"America loves a winner and will not tolerate a loser" - George Patton
Joined: Jul 2009 Gender: Male Posts: 5,180 Location: Fallbrook, CA
Why the Obama auto bailout was a bad idea. « Thread Started on Jul 6, 2011, 12:42am »
Obama wants everyone to believe that his expensive auto bailout was a great deal for the auto industry and for America. Well, the truth is that it was neither. It cost much more than was needed and, even worse, has likely set some very bad precedents.
Talk about a cure that was worse than the disease!
Obama wants everyone to believe that his expensive auto bailout was a great deal for the auto industry and for America. Well, the truth is that it was neither. It cost much more than was needed and, even worse, has likely set some very bad precedents.
Talk about a cure that was worse than the disease!
The auto bailout was much better for the country than the bailout given to the banks. At least the $$ went to honest hard working Americans instead of to a bunch of crooks.
Obama wants everyone to believe that his expensive auto bailout was a great deal for the auto industry and for America. Well, the truth is that it was neither. It cost much more than was needed and, even worse, has likely set some very bad precedents.
Talk about a cure that was worse than the disease!
The auto bailout was much better for the country than the bailout given to the banks. At least the $$ went to honest hard working Americans instead of to a bunch of crooks.
I contend that neither bailout did any good and that both just helped out a bunch of crooks and victimized some hard working folks.
Re: Why the Obama auto bailout was a bad idea. « Reply #3 on Feb 23, 2012, 4:33am »
It is a bad idea because the government fund is going to lose billions more on its automotive bailout than it planned. The Treasury Department expects to lose $9 billion more on the automotive bailout, increasing the total loss to an estimated $23.6 billion. And these increase is largely due to a slide in General Motors' stock price. The bailout is expected to play large in presidential politics. President Obama has made multiple trips to auto plants in the Midwest to tout the success of the bailout. While GM has seen a strong resurgence in the U.S., its stock price has fallen out of concerns about its sales around the world, especially in troubled Europe. Just read this article GOP presidential candidate Rick Santorum blasts automotive bailouts
It is a bad idea because the government fund is going to lose billions more on its automotive bailout than it planned. The Treasury Department expects to lose $9 billion more on the automotive bailout, increasing the total loss to an estimated $23.6 billion. And these increase is largely due to a slide in General Motors' stock price. The bailout is expected to play large in presidential politics. President Obama has made multiple trips to auto plants in the Midwest to tout the success of the bailout. While GM has seen a strong resurgence in the U.S., its stock price has fallen out of concerns about its sales around the world, especially in troubled Europe. Just read this article GOP presidential candidate Rick Santorum blasts automotive bailouts
So I suggest that Treasury not sell until the global economy is better. Stock prices go up as well as down.
How selfish soever man may be supposed, there are evidently some principles in his nature which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it. Adam Smith
"America loves a winner and will not tolerate a loser" - George Patton
Joined: Jul 2009 Gender: Male Posts: 5,180 Location: Fallbrook, CA
Re: Why the Obama auto bailout was a bad idea. « Reply #5 on Mar 1, 2012, 10:41pm »
GM is likely to need a lot more in the way of bailouts to be able to develop a whole new line of vehicles that will meet the new mileage standards. (The Volt is NOT the answer!)
As for the bank bailouts, a total collapse of the financial system really would have killed our economy, so I (somewhat reluctantly) think that was a necessary move.
Re: Why the Obama auto bailout was a bad idea. « Reply #7 on Apr 28, 2012, 8:45am »
How so? Real entrepeneurs would have picked up the pieces, brought newly formed businesses, hired the people who want to work and not just sit around collecting a paycheck, and created cars that people would have wanted to buy.
GMC cars are the ugliest pieces of scrap anywhere. There is no wonder why GMC cars claim to get good gas mileage. Who the hcal wants to drive an ugly car?
Moral: if you want to get good gas mileage, just drive an ugly car. You'll always be borrowing your mom's BMW instead.
GM is likely to need a lot more in the way of bailouts to be able to develop a whole new line of vehicles that will meet the new mileage standards. (The Volt is NOT the answer!)
As for the bank bailouts, a total collapse of the financial system really would have killed our economy, so I (somewhat reluctantly) think that was a necessary move.
AzWm
The bank ( financial system) bailout could have been done much smarter. For one item of discussion, why are Fannie and Freddie still involved in the majority of home loans? Why are not banks keeping and servicing all their own loans and managing their own loan portfolios? Are we starting down the path of building another house of cards?
GM is likely to need a lot more in the way of bailouts to be able to develop a whole new line of vehicles that will meet the new mileage standards. (The Volt is NOT the answer!)
As for the bank bailouts, a total collapse of the financial system really would have killed our economy, so I (somewhat reluctantly) think that was a necessary move.
AzWm
The bank ( financial system) bailout could have been done much smarter. For one item of discussion, why are Fannie and Freddie still involved in the majority of home loans? Why are not banks keeping and servicing all their own loans and managing their own loan portfolios? Are we starting down the path of building another house of cardsi?
I suspect the banks don't keep the loans because they don't want the take on the interest rate risk. Do you remember what happened to the S&Ls in the 1970's?
How selfish soever man may be supposed, there are evidently some principles in his nature which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it. Adam Smith
The bank ( financial system) bailout could have been done much smarter. For one item of discussion, why are Fannie and Freddie still involved in the majority of home loans? Why are not banks keeping and servicing all their own loans and managing their own loan portfolios? Are we starting down the path of building another house of cardsi?
I suspect the banks don't keep the loans because they don't want the take on the interest rate risk. Do you remember what happened to the S&Ls in the 1970's?
So who takes the risk if banks resell the loans? Who is the ultimate bag holder? It is you and I!
I suspect the banks don't keep the loans because they don't want the take on the interest rate risk. Do you remember what happened to the S&Ls in the 1970's?
So who takes the risk if banks resell the loans? Who is the ultimate bag holder? It is you and I!
You asked the question. I agree with your response to my answer. How do you want to remedy this? Is there a market based remedy?
How selfish soever man may be supposed, there are evidently some principles in his nature which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it. Adam Smith
So who takes the risk if banks resell the loans? Who is the ultimate bag holder? It is you and I!
You asked the question. I agree with your response to my answer. How do you want to remedy this? Is there a market based remedy?
Yes there is a market based answer. It would involve making loans where the taxpayer is replaced as ultimate backer of loans with the banks and the home buyer. It would mean a little higher interest rate, higher down payment requirements and a resultant longer recovery in the building industry. Those things are not pleasant, but it would put everyone on a much surer footing.
You asked the question. I agree with your response to my answer. How do you want to remedy this? Is there a market based remedy?
Yes there is a market based answer. It would involve making loans where the taxpayer is replaced as ultimate backer of loans with the banks and the home buyer. It would mean a little higher interest rate, higher down payment requirements and a resultant longer recovery in the building industry. Those things are not pleasant, but it would put everyone on a much surer footing.
The banks don't want the risk. How do accomplish your answer?
How selfish soever man may be supposed, there are evidently some principles in his nature which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it. Adam Smith
Yes there is a market based answer. It would involve making loans where the taxpayer is replaced as ultimate backer of loans with the banks and the home buyer. It would mean a little higher interest rate, higher down payment requirements and a resultant longer recovery in the building industry. Those things are not pleasant, but it would put everyone on a much surer footing.
The banks don't want the risk. How do accomplish your answer?
Banks will take the risk with the higher down payment.
How selfish soever man may be supposed, there are evidently some principles in his nature which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it. Adam Smith
True. How does the market convince banks to do the same for conforming loans? Now the banks can simply sell off the loans and live of lending fees. How does the market change this business model?
How selfish soever man may be supposed, there are evidently some principles in his nature which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it. Adam Smith
True. How does the market convince banks to do the same for conforming loans? Now the banks can simply sell off the loans and live of lending fees. How does the market change this business model?
Shut down Freddie and Fannie to give taxpayers a break and the market will take care of itself.
True. How does the market convince banks to do the same for conforming loans? Now the banks can simply sell off the loans and live of lending fees. How does the market change this business model?
Shut down Freddie and Fannie to give taxpayers a break and the market will take care of itself.
Right, right.
Not like there has ever been any crashes or panics in our economy before Freddie and Fannie.
How selfish soever man may be supposed, there are evidently some principles in his nature which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it. Adam Smith
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