Guess what? GM's restructuring worked

Onceler said:
You opposed the bailout, so you have to spin this way. It's BS.

The kind of "creative destruction" you're talking about with such ease would have put us in a Depression, and affected many more than simply those who work for GM.
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The only thing threatening a depression is Obama's mucking around and creating uncertainty.

Yes, it would have affected all of those who would be working for Ford, Toyota or some other car maker and those who would be working for the suppliers of Ford, Toyota or some other car maker, but are not now.

A major American business was saved. You're trying to diminish it with "well, they laid off 25% anyway," and "most of the jobs are international, anyway" doesn't change the fact that a great many jobs were saved HERE, in America, and that GM is back to profitiability, after predictions of doom from the bailout-opposers.
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The fact that GM is profitable again does not prove it was the right choice. You apparently have no clue what the complaints were about.
 
RStringfield said:
The fact that GM is profitable again does not prove it was the right choice. You apparently have no clue what the complaints were about.
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There were 2 branches of complaint. There was the "this won't work" branch, and the "let capitalism run it's course & let's have some creative desctruction" branch.

I thought the latter group were insane, personally. At the very least, they didn't know people who had jobs.
 
For the record, btw, I was pretty sure it would not work. I supported it as a stop-gap, just to keep GM from declaring bankruptcy in 2009. I thought that if they failed at that time, when the economy was at its most vulnerable, it would have pushed any potential recovery off by a matter of years.

I thought it was cheap compared to the alternative.
 
Onceler said:
There were 2 branches of complaint. There was the "this won't work" branch, and the "let capitalism run it's course & let's have some creative desctruction" branch.

I thought the latter group were insane, personally. At the very least, they didn't know people who had jobs.
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What is insane is rewarding and encouraging inefficient behavior. By socializing risky behavior you create a moral hazard. Those who behave in a way beneficial to society are impoverished to protect those that act in way is detrimental to society. The perverse incentives that are created spill out in concentric waves that are far more real than the residual effects you mention.

The effects you mention only change the name of catalyst from GM to Ford, Toyota or some other company and the net impact is actually beneficial in the long term as competence replaces incompetence.
 
RStringfield said:
What is insane is rewarding and encouraging inefficient behavior. By socializing risky behavior you create a moral hazard. Those who behave in a way beneficial to society are impoverished to protect those that act in way is detrimental to society. The perverse incentives that are created spill out in concentric waves that are far more real than the residual effects you mention.

The effects you mention only change the name of catalyst from GM to Ford, Toyota or some other company and the net impact is actually beneficial in the long term as competence replaces incompetence.
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But there was little moral hazard resulting from the GM bailout. Shareholders were crushed. Management was replaced. Bondholders took it in the ear.

You point about competitors taking up the slack in supply as a result of GM's failure is ok as a long-term, global proposition, but whether that would be beneficial in the long-term given the short-term impacts is certainly debatable.
 
RStringfield said:
The only thing threatening a depression is Obama's mucking around and creating uncertainty.

Yes, it would have affected all of those who would be working for Ford, Toyota or some other car maker and those who would be working for the suppliers of Ford, Toyota or some other car maker, but are not now.



The fact that GM is profitable again does not prove it was the right choice. You apparently have no clue what the complaints were about.
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What specific uncertainty is Obama creating? Uncertainty about what? How is he doing that? Mucking around with what exactly?
 
A good article, but regarding uncertainty by fiat:

http://online.wsj.com/article/SB10001424052748704164904575421231390302638.html

...Right now, businesses are investing to reduce costs for health care and employee benefits by increasing labor-saving capital. That maintains profits despite continued slow growth, but increases layoffs and unemployment. They see what the administration and Congress do, and they protect themselves as best they can.

Policy makers can reduce uncertainty about future costs by putting a moratorium on new regulation unless it is approved by a supermajority of Congress. Meanwhile, there has to be a recognition that bashing business and blaming the Bush administration for economic problems create less confidence about the future and are counterproductive. They do nothing to end high unemployment.
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Onceler said:
For the record, btw, I was pretty sure it would not work. I supported it as a stop-gap, just to keep GM from declaring bankruptcy in 2009. I thought that if they failed at that time, when the economy was at its most vulnerable, it would have pushed any potential recovery off by a matter of years.

I thought it was cheap compared to the alternative.
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Thats nonsense....GM customers would have, by necessity , turned to other auto manufactures for their cars and trucks, and those sales would, by necessity, have made those manufactures hire the apporpriate workers, etc. to meet those demands....
GM is nothing more than a black hole, money pit sucking up taxpayer money....
and a gift to the union scumbags that caused GM to come close to failure in the first place....
 
bravo said:
Thats nonsense....GM customers would have, by necessity , turned to other auto manufactures for their cars and trucks, and those sales would, by necessity, have made those manufactures hire the apporpriate workers, etc. to meet those demands....
GM is nothing more than a black hole, money pit sucking up taxpayer money....
and a gift to the union scumbags that caused GM to come close to failure in the first place....
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You sound like an infant when it comes to business matters.

They would have gone right to American manufacturers, would they?
 
Onceler said:
You sound like an infant when it comes to business matters.

They would have gone right to American manufacturers, would they?
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Why does he sound like an infant on business matters? I don't believe he claimed they'd have gone right to American manufacturers.
 
Annie said:
Why does he sound like an infant on business matters? I don't believe he claimed they'd have gone right to American manufacturers.
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You sound like an infant, too.

If he wasn't trying to imply that the workers that would be hired back were American, what is the point, Annie?

Clue up. Don't just defend righties because they're righties. Try to make sense.
 
Onceler said:
You sound like an infant, too.

If he wasn't trying to imply that the workers that would be hired back were American, what is the point, Annie?

Clue up. Don't just defend righties because they're righties. Try to make sense.
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Please, you 'clue up.' Your saying something isn't true, doesn't make it false. Prove something that you are asserting or allow that this discussion and pronouncements on 'saved and created' are just opinion or fairy tales.
 
Annie said:
Please, you 'clue up.' Your saying something isn't true, doesn't make it false. Prove something that you are asserting or allow that this discussion and pronouncements on 'saved and created' are just opinion or fairy tales.
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Whatever. If you think it's a fairy tale that we saved jobs by saving GM, you're not thinking.

Frankly, the reaction on this thread has been kind of stunning. This is a good news post. The same group that vehemently opposed this bailout & told us how it would destroy the country now shrug when they see that GM restructured as planned, and is back to profitability in little more than a year? "Oh, so they saved some jobs...big whoop."

It's amazing. What's next? If we're at 5% unemployment next year, are we going to get "So? Bush had it at 4.5%. Big whoop."

It's a tell. You'll never acknoweldge decent news under this Prez, because you're ideological.
 
Onceler said:
Whatever. If you think it's a fairy tale that we saved jobs by saving GM, you're not thinking.

Frankly, the reaction on this thread has been kind of stunning. This is a good news post. The same group that vehemently opposed this bailout & told us how it would destroy the country now shrug when they see that GM restructured as planned, and is back to profitability in little more than a year? "Oh, so they saved some jobs...big whoop."

It's amazing. What's next? If we're at 5% unemployment next year, are we going to get "So? Bush had it at 4.5%. Big whoop."

It's a tell. You'll never acknoweldge decent news under this Prez, because you're ideological.
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I've not expressed good or bad about the 'recovery of GM.' I'm glad folks that kept their jobs, did. I wish more did. My question from the beginning is the assumption that saving GM would help the economy. Those that lost their jobs, will they be able to recover? Will the long term costs of the bailout help or worsen the recovery?

You seem to assume because the government told you it was a good idea, it was. You assume that the long term benefits outweigh what may have happened without it.
 
Annie said:
I've not expressed good or bad about the 'recovery of GM.' I'm glad folks that kept their jobs, did. I wish more did. My question from the beginning is the assumption that saving GM would help the economy. Those that lost their jobs, will they be able to recover? Will the long term costs of the bailout help or worsen the recovery?

You seem to assume because the government told you it was a good idea, it was. You assume that the long term benefits outweigh what may have happened without it.
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The cost of the bailout was nothing; that was the cheapest bailout in terms of ROI that one could imagine.

If you don't understand that, you don't understand the math of what would have happened to the U.S. economy if GM failed, and how much more it would have cost taxpayers if that scenario had played out.
 
Onceler said:
The cost of the bailout was nothing; that was the cheapest bailout in terms of ROI that one could imagine.

If you don't understand that, you don't understand the math of what would have happened to the U.S. economy if GM failed, and how much more it would have cost taxpayers if that scenario had played out.
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Math based upon what? There are and were no hard numbers, just the expectation that all the administration fear mongered would come to pass. Funny how the same that accuse the past administration of fear mongering, have no problem with using it in this and other cases, with issues near and dear to their hearts.

Now remember, IF all the things were done, unemployment would be where? It's where? How was that report today? Speaking of naive.
 
Annie said:
Math based upon what? There are and were no hard numbers, just the expectation that all the administration fear mongered would come to pass. Funny how the same that accuse the past administration of fear mongering, have no problem with using it in this and other cases, with issues near and dear to their hearts.

Now remember, IF all the things were done, unemployment would be where? It's where? How was that report today? Speaking of naive.
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No "fear mongering" necessary w/ the failure of GM. Even most opponents of the bailout for them acknowledged that it would be a short-term disaster for the economy in terms of jobs lost & the market sinking much further than it did.

You act like it's a big mystery what would have happened. For people who understand economics & industry, it really isn't.

And you love those one-day snapshots when they are bad news. Unemployment is a continuing problem, but the idea that we'd be in a better place today without a restructured, profitable GM is pretty much crazy.
 
Onceler said:
No "fear mongering" necessary w/ the failure of GM. Even most opponents of the bailout for them acknowledged that it would be a short-term disaster for the economy in terms of jobs lost & the market sinking much further than it did.

You act like it's a big mystery what would have happened. For people who understand economics & industry, it really isn't.

And you love those one-day snapshots when they are bad news. Unemployment is a continuing problem, but the idea that we'd be in a better place today without a restructured, profitable GM is pretty much crazy.
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Other than the reference to today, it was hardly one day in the main. Short term good news is not most of us are looking for, today or tomorrow.

I'll give you the point that there was a stemming of blood with bailout, doesn't mean that it's a success, not even with the report. First we need to see how they do without the government as majority stockholder.
 
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