Sorry RM. The government should have stayed out. The government 'saved' the companies to 'save' their precious union votes. Nothing more. They then turned around and cut dealers - who are, of course, non-union.

 

But here is the main point - there is no real reason for a mass closing of dealerships. The marketplace did not dictate this mass closing - the centralized car zsar did. Some dealers probably would struggle and go under - given the times that is certain. But most would survive and be fine. Instead a centralized government using Soviet-era style economic practices is dictating who makes it .... and who does not.

I'm afraid I'm missing your point. Unions don't sell cars, dealerships do. You need dealerships to sell cars for the Union members that make them. However, it makes no sense to retain dealerships that cannot move inventory and cannot support themselves. That's just not good business. Dealerships (of all foreign and domestic makers) are falling by the wayside daily, as it is, and there are many not paying their bills.

 

I agree, the government should not have stepped in, but this has nothing to do with the Unions and would have happened with or without the government loan. By the automakers requesting and receiving the loan, they made the government investors and as such gave the government a controlling interest in the company. This is on Chrysler and GM. As much as I hate this situation, I see no effort by the current Administration to perpetuate it. The previous one set this whole thing in motion. Remember, GWB had a veto stamp.

Blame GM, not the government. The investment was going south before the government got involved. You might have considered dumping it when you saw where it was headed, instead of holding onto it think the government was going to save it. Or, you can suck it up, hold onto it and wait for it to grow. But I doubt it will ever reach previous levels.

Not stocks RM.. I took a hit on the bond issue when Obama and the union took over and squeezed out the 10% ownership of the bond holders...

As much as I hate this situation, I see no effort by the current Administration to perpetuate it. The previous one set this whole thing in motion. Remember, GWB had a veto stamp.

 

GWB gets no free pass. His guys concept of 'to big to fail' and the TARP are creations of that era. Now this administration is using these as mechanisms venture where it should not.

 

Here is a great article by George Will on the subject.

 

http://www.daytondailynews.com/opinion/columnists/george-will-tarp-stimulus-money-amount-to-executive-branch-slush-fund-118219.html

 

The administration’s central activity — the political allocation of wealth and opportunity — is not merely susceptible to corruption, it is corruption.

Edited May 15, 200917 yr by Bluegrasscard
correct George Will name

I guess you did not read my post. I said that the lenders bear some of the responsibility, but the person asking for the money and agreeing to the terms of the deal should bear the lions share. Over regulation will still not change stupid.

This point is very arguable. It is not humanly practicable to protect yourself in today's society.

 

Should you understand your loan? Yes you should, however you are probably not as knowledgeable about the lending industry as the creditors. It is both impossible and unreasonable for you be an expert on every subject. It makes a great deal more sense for the distributors goods and services to be regulated by areas of government that can be specifically knowledgeable on these areas than ask every American to be knowledgeable on every subject.

 

What is a more reasonable solution to the problem? Make all Americans smarter, or Allow the experts to restrict bad practices? Sure it would be great if we could all be smart enough to know better but it is only wishful thinking.

This point is very arguable. It is not humanly practicable to protect yourself in today's society.

 

Should you understand your loan? Yes you should, however you are probably not as knowledgeable about the lending industry as the creditors. It is both impossible and unreasonable for you be an expert on every subject. It makes a great deal more sense for the distributors goods and services to be regulated by areas of government that can be specifically knowledgeable on these areas than ask every American to be knowledgeable on every subject.

 

What is a more reasonable solution to the problem? Make all Americans smarter, or Allow the experts to restrict bad practices? Sure it would be great if we could all be smart enough to know better but it is only wishful thinking.

 

I completely disagree with what is in bold.

 

That is the problem with most on the left, they assume that people are unable/not smart enough to know what is best for them and that the government can do a better job of deciding on what is best. I disagree with that premise on all counts. The large majority of individuals can better decide what is best for them, not a bunch of clowns in D.C.

 

It is less reasonable to take more tax dollars out of everyones pockets to employ more government regulators. I guess with your opinion of Americans knowledge that we should have a government regulator with each of us for trips to Wal-Mart so he/she can do a cost benefit analysis on a purchase of paper towels vs. a shamwow...:idunno: Maybe shamwows is not an apples to apples comparison (prememptive strike on that argument). Do you need a government regulator with you to tell you what is the best car to purchase for you? All this without going into the economics of how additional unneccesary barriers to access to capital such as your additional regulators will harm everyone (especially creditworthy borrowers) through higher costs.

 

Sorry, not buying it... The person who was seeking the money and now can not afford to pay it back should bear the majority of the responsibility of the mistake. Sorry I am not blaming the butcher for the person biting off more steak than he/she can chew.

 

You do not have to be an expert to realize that if you are not in a fixed loan, that if interest rates rise, your bill will increase.

The large majority of individuals can better decide what is best for them, not a bunch of clowns in D.C.

Then how did we get into this mess. Your logic makes no sense. You say that

A. The reason we got into this mess was because of the stupidity of people. But that there should be no regulation because

B. People are smart enough not to need regulations.

 

These two thoughts can't really coexist.

Maybe YOU didn't need the regulation but the impact sure as heck effected you and everyone else I know.

This point is very arguable. It is not humanly practicable to protect yourself in today's society.

 

Should you understand your loan? Yes you should, however you are probably not as knowledgeable about the lending industry as the creditors. It is both impossible and unreasonable for you be an expert on every subject. It makes a great deal more sense for the distributors goods and services to be regulated by areas of government that can be specifically knowledgeable on these areas than ask every American to be knowledgeable on every subject.

 

What is a more reasonable solution to the problem? Make all Americans smarter, or Allow the experts to restrict bad practices? Sure it would be great if we could all be smart enough to know better but it is only wishful thinking.

 

Should you suffer the consequences for not understanding your loan? Yes you should. Should the taxpayers pay for your mistake? No they shouldn't.

 

A few cycles of letting people fail (personal responsibility) will take care of the need for regulators restricting bad practices.

 

It's very simple when it comes to housing. If you don't understand that $1000 can't purchase a $1500 item, that should disqualify you from borrowing money. If the bank DOES loans you money, it's their baby, not the taxpayer's

Then how did we get into this mess. Your logic makes no sense. You say that

A. The reason we got into this mess was because of the stupidity of people. But that there should be no regulation because

B. People are smart enough not to need regulations.

 

These two thoughts can't really coexist.

Maybe YOU didn't need the regulation but the impact sure as heck effected you and everyone else I know.

 

Econ 101. Economic cycles are boom and bust. More regulation will not change that, it is a byproduct of the capitalist system. Unfortunate, maybe. But it is a far better system than anything else I have seen before.

Should you suffer the consequences for not understanding your loan? Yes you should. Should the taxpayers pay for your mistake? No they shouldn't.

But we all pay regardless of "should's". The collapse of the credit industry hurt all of us. We are all intertwined in this economy. What Jim does effects Bob.

 

What good is it for the stupidity of some to have the power to breakdown the system for all of us. Regulation is a tool to prevent that, and had it not been rolled away, it could have prevented the crises.

Econ 101. Economic cycles are boom and bust. More regulation will not change that, it is a byproduct of the capitalist system. Unfortunate, maybe. But it is a far better system than anything else I have seen before.

We have been manipulating booms and bust for years now, and yes regulation has played a large roll in that.

We have been manipulating booms and bust for years now, and yes regulation has played a large roll in that.

 

They will continue to happen regardless of additional regulation. In the mean time, I would rather keep more of my hard earned dollars in my pocket rather than pay more bureaucrats to create more red tape.

Blame GM, not the government. The investment was going south before the government got involved. You might have considered dumping it when you saw where it was headed, instead of holding onto it think the government was going to save it. Or, you can suck it up, hold onto it and wait for it to grow. But I doubt it will ever reach previous levels.

 

What's the cut off line in Obama's administration between the get out of jail free card vs. having to suck it up?

 

Just curious.

For those who point to the "boom-bust" cycle- and perhaps this is off-topic- but does anyone else ever think that the Federal Reserve's artificial manipulation of interest rates- which should be the economy's natural way of adjusting to changes in production- has a lot to do with it?

For those who point to the "boom-bust" cycle- and perhaps this is off-topic- but does anyone else ever think that the Federal Reserve's artificial manipulation of interest rates- which should be the economy's natural way of adjusting to changes in production- has a lot to do with it?

 

No doubt that raising or decreasing the fed funds rate is a factor in access to capital and does effect the economic cycle. It is an extremely difficult balancing act that the fed attempts to play and sometimes they do get monetary policy wrong. It is a job I sure would not want. They are trying to weigh dozens of variables in an equation to come to a sound decision.

 

Because of the inherent difficulty of coming to a sound decision, my hands off approach wishes they would do just as you say and stay away from changes and let the economy work through changes in production/economic cycle.

But we all pay regardless of "should's". The collapse of the credit industry hurt all of us. We are all intertwined in this economy. What Jim does effects Bob.

 

What good is it for the stupidity of some to have the power to breakdown the system for all of us. Regulation is a tool to prevent that, and had it not been rolled away, it could have prevented the crises.

 

 

It may seem cold to some, but here's how I look at it.

 

In the business world the BEST bankers, automakers, retailers etc thrive. The same should apply to citizens in the United States. You get what you work for so to speak. Please exclude anyone not capable, that's not who I'm talking about.

 

The banks/lenders and any other industry that can't survive due to bad decisions or bad economies must fail, it's imperative that they do so our capitalist society can thrive. "Regulation" is not needed to weed them out, the market will take care of it if allowed.

 

If we get trapped in this regulating, bailing out and propping up of sub par companies we're in trouble, we will build a society of underachievers.