General Motors Bankruptcy

[Achtius]

As a concerned American citizen I wonder what the course of action our current administration is taking foreshadows in relation to their handling of similar situations in the near future. I hear the news that our federal government will hold 70% of ownership and wonder how they will be able to keep a truly "hands-off" approach when they are hand-picking the board of directors for the post-Chapter 11 General Motors. I am not one of those paranoid conservatives spouting off with that oh-so-clever play on abbreviations (Government Motors), and I don't think the government is moving us towards socialism at the fastest pace tolerable to the American public, but what I do see is a radical change in the way our economy works. You can't give one company $30 billion one day and tell the next struggling company "Tough-luck, it's a free market!". President Obama promised unprecedented transparency but for all the explanations of what his administration is doing, I find myself more and more confused as to the why.

[Kailen]

I really can't see how you can begin to argue that Obama's administration isn't moving us towards socialism in the fastest way. He already owns two of the three pillars needed to make it happen. i.e Banking Industry, Automotive Industry, and soon health care industry.

[Achtius]

I can't say that for a fact socialism is the ultimate goal of Obama's administration. I am not a fan of his policies, and I didn't vote him into office, but I won't make the claim when it's not something anyone besides him really knows the answer to. If that is his motive then I think it should become clearer in time, and I sincerely doubt that Americans will welcome the idea. I believe that they will most definitely put a stop to it should it become an undeniable goal of his or the Democratic party. Saying that, I don't think Republicans, conservatives, or even independents help their respective causes by alienating those individuals who see it as fear-mongering.

[Malacasta]

http://correspondents.theatlantic.co...looks_like.php

[Xinefus]

ahem... bused..


hehe, i really ddin't want this to sound like a flame.. and it still isn't. that post was just so neat.

[Achtius]

Thanks Malacasta! That actually puts into perspective how erroneous the idea that the US Government is taking over our nation's economy. I hear from many of my extremely conservative co-workers how we are only a few steps away from socialist police state and I can't rationalize that thinking.

[Kailen]

You don't need to take over the entire private industry. You just need to take over the 3 key industries to control the rest. Again, those key Industries are Banking, Automotive, and Health care. You control these then you effectively control (heavily influence) the rest, and the wheels of socialism effectively on the road.

Malacasta's chart doesn't tell the complete story.

[Achtius]

By what standard are those 3 the keys to taking over the entire private industry? I am not arguing, I am genuinely wondering what thinking is behind that and who came up with that standard for industry. Truthfully I am not educated extensively in economics. I can handle individual investment but I am not an expert on the driving forces of the entire industry. So if controlling banking, healthcare, and the auto industry means you control everything else (kind of like owning Boardwalk AND Park Place) where is the economic theory behind this?

Afterthought: Oh and how has the goverment taken over all these industries, it is my understanding that the government has to sell back it's shares in companies it effectively owns, and that TARP money can be repaid as soon as a bank is profitable and able to demonstrate an ability to conduct business responsibly.

[Malacasta]

Originally posted by Kailen
You don't need to take over the entire private industry. You just need to take over the 3 key industries to control the rest. Again, those key Industries are Banking, Automotive, and Health care. You control these then you effectively control (heavily influence) the rest, and the wheels of socialism effectively on the road.

This is an assertion. Who is saying it, and why are they saying it? What are the arguments to back the points up? An assertion isn't an argument no matter how loud the voices are in the echo chamber. Did you read the article I linked to, if you did, why didn't you comment on the point he was making about degrees?

Furthermore, I don't understand what this 'socialism' is you are talking about. Is it the same as say 'democratic socialism' in Sweden, or is it more like 'North Korean socialism', maybe it's like 'Canadian Socialism' or 'Australian Socialism'? Using a word to describe something when you have not even explained what that word means (and it could mean any number of things) isn't the way to win an argument.

Don't get me wrong, you might have a really good point and I might even agree with it. I just don't know what it is and I have no idea what I'd be agreeing to.

EDIT: Sorry, this is basically a repeat of Achtius' post.

[Rosuav]

Originally posted by Achtius
Afterthought: Oh and how has the goverment taken over all these industries, it is my understanding that the government has to sell back it's shares in companies it effectively owns, and that TARP money can be repaid as soon as a bank is profitable and able to demonstrate an ability to conduct business responsibly.

Yeah. You give a company some money and say "Oh, and you should be repaying this as soon as you can". Reckon it's going to be paid back any time soon? I don't.

Unless there's something in the contract that requires it to be paid back across so-many years, or something, it won't be. If it's just "when the bank becomes profitable", then it's open to abuses involving the definition of profit and still won't be paid back in the near future. And quite possibly the money won't _ever_ be paid back. Definitely won't be if the banks don't get chased for it - who ever heard of a bank voluntarily giving up money?