Tell me it ain't so. We're considering an auto bailout?
My objection to the proposed auto bailout is that the auto companies were the ones at fault -- not funding the pensions correctly in earlier, good years. It is not the auto industry per se that is being hurt -- the companies can simply go bankrupt and then the Pension Guarantee Board or whatever it is called will take over the pensions and the taxpayers are still liable.
It is the workers who are being hurt by not having the pension they were promised. Recall that their wages would have been higher, all else equal (which it admittedly never is) if the company hadn't been supposedly funding their pensions.
The companies are at fault here, totally. They should have funded the pensions, they didn't. In those time periods, the management and BODs were probably paid bonuses by seeming more profitable by NOT funding the liabilities as they should have. It is inconceivable that we bail out the COMPANIES.
If the auto industry is not making enough to survive, they either need to raise prices or fold. Ugly times are coming, folks.
Regards,
Trond
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3 comments:
Hi Trond,
Honestly, I agree, but then why are we bailing out the banks?
Those banks that didn't friviously lend out money willy-nilly to people and did their homework (ie checked credit, ensured proper income on those they lent money to) will survive (My guess one of the last survivors would have been Wells Fargo).
Same with the people who are losing their homes, why should home owners be bailed out? You have suggested, the same as what the banks are doing, lowering principle and interest rates. Why do we allow this? Should people not have planned ahead to ensure they had equity in the houses they purchased? Many are in negative equity because they purchased the house and made "interest" only payments. Is making "interest" only payments not the same as auto companies "NOT funding the liabilities" (or should I simply say not planning for the future)
I would be sad to see GM, Ford and/or Chrysler die. I'm a big auto fan, but I agree. Let the chips fall where they fall.
Also why are corporate executives of big banks still getting paid BONUSES if the government is bailing them out. Their excuse of the money not coming from the bail out money makes little sense to me. If they want to pay bonuses they shouldn't be taking the bailout money at all!
That's like me asking the government to give me food stamps so I can purchase food to survive, but then go and use the money that I have left over so I can go cruise around in my nice new Cadillac Escalade. (Which is yet another thing that makes me sick when I see people with decked out chrome Escalades going to WIC programs - Women Infants and Children to get food) Excuse me, if you have money to buy yourself a nice riding Escalade, you shouldn't be getting money from the government to eat.
Oh well, I'm sure I was ranting.
Anyways I agree. Stop taking money from the responsible to give to the irresponsible.
Oh, and what about AIG? How much more are they asking for? I believe it was something like $40 billion!
They have used the money for what? Spa Resorts? My opinion, let them go under too.
One additional note.
I think as long as any company, be it a financial institution, or auto maker (which I honestly believe are 50% financial institutions themselves), should NOT be allowed to give contributions to any government related employee until they are able to stand on their own. In other words, no kick backs to senators, representatives, governers etc. until the companies are healthy.
yeah, like I'd ever see that written in.
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