The auto industry lives. Can we admit that government intervention worked?

Exactly. It helps to think about the domino effect an auto-industry collapse would have created compared to where we are now. I feel most people that are still against it merely look at the sensationalistic headlines (i.e. ""Lots of government money being spent to destroy private company!!!"") and don't think about the potential disaster that could have happened.

With globalization you would prefer to just sit back and let the others in the world kill off all of our industry because you have the false impression that lending a company money is socialization? Please do not run for office.

Magic of the Marketplace, LOL there is no such thing today you are stuck in the past.

logdump

Please note the "sarcasm" tag ending my comment!

No. Without the government loans (which have been repaid with interest and at a profit for the American people) General Motors would have collapsed and taken down thousands of relate companies and suppliers. Like the companies the supply the rubber tires, the companies that build the wiring harnesses, to those that sew the seat covers and the companies that supply them. Of course that doesn't even begin to take into account the countless grocery stores and restaurants and health care providers and utility companies, etc, that those workers utilize with their pay.

What the President did by loaning (and it was a loan, not a bail out or a buy out) was a brilliant decision to make and without any doubt at all, the right one to make. It was a bold step that saved millions of jobs. Millions!

Think bigger than that. Ford is just a whiny tiny still on the global stage scale.

The Spirit

Ford exists without taking a nickle of government money.

And more credit to them! That being said, that does not mean that standing as an island to the bitter end is the only legitimate solution to systemic problems. IF the auto industry, banks, insurers, et al had been 'small enough to fail,' allowing them to fail would have been a reasonable alternative, and I certainly favour busting them down in size. But as RDS points out in #4.1, in a massive, integrated business, the potential for a much more devastating chain-reaction was a real possibility. Conservatives don't seem to want to acknowledge complex systems, evidenced by their simplistic responses to this sort of economic disruption, their denial of ecological chain-effects, and their tendency to reduce all social and legal issues to black-or-white, either/or terms.

McSpocky

It wasn't just the auto industry that was saved. It was also all the businesses that support the auto industry. Unemployment would have been much worse than what it ended up being.

Perhaps some poetic license:

For want of a bailout, GM was lost;

For want of GM a job was lost;

for want of a job, a home was lost;

for want of a home, an education was lost,

for want of education, a job was lost,

for want of a job, health care was lost,

for want of health care, a life was lost -

thanks to the Party of NO!

No. Without the government loans (which have been repaid with interest and at a profit for the American people)

The American people have far from profited in this venture and it is unlikely we ever will. Of the nearly 50 billion dollars they recieved, most of that was for WE THE PEOPLE to purchase a 61% stake in the company, of which we will not see a return until the government sells our shares. It is unlikely that they will sell for what they paid for them, meaning, no profit, no return on OUR investment.

Of the 7 billion that actually was a loan, they repaid early to avoid interest, using federal aid money given to them for operating capital. GM them reborrowed the money, at a lower interest rate. Basically they repaid us using our own money. One big refinance scheme sort of like using your master card to pay your visa. It allowed them to SAY they repaid their loans, in reality, they have not.

It wasn't just the auto industry that was saved. It was also all the businesses that support the auto industry. Unemployment would have been much worse than what it ended up being.

You seem to be assuming potential GM customers would have simply decided to live without automobiles had GM ceased to exist. Those customers though would have went to other manufacturers, likely Ford or Dodge and since they share many of the same suppliers, it would be unlikely they would have seen a major shift. Some that might supply ONLY to GM may be hurt while others that supply to the rest may gain. Your prophecies of a large scale automotive supplier failure following a GM failure seem highly unlikely.

What we did manage to accomplish in all this is a muddying of bankruptcy laws. The government is supposed to be an overseer in bankruptcy proceedings, not a party to it. This was the kind of hostile takeover of a corporation by our government that Wall St. could only dream of. The court stretched the bankruptcy code beyond recognition usurping the rights of existing creditors. Many of those creditors being the ones who were 'saved' according to previous claims. Many of whom also opposed the sale in preference to a typical chapter 11 liquidation.

At the Moment that the decision had to be made concerning whether to step in and prevent the collapse of the American Auto Industry, Ford said they had @25 Billion, and felt they could weather the storm. They said no to fed assistance, and they were right to. GM only could see @10 or 12 Billion, at Best...they were likely going to Default on their short term debt, and end up cutting nearly all operations, and laying off many workers and shutting many plants. GM, as a Strong, Viable Manufacturing Corporation, would have Been Over. Chrysler's Situation was essentially the same as GM's.

GM appears to be on the road to recovery now, but it will take another year to be sure, especially in Chrysler's Case. If they come back All the Way, to regain the place the had before, it will All have been worth it, assuming we make a little interest on the deal. Since the tax payers were kind enough to help GM and Chrysler to survive, we Deserve to make a Profit. We'll have to see how that plays out.

This is not a case of seeing if the whole economy pulls out (though I believe it will). This is a question of if this particular intervention worked and there is not the slightest doubt that it did.

Amen, RDS, Amen! The right can't see the forest for the trees.

The President made a bold move to loan money to a huge company,

See here is the thing the right does not listen or chooses to forget anything that goes against their limited ability to think. During this period the stimulus Tarp and Auto bailout were all related to the fact the financial industry was without funds and could not lend money because they had none. Housing automobiles and big ticket items sales were suffering because money dried up. The President said the Federal Government was the only source of funds to tide us over until the banks got back on their feet and could lend. The right wing slanderers choose to gorget this small statement. They like to call it socialization but anyone with a brain just laughs at that. We do not own Ford. Or GM or Chrysler. Ford I believe did not borrow and the other two put up collateral to borrow money from the government. That is in no way socialization unless of course you are Beck or Limbaugh.

Ford benefited because they had backup and did very well. GM changed and is progressing nicely. Chrysler is foreign now and no longer an American company but seems to be doing well. And once again Obama say in your face to the right. Sooner or later voices of dissent will arise in the Republican party and begin the process of eliminating the Neanderthals who now run it. Then we can look forward to both parties working with the President instead of one pulling against him he is a winner and people do not like to be on the losing team for long.

Millions of Americans owe their jobs and futures to this President for his bold leadership in the face of a crisis that was thrust upon him by the rank and rampant corruption of the previous administration that governed ONLY in the interests of the already rich and who screwed the middle class and poor, in the interests of a sick and twisted ideology.

What a crock of bovine scatology. Nobody owes him ANYTHING.

GM and Chrysler could disappear tomorrow but the market for cars will not collapse, Americans will still buy cars and someone will fill the void. Doesn't matter if they say Dodge or Kia, they will still be built here in this country.

GM and Chrysler could disappear tomorrow but the market for cars will not collapse, Americans will still buy cars and someone will fill the void.

The ones that would fill the gap would be Japanese and Korean companies and no, most of them would not be built here. Some yes, but not many.

Please, name the 100% American product. GM, FORD, CHRYSLER, wind turbine, solar panels, etc... either underneath components or on the back and please tell me what does it say ?

It doesn't have to be an American brand as long as the model bought is made and sold in the U.S.A. The more of these models bought the more jobs that come to the US.

Ford, Gm, and DC sent 100s of thousands to Canada and Mexico. Not one of their cars are 100% American some are 40% most are 70%. Ford makes Jaguars, Land Rovers, Mazdas and Volvo all are 100% made outside the U.S. GM and DC also have foreign brands all 100% made outside the U.S.

Rhazes, don't get me wrong. I just want to look at the bigger picture and prove my point. For example Walmart is US corporation and fill their stores with product made from some place else and hire few thousand people and you are OK with that.

PWMan, thanks for unknowingly making my point: we need to buy products made by Americans, working for American owned companies. Although I never said 100% American content, that would be better yet.

Oh, well we should have just let the auto industry fail then. And after that, we would have seen the failure of all of the supporting economies that surrounded the auto industry.

But at least you righties wouldn't have had a sad about the deficit, wouldya?

What? These loans are secured. The 6.1 trillion Bush borrowed has to be paid back by our children

Exactly, we get this money back when the shares that we own are sold, it's called an investment. Remember when Rumsfeld assured us that Iraq would pay us back for the war? Where's that money?

The global economy is shakey, not just the US economy. Despite the heavy hand of government interventions in China raising it's economy, the Chinese economy is experiencing global tremors in its economy. There are sizable numbers of layoffs for the sake of profitability in China. Those layoffs get little or no press.

Due to continuing global economic instabilities, all we can talk about is where improvements have occured as of the article. None of us can predict any singular event that will send the global economy into a tailspin, although I wonder whether some wish for it in order to prove their points.

Obama haters aren't going to credit him for loaning money that's being paid back. Haters hang onto negative memes because it's great press as well as distracting political talking points. Still though, haters can hang onto the dismal unemployment numbers: that's real and continuing pain no matter how much GM improves.

You are a real man and an admirable real conservative, I guess ?

Really not sure what your getting at.... usually a libber on here.... middle of the road in real.

I am a real gay man..