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Let Detroit Go Bankrupt

nytimes.com

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Re: Let Detroit Go Bankrupt

#51

Post by yummyfajitas »

mattmaroon wrote: post #48
yummyfajitas wrote: post #27

Earlier quoted context omitted.

Person A, a waitress at Dennys, making about $8-10/hour with high deductible health care. Person B, an auto worker at GM, making $30-40/hour with zero deductible health care. [edit: see response to this post, auto worker gets $73/hour.] The bailout: tax person A in order to help person B, with 3 large corporations taking a cut of the proceeds. Does this make any sense? Incidentally, the original poster did not descri…

The problem is that person A doesn't pay any taxes. You're certainly taxing some people to pay for it, but it's not person A. Also, the idea behind bailouts like this is that they are a loan. Ideally the government is profiting from this sort of thing, especially when you consider the overall economic impact of laying off thousands of GM employees, or allowing thousands of pensions to swirl down the drain. I'm agains…

Heh, I noticed that (and edited my post to reflect it), apparently while you were writing your post.

However, there are plenty of people who make less money than auto workers who do pay taxes. One reason the bailout is morally wrong is that it is a regressive tax. It takes from the (relatively) poor and gives to the (relatively) rich.

Re: Let Detroit Go Bankrupt

#52

Post by patio11 »

teaquaffer wrote: post #37
mannylee1 wrote: post #24

This coming from the NY Times... They better take a look in the mirror.

I don't follow- what do you mean?

Presumably, he mean that the NYT is a floundering company which has been devastated by a refusal to adapt to new business realities over the last decade.

5 years ago their stock was trading at $47. Now it is at $6.

http://finance.google.com/finance?q=NYSE:NYT

(For what it's worth, if they collapse I wouldn't bail them out, either.)

Re: Let Detroit Go Bankrupt

#53

Post by ckinnan »

yummyfajitas wrote: post #27
blackguardx wrote: post #25

Earlier quoted context omitted.

This post smacks of jealousy. What is wrong with zero deductible healthcare? I don't fault someone for trying to climb society's ladder. I want everyone in America to be able to earn a living wage. Being in a union doesn't make one lazy or overpaid. How do you over pay someone anyway? Who deems what a job is worth to society? It is very unfortunate that the big three made the agreements they did, but they made them.…

Person A, a waitress at Dennys, making about $8-10/hour with high deductible health care. Person B, an auto worker at GM, making $30-40/hour with zero deductible health care. [edit: see response to this post, auto worker gets $73/hour.] The bailout: tax person A in order to help person B, with 3 large corporations taking a cut of the proceeds. Does this make any sense? Incidentally, the original poster did not descri…

Actually the average UAW salary is around $73 an hour. But the executives are far worse and totally undeserving of any taxpayer help:

"While Uncle Sam debates a $25 billion rescue for the country's automakers, some 9,000 GM managers continue to enjoy one of the industry's best perks - a new car every six months for $250 a month, with repairs and insurance included. And they can write off gas on their expenses."

http://www.nypost.com/seven/11182008/news/politics/gm_honcho...

Re: Let Detroit Go Bankrupt

#54

Post by Locke »

crabapple wrote: post #12
Locke wrote: post #7

It baffles me that we'd blow 700 billion bailing out financial institutions that caused our economic problems. Money that's now going towards bonuses and acquisitions instead of buying "toxic assets" as originally intended. Toxic assets that were created by these same wall street companies. As we save the companies that crippled the credit markets, we have no interest in spending a fraction of that same amount of mon…

As we save the companies that crippled the credit markets, we have no interest in spending a fraction of that same amount of money helping the companies most negatively effected by the condition of those same credit markets. are you trying to tell me that gm is simply a victim of the credit crisis??? why would a bank loan them money now?? aren't we all about responsible lending now?? lending money to gm is the corpor…

Yes. How do people buy cars? On credit. Harder to get credit means fewer people capable of buying cars. A bad economy means fewer people buying cars. GM et al, did not create the credit crisis. They did not create the bad economic conditions.

But we want them, and more importantly, all the people working in that industry to suffer? Honestly, I can't imagine how letting them fail won't cause more than 25 billion in economic damage.

Re: Let Detroit Go Bankrupt

#56

Post by sethg »

crabapple wrote: post #11

one must ask why a waitress at denny's who makes minimum wage and has no healthcare must bail out union workers at gm who make 8x the wages, do less work, have ZERO DEDUCTABLE healthcare (do you? i doubt it), and full pensions. or why should a succesful worker at honda in ohio subsidize not only a failed competitor, but in essence have his own taxation used to undermine his own hard work? as for saving jobs and inves…

Because if the Big Three go under, a very large number of workers (folks working for the Big Three and for their suppliers) will suddenly be collecting unemployment insurance instead of paying taxes; given the current state of the economy, they may be collecting it for quite a while. So it would be cheaper for the government to keep those employers afloat.

The obvious counterargument to that is that the auto companies could take their $25 billion and still go under.

The counter-counterargument is that even if that happens, it would be better for everyone if they went under a few years from now, when hopefully the rest of the economy will be in better shape.

Re: Let Detroit Go Bankrupt

#57

Post by mannylee1 »

patio11 wrote: post #52
teaquaffer wrote: post #37

Earlier quoted context omitted.

I don't follow- what do you mean?

Presumably, he mean that the NYT is a floundering company which has been devastated by a refusal to adapt to new business realities over the last decade. 5 years ago their stock was trading at $47. Now it is at $6. http://finance.google.com/finance?q=NYSE:NYT (For what it's worth, if they collapse I wouldn't bail them out, either.)

Exactly, you made that perfectly clear.

Re: Let Detroit Go Bankrupt

#58

Post by bokonist »

jimbokun wrote: post #6

"At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat." Unions will not take management seriously until this happens. However, I als…

Without some kind of wage growth above inflation

The key is keeping inflation down. Run a sound monetary policy and keep a constant stream of productivity improvements in all sectors, so that the purchasing power of a dollar continually improves.

Re: Let Detroit Go Bankrupt

#60

Post by lacker »

Locke wrote: post #54
crabapple wrote: post #12

Earlier quoted context omitted.

As we save the companies that crippled the credit markets, we have no interest in spending a fraction of that same amount of money helping the companies most negatively effected by the condition of those same credit markets. are you trying to tell me that gm is simply a victim of the credit crisis??? why would a bank loan them money now?? aren't we all about responsible lending now?? lending money to gm is the corpor…

Yes. How do people buy cars? On credit. Harder to get credit means fewer people capable of buying cars. A bad economy means fewer people buying cars. GM et al, did not create the credit crisis. They did not create the bad economic conditions. But we want them, and more importantly, all the people working in that industry to suffer? Honestly, I can't imagine how letting them fail won't cause more than 25 billion in ec…

You think giving them $25 billion is going to be the end of it? They'll just be out of cash again in 6 months, asking for another bailout.
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