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What was the threat?
It's a commonly used metaphor for "threat" or "The big stick" if you don't take the carrot.
I concede the bondholders did not have a REAL gun to their heads. You win. Whoopee!
What was the threat?
Couched in those terms, and considering the collateral damage as even more lost their jobs as suppliers' buisinesses went under, I suspect $50B might've been a pretty good buy.
As the supplier chain imploded, it would have had a huge, negative impact on Ford, Toyota, Honda and any other manufacturer that builds/assembles from US sourced parts.
From GM Insider during the negotiations:
The majority of GM bonds is held by the largest banks in the U.S. One of which is JP Morgan. In an effort to nearly force the debt holders to agree to a debt-equity swap, the Senate is considering legislation that would require the bond holders to agree to swap or they would potentially lose their TARP funds. We're told part of the deal would also automatically reject said bond holders from receiving any further TARP funding if they were to deny swapping GM debt.
it would be nice if people could see the entire screen.
So the threat for not accepting the taxpayer bailout was not being bailed out by taxpayers?
The ironing is delicious.
Last edited by ChumpDumper; 08-20-2010 at 03:17 PM. Reason: preposition fail
Here is a novel idea: Have the Congressional Budget Office in conjunction with the major auto manufacturers and suppliers estimate the financial impact to our economy by letting GM go. This seems to make more sense than assuming the broader economic impact would have been far more devastating.
The bailout only makes sense if the company can regain profitability. Without addressing the issues that led GM down the road of ruin is simply putting off the inevitable with the added burden of throwing away our 50 bil. I think GM should have been helped, I don't agree that the government assisted impartially with the greatest sensitivity to the taxpayer.
In other words, the threat consisted of rescinding TARP funds you yourself have argued were inappropriate gov't intervention in the market.
Do you play both sides of the fence much, CC?
Wow if only someone would have done this back when this was being discussed.
Except they did. There are studies that show the amount of burden on the taxpayer FAR in excess of what we spent to bail out big auto.
Can someone remind me again what percentile CC was in?
Great!! Can I see it?
Center for Automotive Research out of Ann Arbor. Anything from the congressional budget office? Almost seems like the tobacco companies doing research on the health risks of smoking. Don't have a problem with the government stepping in. I think the government gains an enormous amount of credibility if they come to the people and explain with numbers and reasons why they are doing it. Here is what we are spending and why, here is the impact to all parties, this is why we think it will work and this is when would expect to be fully reimbursed.
All dessert and no greens, as it were.
Do you have a problem with anything in the actual study the posted other than where the center is located?
it's funny. half the time people claim the cbo can't find their ass in the dark.
The problem is that even if they were to do that (I'm not sure wether they did or not, honestly) it gets lost in the partisan innuendo. For the right, it doesn't matter if the numbers add up. It's all about "more and bigger government", "socialist state", etc etc etc. The minutiae is basically irrelevant to the discourse.
Obviously, when they actually had to decide to bail out the 'too big to fail' banks, the majority had a vote at hand.
It works just the same with the left in other topics, for example, tax cuts. It doesn't matter if they favor middle and lower class somewhat. If there's even a hint it might give some sort of relief to the upper class, then you get the "tax cut for the rich" innuendo.
The middle class already make out like bandits wrt federal taxes. Both parties suck up to that group as if they know what a 30%+ marginal federal tax rate is like.
People understand the concept just fine. They agree with it. That's why corporate welfare is so popular and so readily endorsed by both our political parties.
99th every time. Did you even crack top 50?
Soak the rich, because obviously the rich are immoral whereas the virtue of the people is without par.
I obviously don't write the rules or things would be VERY different. The fact that I might have disagreed with TARP has nothing to do with whether it was real or not and whether the banks wanted it.
A threat is a threat is a threat.
If you don't take this load of free money, we won't give you another load of free money.
You can threaten me with this any day of the week.
No wonder you love your President so much.
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