So I was wrong, it seems...

[bhsup]

News I heard last night of GM's fantastic profits for the last quarter and year prompted me to look at TARP results so far. At least according to the Wiki article on it ( http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program ), it's been a resounding success overall. Yes, some big losses here and there, but compared to keeping the entire country from tanking I guess that's a reasonable payoff.

My visceral reaction initally back in 2008/2009 of "let them fall, let it all crash and we'll rebuild without the added government debt"...well, let's just say Thank God I wasn't in charge.

Things like the government selling its share of Chrysler at a 1.6 BILLION DOLLAR LOSS to Fiat kinda still piss me off, but overall I have to admit I was so wrong and it's turning out pretty well. I'm incredibly impressed with the rate of bank paybacks and the auto paybacks.

Anyhoo, what about you others out there that also were opposed to it? Do you still think it was wrong as well, or have you changed your minds as well?

 

[Quackers]

Well Chrysler failed!

 

[Zelig]

I never thought it was wrong, but there should have been regulations to prevent the situation from happening in the first place - and as far as I can tell, there are still no such regulations in place.

 

[bhsup]

Well, I'm no economist. This is just a layman's reactions (both then and now).

 

[downtown]

To be honest, I was kind of opposed to it at first too....but then I spent a good year and a half working closely with the American auto industry....first doing political work for the UAW, and then spending about a year doing recruiting work for Chrysler.

Looking back now, I think that letting them go bankrupt would have obliterated multiple industries/towns across the midwest, and would have really threatened the position of Ford as well. The Economist seems to think that in retrospect, allowing a regular bankruptcy would have resulted in Chrysler and GM getting liquidated, which would be bad for nearly everybody.

I'm glad it's worked out so far. It's a critical part of our economy.

 

[Murky]

It's good that it worked out. I wonder why they aren't stepping up to save green tech companies from bankruptcy like they did with the auto industry.

 

[bhsup]

Not too big to fail would be my guess.

 

[downtown]

It's good that it worked out. I wonder why they aren't stepping up to save green tech companies from bankruptcy like they did with the auto industry.

Yeah, they aren't nearly as important.

 

[Kozmos]

In the short-term perhaps, but sacrificing R&D is never prudent.

 

[rugbyLEAGUEfan]

It's great news here aswell . GM owns Holden , Australia's biggest car manufacturer and an iconic brand name . If GM pulled the pin , in the absence of a savior the repercussions would have been huge .

 

[Leoreth]

I recently heard that GM enacted massive wage cuts since 2008. So yes, GM is doing well, its employees, not so much.

 

[Disgustipated]

I actually supported the bailouts. Even though I didn't trust Bush at all, his economic advisers seemed pretty sound. I figured we'd get most of the money back, and the rest of the money is the price of being in a recession.

I still believe in stimulus packages in a recession, the problem is we don't have much margin to borrow money on. I'd rather the government build up a surplus during the good times, and save the money for a rainy day like the past two years. But no, the stupid idiots had to spend everything, including money we don't have.

 

[Cutlass]

If GM and Chrysler had failed, the US would have been out of the auto industry. Not a couple of companies, every company. The whole industry.

Why? Because all of the secondary companies that the industry relies on would have folded as well. And that would have forced Ford out of business. And Honda and Toyota and the rest would have had to close their US operations.

There really was no choice on the matter.

 

[cardgame]

I had no real opinion when it happened, but since the success is so apparent I'm very shocked to still hear people saying, "yadda yadda yadda, stupid bailouts, no more bailouts, they were horrible"

 

[RobAnybody]

Anyhoo, what about you others out there that also were opposed to it? Do you still think it was wrong as well, or have you changed your minds as well?

I was against the bailouts at the time, as well, but have changed my mind. I didn't understand just how bad things were, although I kind of understand why they didn't tell us how bad things were at the time. The HBO movie Too Big To Fail did a really good job of explaining what happened. Eric Forman from That 70's Show broke it down in layman's terms:

http://www.youtube.com/watch?v=Aqf97p1Rdm0

(warning, has a couple of HBO-level bad words, but it's a great, 3-minute-long explanation of the Great Crash of aught-eight)

 

[innonimatu]

I had no real opinion when it happened, but since the success is so apparent I'm very shocked to still hear people saying, "yadda yadda yadda, stupid bailouts, no more bailouts, they were horrible"

They were horrible. Not because the state intervened to protect an important part of the economy (I commented here at the time that the US not supporting GM would be foolish and destructive), but because of the way it did so. If it was "too big to fail" then it should be fully state-owned, and then kept that way. Otherwise you're socializing the losses and privatizing the profits.

 

[Cutlass]

The state doesn't need to hold ownership to avoid that. All it has to do is to declare that any and all bailouts automatically result in all stock declared null and void on the spot.

 

[Fr8monkey]

Guess it is only the banks who don't produce anything deserves a bail-out....

OH WAIT! The Auto industry got a LOAN!!

 

[Tarquelne]

Otherwise you're socializing the losses and privatizing the profits. ...

The state doesn't need to hold ownership to avoid that.

Random - or just mass - executions among high level management could work, too.

It'd be totally unconstitutional, and well... all in all an atrocious thing to do. But at least it wouldn't be socialism.

 

[wilycoyote]

They were horrible. Not because the state intervened to protect an important part of the economy (I commented here at the time that the US not supporting GM would be foolish and destructive), but because of the way it did so. If it was "too big to fail" then it should be fully state-owned, and then kept that way. Otherwise you're socializing the losses and privatizing the profits.

Or just have the company pay back the losses... certainly no need for the government to nationalize an industry it has no business being in.