Comments on: More Bailouts… Are You Still Angry?

By: Schwamie

Schwamie — Mon, 04 May 2009 18:10:44 +0000

Again, a little late, here is a rant….If we are to assume that we are a Capitalist nation, then we defer to the belief that the weak die off and the strong survive. Let those that cannot survive go under and from the ashes, the phoenix will resurrect itself. There will be the companies that have the dollars to buy up these “lost souls” and make themselves a stronger company or a VC firm could go in with a potential investor/owner and form some new conglomorate that will be run at a profit. The jobs have already gone away and this would allow for new jobs to be created WITHOUT a bailout. Let the system run its course. Somebody should go back and read Adam Smith’s “Wealth of Nations” or at least take a beginning business course!

By: FedUpGal

FedUpGal — Wed, 17 Dec 2008 00:30:11 +0000

I am so disgusted with the whole auto thing – it seems to me that they figure they are absolutely necessary to the economy, and that the government will be FORCED to bail them out over and over again due to the sheer numbers of people directly or indirectly employed by them.
They think it shouldn’t matter that the vastly over-paid CEO’s make stupid/bad decisions, and that their unions make outrageously greedy and ludicrous demands (it seems to me that they no longer know what to ask for so their demands are now over-the-top) What happened to previous bailout monies given to these companies – they just keep coming back with their hands out over and over, and I deeply resent the fact that they seem to think they are entitled, and should be recession-proof. I, like many others, am also facing lay-off or even completely losing my job – where is my (small business)company’s hand-out??? I would be willing to take a pay cut to keep my job if necessary – something the unions seem reluctant to consider. GET REAL – and maybe even get rid of the too-powerful greedy unions -perhaps they have outlived their usefulness and now are just a big part of the problem!!!

By: Lazy Man

Lazy Man — Tue, 16 Dec 2008 00:27:22 +0000

I haven’t tried to get here from another country without iron-clad credentials (military ID, passport, drivers license, etc…)

I know that I went though a bit of trouble to go Australia and Thailand, so I’m not convinced there are barriers to entry for those that are willing to work within the guidelines.

By: anthony

anthony — Mon, 15 Dec 2008 23:55:49 +0000

I think we will have to fix our world image and since 9/11 not so easy to get in country, or worth the trouble to other countries.

By: Lazy Man

Lazy Man — Mon, 15 Dec 2008 20:26:22 +0000

I guess I just don’t see where it ends, where the line is drawn in the sand. The problems with the car makers pre-date this economic downturn.

I don’t mean borrowing from other countries. When you do that, you create more debt and interest on top of that debt. It’s going in the opposite direction.

I mean Americans should come up with ways to bring foreign dollars to the US. An example is tourism. If we can somehow boost people from other countries to come to the US and say visit the Statue of Liberty (just a random example) they buy goods and products from people in the US. That’s money that wasn’t in the US that now is.

By: anthony

anthony — Mon, 15 Dec 2008 18:54:33 +0000

I dont really like it but i think it is the lesser of 2 evils pay billions now or trillions later because of the ripple effect of them failing.
I think the cars guys are just hoping they can hold on long enough for the turn around

LazyMan..The other option is to bring in new money from other countries. This â€œfixesâ€ the issue as it has no drawback for Americans.

I intersted in this do you mean barrow, and from what countries?

By: Lazy Man

Lazy Man — Fri, 12 Dec 2008 15:09:04 +0000

If anyone has any spare TGI Friday gift certificates they don’t want, they can send them to me.

By: Sadie

Sadie — Fri, 12 Dec 2008 12:32:48 +0000

“TGI Friday’s would have to make really mediocre food that nobody wanted to eat”

done and done!

By: Slinky

Slinky — Thu, 11 Dec 2008 20:44:58 +0000

I hate the bailouts, there’s no end in sight, and the government doesn’t have a clue what this strange line thing people talk about even is.

I said it before, and I still say it, and I’ll go on saying it – let the economy sort itself out. I think the bailouts are just prolonging the problem. They’re propping up failing businesses. Are those businesses really going to recover and come back strong? Probably not. Even if they do, we’re likely better off with some other company that was able to stay solvent or at least afloat. Why do we want to keep companies that make stupid business decisions like sub prime loans around?

By: Fit Wallet

Fit Wallet — Thu, 11 Dec 2008 13:09:31 +0000

Actually, to compare you asking for bailout money to the automakers, you’d have to stop posting anything useful or interesting–THEN ask for money. Likewise, TGI Friday’s would have to make really mediocre food that nobody wanted to eat–THEN ask for a taxpayer subsidy. This is essentially what the auto industry is doing. I don’t care if GM is as American as apple pie. The times have changed, and this is a dying industry. Why do we keep taking out the shock paddles to revive it at taxpayers’ expense? Ugh!

By: Lazy Man

Lazy Man — Wed, 10 Dec 2008 15:22:21 +0000

Yes, T.G.I. Fridays was just an example of a number of any sit-down restaurants that could line-up for a bailout.

I think fast food places are doing well as people are choosing those lower cost options.

By: Matt - SF

Matt - SF — Wed, 10 Dec 2008 06:33:24 +0000

For some reason, I flashed back to the old UBS Evening News scene where Howard Beale shouts “I’m mad as h**l, and I’m not going to take this anymore!”.

I’ve been somewhat vocal on the subject matter, and I’ve asked this question:

Ask a line worker at a Honda or Toyota plant (U.S. based) if his/her tax dollars should go to bailing out the Big Three.

By: East Side Food Geek

East Side Food Geek — Wed, 10 Dec 2008 04:15:46 +0000

The thing that makes the Big Three different than, say, TGIFriday’s is scale. If TGI Friday’s went out of business tomorrow, it would hurt some people, but not enough to affect the larger economy.

If, on the other hand, Friday’s, MacDonald’s, Wendy’s, Burger King, Arby’s, Chili’s and all the other major chains went under, even though there would be a lot of restaurants left, it would impact the economy enough to create a domino effect, and that could be disastrous.

The Big Three don’t deserve a bailout, but the portion of the economy they represent needs a bandaid until the damage can be rectified.

Yeah, they’ll be back wanting more, and yeah, they’ll misuse every penny they can get away with. (I’m from Michigan. We know how adept the Big Three are at taking local governments for every penny they can.) But that just means there has to be serious oversight.

By: Writer's Coin

Writer's Coin — Wed, 10 Dec 2008 02:15:30 +0000

I was pretty firm on my opinion about all this: let them declare bankruptcy just like the airlines have done. Maybe then they’ll learn their lesson. Then I read this article by Ben Stein and he pulled all the right strings because now I’m rethinking it…

By: Jason

Jason — Wed, 10 Dec 2008 01:09:00 +0000

Pumping up the money supply should melt a credit freeze. The Fed chairman faces huge obstacles
in trying to restart the credit engine and get maxed out consumers spending again. Given the
scale of the Fed’s interventions, it should be weakening the value of the dollar and setting
us on a course toward inflation. Inflation happens when prices rise. Deflation happens when
they fall. In this December’s dark economy, falling prices for gasoline, cars, and clothes and
just about anything would seem like a silver lining.

http://nomedals.blogspot.com

By: Slacker

Slacker — Tue, 09 Dec 2008 20:13:21 +0000

The economy for the most part should fluctuate. It is the job of the government to avoid unnatural or overly emphasized fluctuations. Most people don’t understand that there has to be recessions and growth. I think throwing good money at bad has always been one of the worst decisions you could make with money for a business or for a country.

As you know, I’m all about easy. And the easy (and best course of action) thing to do is to let these companies try to stick it out on their own. The strongest will survive, lean and mean, and ready to make a huge come back when the cycle circles back. The others will be sold off, file for bankrupcy, but that’s what happens to underperforming companies in any type of market condition. If you want to spend money, pay people to fix our roads and invest in education. This will have a far greater return.

I think I’m inspired to write a post about this now…

- Slacker
http://www.theslackermethod.com

By: Goalhunter

Goalhunter — Tue, 09 Dec 2008 19:59:46 +0000

And I agree with you Lazyman that US car makers have a pretty poor business model.

I’ve always wondered how a huge company like a GM or some airlines or some telecoms can lose money almost in perpetuity. But I’ve been too lazy to investigate. Maybe one of your commenters can say.

By: Mr. ToughMoneyLove

Mr. ToughMoneyLove — Tue, 09 Dec 2008 19:50:40 +0000

My problem with the bailouts is that there are no clear standards as to who is and who is not deserving. It’s more a matter of who has the most political clout. As for advertising, I agree that in a down economy, businesses should be doing more, not less, but for gosh sakes, businesses need to quit talking about the bad economy in their advertising. Rebuilding confidence is the key to recovery and wallowing in pity is not constructive.

By: Lazy Man

Lazy Man — Tue, 09 Dec 2008 19:11:04 +0000

I agree with that scenario Goalhunter.

I see a different problem that’s summed up by Kosmo and Jeremy above. The car makers just weren’t making enough profit on their 1,000,000 (to use your nice round number) to have left over money at the end of the month. They’ve been losing money for years now. In the past, it’s not a problem because they just hit up a bank for a new loan. That doesn’t work now for two reasons: 1) the one you pointed out, frozen credit and 2) you just can’t keep getting loans on loans to sustain your business. At some point you have to make a profit.

The bailouts don’t really fix anything because the government has to recoup the money for the bailouts somehow. It can either raise taxes, which will cause people to be less able to buy cars (i.e. that doesn’t work). It can try to print more money, which causes the dollar to lose value which is all sorts of bad for America. The other option is to bring in new money from other countries. This “fixes” the issue as it has no drawback for Americans.

By: Goalhunter

Goalhunter — Tue, 09 Dec 2008 18:56:51 +0000

One of the problems with a “credit crunch” is that any business will die. Say my business is to buy $1,000,000 worth of goods from a supplier, he gives me 30 days to pay, I sell the goods for $1,050,000 — paying the supplier back, paying $30K for rent and sales-people and ads, and earning $20K at the end of a month for myself. A typical store, maybe like the size of a pharmacy or grocery store.

If I can’t get the 30 days worth of credit then my business is done. There will be a vacancy, several people unemployed, etc.

This will also hit my supplier because they didn’t give me credit terms likely because they are tight on their own working capital. Supplier folds too if not for the same reasons as me, at least because I folded and couldn’t buy his goods.

The business exists because of credit. There would be no way to run that business without credit unless you started tiny and saved up for a gazillion years … I’m talking like 20 years or something.

It’s why America has big stores and cheap stuff while countries with no good credit system have kiosks and tiny shops.