democratic spending. Unfortunately, though, there is no credibility in either party. It appears that the Obama stimulus is having some good impact on the recession. But, that does not mean that we can just go and introduce huge new health care costs, without waiting until some revenues are coming back into the treasury from people working.
Libertarians are the only fiscal conservatives. They understand government cannot be trusted and is simply not capable of fiscal conservatism.
Not capable.
So is that a "yes, I think Bush should have let GM & Chrysler go under" or a "no, Bush did the right thing here"?
One thing I hate about Propaganda Dan's postings (quotes and links) is that he takes an article that sounds good rather than the source, and is never a complete transcript in context. It leave out a very important sentence to President Bush's thinking:
Transcript: and Liz Cheney 'On the Record'VAN SUSTEREN: On last question is on GM. We've spent an awful lot of money since last fall on GM to only have them end up in bankruptcy. Going back to last fall, would you have let them go into -- or would you have pushed them into bankruptcy, do you think then, I mean, now that we've spent billions, or did you think that it was sort of a good idea to do what we've been doing?
D. CHENEY: Well, I thought that, eventually, the right outcome was going to be bankruptcy. They had to go through such a dramatic restructuring to have any chance of survival that they had to be able to renegotiate labor contracts, and so forth. And the president decided that he did not want to be the one who pulled the plug just before he left office.
VAN SUSTEREN: Why?
D. CHENEY: Well, I think he felt, you know, these are big issues and he wouldn't be there through the process of managing it, but in effect, would have sort of pulled the plug on GM and that was one of the first crises the new administration would have to deal with. So he put together a package that tided GM over until the new administration had a chance to look at it, decide what they wanted to do.
VAN SUSTEREN: But it's cost us billions to get -- I mean, you know...
D. CHENEY: It has.
VAN SUSTEREN: I mean...
D. CHENEY: And now the government...
VAN SUSTEREN: I mean, and we've now spent billions.
D. CHENEY: And now the government owns a big chunk of General Motors. That bothers me. I don't like having government own those kinds of major financial enterprises. I think it's -- it does damage to our long-term economic prospects when we get government involved in making those kinds of decisions.
The private sector then I think will be very different, function differently, if it's full of government-owned enterprises, than would otherwise be the case.
(CROSSTALK)
L. CHENEY: It also sets up, though, you know, an interesting debate and discussion for the American people going forward. And I think that as you see this administration, you know, moving the government towards playing a much larger role in our economy and in society, you know, you're going to see, I think, you know, many of those people who describe themselves today as independent voters, for example, taking another look at this administration, at the way they voted this time around, you know, realizing, I think, that they don't really want the government controlling vast segments of our economy. They don't want to pay higher taxes. I think it will, you know, put us in what is probably a healthy situation in terms of the debate about the role of the private sector going forward here.
the fact that "he wouldn't be there through the process of managing it" is no minor miracle.
I don't have a problem with Bush punting that one. The reasoning is valid.
Letting GM go bankrupt at that point would have really tanked the economy. At this point, there has at least been more time to do it in a reasonable way.
that's right.
The economy "really tanked" regardless and GM's own tank job had been going on since 2005. The effect of their filing bankruptcy on the economy as a whole was negligible. Between Bush wanting to keep one more bullet item off of the list of reasons why people hated him and him owing it to Obama to save GM until Obama could enact his plan, Bush was justified in doing what he did. But in terms of June 2009 being a "better" time for a GM bankruptcy filing than November 2008, that's just not true. Unemployment is higher, more homes are in foreclosure and consumer spending is lower.
I really believe now is a better time. Not that it is a "good" time now, but that it is not "as bad" as it would have been last fall. Last fall the financial system was in freefall and the gov't. was bailing out financial ins utions in order to avoid a complete meltdown into chaos. Right now, the financial system is stronger than it was then (no, I'm not saying it is great...nothing is great right now), credit markets are open again ( which they were not at the time), and although there is greater unemployment now than there was last fall, the bankruptcy procedure now will create fewer unemployed than would have been the case had the bankruptcy occurred during the credit crisis.
All of this is to say that both Bush and Obama (and Cheney) knew all along that there was no way to get GM out of its overwhelming debt obligations as well as its contractual arrangements with both its dealers and the UAW without having it go into bankruptcy. But, politically, neither party could address that realistically in front of a national election. The decision to "save" the industry is truly a policy decision...some conservatives and some liberals agree that the American manufacturing industry for autos had to be saved...So this is what we got. It is ugly, but I honestly think that this is pretty close to what would have happened regardless of which party won the presidency.
It is absolutely not pure capitalism. But it is also not pure socialism. I think it is the result of American manufacturers having screwed the pooch for so damn long the government stepped in.
We have to hope it works, for our own economy's sake.
obama gave gm even more money.
You're right that the decision was political and that's going to trump everything else. That being said I don't think the status of the financial ins utions has much to do with GM's situation and when the best time for them to file was. It's not like the banks were putting any money in to GM. The taxpayers are picking up the tab now and the taxpayers would have picked up the tab then. Even if the banks were in good shape they weren't going to go anywhere near GM because they knew how screwed up GM was.
My fear here is that by delaying GM's filing so that Bush could punt and Obama could put on his bankruptcy is not an option / bankruptcy is an option / okay they're bankrupt but it's not my fault charade we've put GM 6 months behind the curve and they risk not being properly positioned to take advantage of the recovery, should it start within the next 6 months or so. As I see it it's far better to go through bankruptcy during a period where people aren't buying cars anyway than to be caught still in bankruptcy when the recovery starts and people start buying cars again.
GM could've made a decision itself instead of waiting around for a handout. Ditto Chrysler.
They could have, but thanks to the Chrysler bailout of the 80s, and the millions upon millions of dollars the UAW pumps into Democrat campaign coffers, they knew the government would never let them go under. Thus they never had an incentive to do anything. Why take the bullet yourself when the government will gladly make the taxpayer do it for you?
Moral hazard doesn't have to stop you from doing what's right, but this is a good point.
There are currently 1 users browsing this thread. (0 members and 1 guests)
Posting Permissions
