Guess what? GM's restructuring worked

[Bonestorm]

I and the reason article I linked mentioned the uncertainty in growth industries. They are not expanding due to uncertainty and some of them are considering leaving the country.

To the extent there is any uncertainty, it has nothing to do with the government. Consumer confidence is low, unemployment is high. Businesses aren't expanding because there is no foreseeable significant increase in demand. Period.

I watched the Reason video. That guy is a total jackass. It's no wonder his CEO series consisted of only three interviews after he was on the video claiming that CEOs were afraid to speak because the boogeyman would get them. And I couldn't stomach the whole thing but in the first five minutes "uncertainty" was not mentioned once.

The companies that he mentioned as considering leaving the country are medical device manufacturers that are upset with the excise tax on medical devices contained in the Affordable Care Act. The problem is that moving to another country isn't going to do anything about the excise tax since it is based on sales in the United States. If they want to sell stuff in the U.S. market, regardless of where they are located, they tax will apply.

Moreover, it's a bit short-sighted for medical device manufacturers to bitch about the tax when the effect of the bill will be an expansion of the market for their goods as more people will have insurance and will be able to afford to buy their shit. But most importantly, this isn't uncertainty. The tax is 100% certain. They just don't like it, which is understandable, but it doesn't make anything "uncertain."

 

[Socrtease]

why would they. there goal is for everyone to be living even. Its not fair that some went to college and worked hard and saved. Wasn't the poor mans fault that they did nothing with there lives and spent to much money.

Well what is wrong with "From each according to his ability. To each according to his needs." I mean really, should a neurosurgeon really make that much more than an automechanic? They both just "get under the hood" and fix things.

 

[Cancel 2016.2]

I think I've probably been the only honest one on the thread.

I said I favored the GM bailout from a risk management perspective. Not because I knew with certainty what would happen. I just think there was more downside to having america's largest manufacturer crater, than to give them a loan which costs the taxpayer nothing. Didn't GM already pay it back with interest?

In contrast, Having scanned this thread, I see a lot of dudes making proclamations (aka, guesses) couched in absolute certainty and rock solid conviction about what would have happened.

While I agree GM needed to be bailed out, it was the manner in which it was bailed out that presents the problem. For the government to favor some shareholders over others is nothing more than complete bullshit. In NO way should the unions have come out with ownership in the new company when other shareholders were left holding the bag.

Also... for this to 'work'.... the money the government gets from selling their GM stock needs to go straight to paying down the country's debt.

Anyone else wonder why all the TARP money that was 'paid back' suddenly disappeared? Where did it go? Why did the debt not decrease? What are they using that money for?

 

[Cancel 2016.2]

To the extent there is any uncertainty, it has nothing to do with the government. Consumer confidence is low, unemployment is high. Businesses aren't expanding because there is no foreseeable significant increase in demand. Period.

I watched the Reason video. That guy is a total jackass. It's no wonder his CEO series consisted of only three interviews after he was on the video claiming that CEOs were afraid to speak because the boogeyman would get them. And I couldn't stomach the whole thing but in the first five minutes "uncertainty" was not mentioned once.

The companies that he mentioned as considering leaving the country are medical device manufacturers that are upset with the excise tax on medical devices contained in the Affordable Care Act. The problem is that moving to another country isn't going to do anything about the excise tax since it is based on sales in the United States. If they want to sell stuff in the U.S. market, regardless of where they are located, they tax will apply.

Moreover, it's a bit short-sighted for medical device manufacturers to bitch about the tax when the effect of the bill will be an expansion of the market for their goods as more people will have insurance and will be able to afford to buy their shit. But most importantly, this isn't uncertainty. The tax is 100% certain. They just don't like it, which is understandable, but it doesn't make anything "uncertain."

you are 100% incorrect on that. The government is most certainly causing the uncertainty. The anti-business policies and attitude emanating from DC are most certainly causing businesses to pause (at best) with plans for expansion or growth.

As for the medical device companies, you are right, it doesn't matter if they move out of country. They will simply have to raise their prices to accommodate the moronic tax. A tax that will be passed on to consumers via higher medical costs. Great job Obama!

 

[Bonestorm]

you are 100% incorrect on that. The government is most certainly causing the uncertainty. The anti-business policies and attitude emanating from DC are most certainly causing businesses to pause (at best) with plans for expansion or growth.

What specific "anti-business" policies are causing the uncertainty and uncertainty about what exactly?

As for the medical device companies, you are right, it doesn't matter if they move out of country. They will simply have to raise their prices to accommodate the moronic tax. A tax that will be passed on to consumers via higher medical costs. Great job Obama!

Or, alternatively, with more people having health insurance and access to heathcare more people will purchase medical devices which may very well lead to increased profits notwithstanding the tax. No?

 

[Timshel]

LOL

Guess you haven't really been reading the thread.

I've addressed that point time & again. You're both in economic fantasyland. According to you & RString, it doesn't matter if any huge segment of American industry tanks & 10's of thousands lose their jobs; they'll just get hired right back up again by other American companies.

How dreamy...

Where did you address that?

They were headed towards bankruptcy before the bailout. Now, I am sure the bailout money eased the restructuring process. But with that many assets and revenue streams, they were not at all likely to fold up entirely.

They may have come out with fewer than the 54900 US jobs that remain without the bailout. But to pretend it would be zero is just fear mongering.

So the truth is that the 34 billion saved less than 54900. Out of those some percentage WOULD have been picked up by surging demand for competitors. So 34 billion saved a fraction of a fraction of the 54900 jobs. We likely paid well over a million dollars, maybe over 2 million, for each of the jobs "saved."

 

[Onceler]

Where did you address that?

They were headed towards bankruptcy before the bailout. Now, I am sure the bailout money eased the restructuring process. But with that many assets and revenue streams, they were not at all likely to fold up entirely.

They may have come out with fewer than the 54900 US jobs that remain without the bailout. But to pretend it would be zero is just fear mongering.

So the truth is that the 34 billion saved less than 54900. Out of those some percentage WOULD have been picked up by surging demand for competitors. So 34 billion saved a fraction of a fraction of the 54900 jobs. We likely paid well over a million dollars, maybe over 2 million, for each of the jobs "saved."

First - I've been addressing it the whole thread. It is fantasy to think that American jobs lost will just be picked up by another American company, especially in the auto industry.

It's misleading to suggest that $34 billion saved less than 54,900. It creates an impression that you have absolutely no clue what the ramifications would have been to the overall economy & taxpayers in general, and I'm sure you do. The economy (and taxpayers by extension) lost trillions between the time of the crash & early 2009.

It would have lost exponentially more than the $34 billion if nothing was done at that time. That isn't even speculation; to deny that is just plain silly.

 

[Cancel 2016.2]

What specific "anti-business" policies are causing the uncertainty and uncertainty about what exactly?

You have to be kidding....

Just ask the small business owner how much it will cost to file endless tax forms for every vendor they spend $600 or more with in a given year.

Then take a look at the ever soaring national debt... businesses know that there are only three ways to counter the insanity:

1) The US defaults on its debt

2) The politicians in DC actually CUT spending

3) The politicians in DC raise taxes

Next take a look at the health care monstrosity... do you think this bill is designed to help businesses? Go ahead and look at the financial regulation bill as well... because that is not going to do anything but insert more bureaucracy into the industry, while doing nothing to loosen credit to small businesses (who are the life blood of job creation)

Or, alternatively, with more people having health insurance and access to heathcare more people will purchase medical devices which may very well lead to increased profits notwithstanding the tax. No?

That has NOTHING to do with the costs to consumers. You make a wild assumption that the government is just going to let anyone and everyone have these devices. This is where rationing will come in. You will need to get Uncle Sams approval for any device. But I know... you don't believe the government will actually ration services and products at all. Everyone will just get everything they need... right?

 

[Bonestorm]

You have to be kidding....

Just ask the small business owner how much it will cost to file endless tax forms for every vendor they spend $600 or more with in a given year.

Then take a look at the ever soaring national debt... businesses know that there are only three ways to counter the insanity:

1) The US defaults on its debt

2) The politicians in DC actually CUT spending

3) The politicians in DC raise taxes

Next take a look at the health care monstrosity... do you think this bill is designed to help businesses? Go ahead and look at the financial regulation bill as well... because that is not going to do anything but insert more bureaucracy into the industry, while doing nothing to loosen credit to small businesses (who are the life blood of job creation)

If there were actually any concern about the United States defaulting on its debt, rates wouldn't be at historical low levels. Get real.

And you're just complaining about policies that you don't like. Basically, according to your position any time Congress passes any law that does anything that might affect businesses, it creates crippling uncertainty so businesses decide not to invest and grow. The obvious reason for whatever "uncertainty" exists is high unemployment and low consumer confidence creating low demand.

And you aren't explaining how the laws enacted have created uncertainty about anything at all. The healthcare bill doesn't go into effect for a number of years. To the extent anything is uncertain about it, businesses have plenty of time to figure things out.

That has NOTHING to do with the costs to consumers. You make a wild assumption that the government is just going to let anyone and everyone have these devices. This is where rationing will come in. You will need to get Uncle Sams approval for any device. But I know... you don't believe the government will actually ration services and products at all. Everyone will just get everything they need... right?

Off . . . the . . . deep . . . end.

 

[Timshel]

To the extent there is any uncertainty, it has nothing to do with the government. Consumer confidence is low, unemployment is high. Businesses aren't expanding because there is no foreseeable significant increase in demand. Period.

You are just evading the point/facts and restating your assertion. The interview was of business owners/leaders in industries that are GROWING. Their demand IS increasing.

I watched the Reason video. That guy is a total jackass. It's no wonder his CEO series consisted of only three interviews after he was on the video claiming that CEOs were afraid to speak because the boogeyman would get them. And I couldn't stomach the whole thing but in the first five minutes "uncertainty" was not mentioned once.

That's great. You don't listen to anything unless you like the person and they tell you want to hear. That's good to know.

The entire interview discussed uncertainty in market conditions created by government intervention. Were you looking for the exact word? That comes in around 8:30 in.

I also linked a story on Cisco's CEO talking about "unusual uncertainty" in the market.

The companies that he mentioned as considering leaving the country are medical device manufacturers that are upset with the excise tax on medical devices contained in the Affordable Care Act. The problem is that moving to another country isn't going to do anything about the excise tax since it is based on sales in the United States. If they want to sell stuff in the U.S. market, regardless of where they are located, they tax will apply.

Moreover, it's a bit short-sighted for medical device manufacturers to bitch about the tax when the effect of the bill will be an expansion of the market for their goods as more people will have insurance and will be able to afford to buy their shit. But most importantly, this isn't uncertainty. The tax is 100% certain. They just don't like it, which is understandable, but it doesn't make anything "uncertain."

So says you. You know their business so much better than the CEO's do it's a wonder you are not running all 3 of them and a couple more. The fact is that no one really knows what the effects will be, including those you mention that could be positive. They are uncertain.

It was not just about the tax on medical devices. They mentioned several other factors including what may come, which Calle said was probably the concern he heard stressed most often.

 

[Sammy Jankis]

To the extent there is any uncertainty, it has nothing to do with the government. Consumer confidence is low, unemployment is high. Businesses aren't expanding because there is no foreseeable significant increase in demand. Period.

I watched the Reason video. That guy is a total jackass. It's no wonder his CEO series consisted of only three interviews after he was on the video claiming that CEOs were afraid to speak because the boogeyman would get them. And I couldn't stomach the whole thing but in the first five minutes "uncertainty" was not mentioned once.

The companies that he mentioned as considering leaving the country are medical device manufacturers that are upset with the excise tax on medical devices contained in the Affordable Care Act. The problem is that moving to another country isn't going to do anything about the excise tax since it is based on sales in the United States. If they want to sell stuff in the U.S. market, regardless of where they are located, they tax will apply.

Moreover, it's a bit short-sighted for medical device manufacturers to bitch about the tax when the effect of the bill will be an expansion of the market for their goods as more people will have insurance and will be able to afford to buy their shit. But most importantly, this isn't uncertainty. The tax is 100% certain. They just don't like it, which is understandable, but it doesn't make anything "uncertain."

The unpredicatability comes in because you never know which company is going to get bailed out. And all the people who are in the know of what's GOING TO HAPPEN have an unfair advantage. Hence the path to the most wealth just becomes about vying for your position in the cronyism hierarchy.

 

[Cancel 2016.2]

If there were actually any concern about the United States defaulting on its debt, rates wouldn't be at historical low levels. Get real.

You need to learn to comprehend what you read. As I stated, there are three ways for the US to lower its debt burden. Only ONE of the ways I mentioned was default. I also did not state that we are anywhere near defaulting. I said it was an OPTION. The point of providing the three options was to show you the most likely route. Defaulting is not the most likely.

Given that spending has increased every years since 1965, the odds of spending cuts relieving the debt load are also not high.

That leaves us with which option?

Tax increases.

THIS is what is causing the uncertainty.

And you're just complaining about policies that you don't like. Basically, according to your position any time Congress passes any law that does anything that might affect businesses, it creates crippling uncertainty so businesses decide not to invest and grow. The obvious reason for whatever "uncertainty" exists is high unemployment and low consumer confidence creating low demand.

off ... the... deep .... end

 

[Damocles]

What specific uncertainty is Obama creating? Uncertainty about what? How is he doing that? Mucking around with what exactly?

What uncertainty? Are businesses able to plan around the new taxes that will happen if tax breaks are sundowned.. maybe they'll hold a bit of that cash? Are businesses able to plan around the cost of Obamacare, or as they hope will that be fixed? Are they going to be forced to buy tens of thousands of dollars of product that they don't want to buy or can't afford at this moment if they hire people? Maybe some solar panels... Will they have to pay extra taxes on energy?

Uncertainty? Which economic uncertainty isn't he making?

 

[Bonestorm]

You are just evading the point/facts and restating your assertion. The interview was of business owners/leaders in industries that are GROWING. Their demand IS increasing.

That's great. You don't listen to anything unless you like the person and they tell you want to hear. That's good to know.

The entire interview discussed uncertainty in market conditions created by government intervention. Were you looking for the exact word? That comes in around 8:30 in.

I gave it a shot, but I couldn't stomach it after the "government boogeyman" stuff. Seriously. "People are scared to say anything mean about the government because they think they'll be punished by the bureaucrats." What a load of shit.

And if "uncertainty" were the main point of the piece, you'd think they'd get talk about it at least once in the first five minutes. Instead, it was a lament about very concrete and certain things that the businesses didn't like, taxes.

I also linked a story on Cisco's CEO talking about "unusual uncertainty" in the market.

No one disputes that there is uncertainty in the market. What is being debated is the cause of the uncertainty. I'm pointing to same fairly basic economic factors that have a direct impact on economic growth in a consumer drive economy, unemployment and consumer confidence, and you just keep asserting that government is the problem. I think I have the better of the argument.

So says you. You know their business so much better than the CEO's do it's a wonder you are not running all 3 of them and a couple more. The fact is that no one really knows what the effects will be, including those you mention that could be positive. They are uncertain.

It was not just about the tax on medical devices. They mentioned several other factors including what may come, which Calle said was probably the concern he heard stressed most often.

People know quite well what the effects are likely to be. Businesses project these sorts of things all the time. If they cannot figure out what the likely effects will be they ought not be CEOs.

And the "concern about what may come" is a really convenient dodge, and you can buy it if you want, but don't expect everyone else to buy it, particularly when there are real, concrete economic explanations.

 

[Sammy Jankis]

Of course, you neocons are fixated on taxes only. What about not knowing if after you enter a market the government is gonna pick your competitor to become a "private/public partner". Isn't that a fine how do you do?

 

[Sammy Jankis]

I gave it a shot, but I couldn't stomach it after the "government boogeyman" stuff. Seriously. "People are scared to say anything mean about the government because they think they'll be punished by the bureaucrats." What a load of shit.

And if "uncertainty" were the main point of the piece, you'd think they'd get talk about it at least once in the first five minutes. Instead, it was a lament about very concrete and certain things that the businesses didn't like, taxes.




No one disputes that there is uncertainty in the market. What is being debated is the cause of the uncertainty. I'm pointing to same fairly basic economic factors that have a direct impact on economic growth in a consumer drive economy, unemployment and consumer confidence, and you just keep asserting that government is the problem. I think I have the better of the argument.




People know quite well what the effects are likely to be. Businesses project these sorts of things all the time. If they cannot figure out what the likely effects will be they ought not be CEOs.

And the "concern about what may come" is a really convenient dodge, and you can buy it if you want, but don't expect everyone else to buy it, particularly when there are real, concrete economic explanations.

But there is still the uncertainty about which company will picked to be americas brand. When you pick winners, competition is dead and the benefits of competition are lost in a monolith of oligarchy.

 

[Bonestorm]

What uncertainty? Are businesses able to plan around the new taxes that will happen if tax breaks are sundowned.. maybe they'll hold a bit of that cash?

The law is 100% perfectly crystal clear. The tax cuts end on a date certain.

Are businesses able to plan around the cost of Obamacare, or as they hope will that be fixed?

Again, the law is the law. There is nothing uncertain about it. There may be uncertainty created by people claiming to change the law, but that's not Obama's fault.

Are they going to be forced to buy tens of thousands of dollars of product that they don't want to buy or can't afford at this moment if they hire people? Maybe some solar panels... Will they have to pay extra taxes on energy?

I don't know what the first part refers to but there is no energy bill or energy tax. If they want solar panels, now is a good time to buy them with tax credits and all.

Uncertainty? Which economic uncertainty isn't he making?

This is really silly. Basically, any time the government does anything businesses are crippled with "uncertainty" and it's all the government's fault. It's hilarious.

Just ignore the fairly basic economic factors and blame government.

 

[Timshel]

First - I've been addressing it the whole thread. It is fantasy to think that American jobs lost will just be picked up by another American company, especially in the auto industry.

It's misleading to suggest that $34 billion saved less than 54,900. It creates an impression that you have absolutely no clue what the ramifications would have been to the overall economy & taxpayers in general, and I'm sure you do. The economy (and taxpayers by extension) lost trillions between the time of the crash & early 2009.

It would have lost exponentially more than the $34 billion if nothing was done at that time. That isn't even speculation; to deny that is just plain silly.

Bull-fucking-shit! You are speculating.

As far as the market's losses, that's all on paper and was a regression to the true market value as the junk assets were discarded. GM would have went through bankruptcy without the bailout and we'd be in pretty much the same place we are now, except with more money to deal with continuing unemployment.

 

[Jarod]

There is some economic uncertanty, but At least for this small business owner..... It likely will not affect me and if it does, that would be a good thing because it would mean I am making more than I expected.

 

[Onceler]

Bull-fucking-shit! You are speculating.

As far as the market's losses, that's all on paper and was a regression to the true market value as the junk assets were discarded. GM would have went through bankruptcy without the bailout and we'd be in pretty much the same place we are now, except with more money to deal with continuing unemployment.

Every single one of your claims has been pure speculation, so that claim is pretty ironic.

The difference is that your speculation is coming from somewhere in the clouds - a place where lost jobs magically reappear at American car companies, and those job losses exist in some weird bubble where no one else seems to be affected.

Mine is coming from real-world precedent, and the ripple effects we have seen time & again when very large companies have massive layoffs. When DHL domestic went under, there was a story about a whole town in OH that basically lost their livelihoods - retail, restaurants, services, the works.