What needs to happen now is to allow the demise of non-viable companies. Stat. No bailouts. No purchase of common or preferred stock. If they can’t make it, they go into bankruptcy. Certainly, the government can help facilitate a soft landing (i.e. controlled bankruptcy) but if these publicly traded companies can’t make it, they need to die. The only cure for a depression is a depression and we can’t avoid a depression at this point. Government involving itself in the private sector is only prolonging the inevitable (as we’re seeing with GM and the Obama administration suggesting bankruptcy now).

My argument is not hollow and it’s not an easy argument to make.

part of the issue is that because of the bailouts of both the auto makers and the financial services industries, the government is becoming a significant shareholder, if not, the majority shareholder. The government would be negligent if they didn’t address management competency just like any private entity who is a stockholder in a company. Your arguments ring hollow methinks.

So no one blinks an eye when union contracts are forced to be renegotiated or just plain broken, but when the gov comes down hard on executives who are asking for handouts are asked to do the same for the managerial class, then there’s a problem?

Nope. I’m coming down on the government getting involved in a private matter, regardless of whether the merit of the action is true or false. It’s a procedural flaw that will have widespread economic ramifications.

If the government forces union renegotiation in the same manner that they did with Rick Wagoner’s forced resignation, I would have a problem with that too.

Okay. That’s out of my system…

Part of the problem of with the SEC is that it has been so decimated over the past 28 years. And I am including the Clinton administration in this. for years we’ve had politicians who rail against the inefficiency of government, get elected on that premise, and then prove it. Namely, take a look at the Graham-Leach-Bliley Act and it’s effects on the financial industries. For instance, tell me what regulator oversees AIG, why they oversee what is primarily an insurance company, and what it’s staffing is like. Once you’ve done that, you may have a better idea of how much deregulation and “letting the market settle itself” has completely fucked us.

GM has been emblematic of the problem as well in the same stream of thought. Rather than advocating for universal health care, which would almost eliminate their legacy costs, especially compared to Toyota and Honda, where the majority of their already retired workers are covered by their respective countries national heath care system. Furthermore, GM fought tooth and nail the idea of fuel efficient cars such as hybrids, EV, and the like for decades. GM fought seat belts, fought airbags, fought safety glass because they would “increase the cost of the car”, but instead has saved millions of lives and perhaps billions of $$$ in injuries related to accidents. They say that they are following what the market wants, but still spend a ton of cash on advertising promoting the idea of taking your bug suv out to remote wilderness to camp. and I would say that advertising is probably the more influential factor there. See Douglas Rushkoff. If you don’t have any of his material handy, check out this: http://www.pbs.org/wgbh/pages/frontline/shows/persuaders/view/

I agree a bad precedent was set here. GM should have been allowed to go under – that’s business. If you can’t stay viable you die, your workers and managers move on, other businesses are started, life goes on.

I’m not.

Former IMF chief economist Simon Johnson said this in so many words about 10 hours ago on NPR’s “On Point” program–namely, that America’s bankers are an influential oligopoly: http://www.onpointradio.org/shows/2009/03/are-the-banks-running-america/ and that it will take a l-o-n-g time to change the system.

I understand that there are heartwrenching economic consequences to letting these big automakers fail, but the ramifications you mention are exactly why these bailouts were an ill-conceived idea. I agree wholeheartedly with your objections.

I was on the phone with a Silicon Valley, dyed-in-the-wool Obama supporter last night – lifelong Democrat coming from a family of folks who’ve been Democrats since they emmigrated to America to escape the holocaust.

The ham-handed, establishment-preserving solutions of the Obama administration have actually caused him to utter the words: “I’m considering switching to the Republican Party.”