Plus, no one is suggesting that we tax autoworkers at a higher rate until the contracts can be renegotiated. That would be a good way to force the end of the jobs bank; tax anyone earning a paycheck but not doing work in Detroit 100% (I think that would include Wagoner too).

But no one is suggesting that because that is somehow a necessary wage but the bonuses are frivolous, even though they are in a contract and in fact, a large portion of these people’s income they often depend on.

In the case of the auto industry handouts and subsequent control, the auto industry didn’t negotiate well enough. Whether that was due to the beggars not doing a good job or the fact that they negotiated from a place of weakness is besides the point.

The two cases have little to do with each other in reality. Not that it makes much difference, but I understand that congress has its retirement funds handled by AIG, so AIG will not be going under…. ever.

http://www.answers.com/topic/bill-of-attainder

The idea of taxing those people who got the bonuses won’t stand. I had thought this was in the Constitution, but it’s not. It is a matter of law that our courts will uphold though. Maybe a lawyer will chime in on this.

At any rate, I will be ending my private career if they pass a tax on those bonuses. I will be getting involved in reforming our country back to one based on law, liberty, and private property. You can have none of them without all of them.

If these bonuses were legal, then that’s the end of it. Blame the folks who made it legal, and stop listening to them demagogue the issue. Congress now runs AIG. They have no one to blame but themselves.

I hope the folks at other companies are watching all this and rethinking any ideas of begging for cash. The folks at GM would be better off with bankruptcy, and hopefully they see it now.

As for those who keep wanting to fly the arguement that the auto companies are just as deserving as the banks, well, two wrongs still don’t make a right.

Yeah, on that one definitely the earlier.

I choose the later.

Really? Didn’t you mean the earlier?

What is strange is that bankruptcy judges don’t already have that power. Other contracts can be altered or canceled in bankruptcy court, so why should mortgages be a specially protected class of debt?

Fundamentally changing the mortgage biz seems like a dose of just what the doctor ordered.

In order to maintain a civil and prosperous society, it is vital that men destroy the criminal parasites…Especially the taxtakers.

Is this what we want?”

Well no, after reading this Detroit News crap I want real capitalism, late 1800s style, but this is what we are going to have to settle for.

The Detroit News has absolutely no understanding of it, and often confuses it with kleptocracy, or the government giving free money to businesses to waste, which is what the Detroit News actually supports. But if its editorialists understood true capitalism they would know the following. But for the good grace of the horrible contract breaking government:

-The UAW workers would be out on their asses, with nothing, because every Detroit automaker would be in Chapter 7.

-Every AIG executive employment contract would have been deemed worthless more than five months ago when the company became insolvent, not possibly within one week from now.

-Instead of a bankruptcy court writing down a bankrupt person’s mortgage from $200K to $150K the house would be foreclosed on, and after paying for security and upkeep for a year the mortgage servicer could auction it off for $10K (in a much worse market than the still artificially inflated housing market we have now).

You want to talk about “fundamentally changing the way business is done and fundamentally changing mortgage writing”? Letting real capitalism function would change those things forever, more than any government intervention could ever hope to.

If people losing a little bit because the government changes the obligations of only insolvent companies fundamentally changes things, then people losing everything because the insolvent companies are liquidated would change things a lot. The government is under no obligation to not only reduce the impact of bad private investments, but to actually, with my tax money, turn them into good ones.

Unfortunately I can’t have the above. To answer this babbling editorialist’s rhetorical question, my options are:

-Use my tax money to pay the UAW workers in full, or change the deals for the people that wouldn’t even have jobs if not for the government.

I choose the later.

-Use my tax money to pay AIG executives in full, or change the deals for people that wouldn’t even have jobs if not for the government. Remember, the government owns some shares in AIG, but as a shareholder, it has no obligation to pay those executives or contribute anything to the company. Like Cerberus with Chrysler the government has limited liability with AIG, and no obligation to fund anything.

I choose the later.

-Renegotiate mortgages in constitutionally provided for bankruptcy courts, putting the losses on the people that made the bad investments, or use my tax money to bail out the mortgages in full.

I choose the later.

I do not think I am the only one.

What if the asian and euro auto companies were not subsidized by extremely active industrial policy in the form of R&D grants, free worker training, and a protected domestic market?

Is the fact that US washing machine, refrigerator, television, etc manufacturing is now dead the fault of management in those industries too? Or might there be larger issues that have nothing to do with unions and the rare example of management that does not seek to crush them at every turn?

Finally there is the fact that asian countries have manipulated their currencies to make their exports cheaper and more competitive. Do you want to blame Bob Lutz for that too?

Do you think Detroit would have done better if Asian currencies were not manipulated and imports from this region (including imported parts for US assembled cars) were 25-40% more expensive?

During the congressional hearings over the auto bailout, the expert economists cautioned that allowing the government to move to the front of the creditors’ line would be a fundamental change in the way business is done in the US and would make future investments in corporate debt a risky move.

Howes is arguing along the same lines. The amount of moral hazard and monkey wrenching the economy that the Obama administration is creating is staggering. Letting bankruptcy judges rewrite mortgages fundamentally changes the mortgage biz.

and what is it with calling it taxpayer money? from obama to howes to your local congrescritter – it’s not just “taxpayer” money, it’s their money, plain and simple. they should remember that they pay taxes, too. well, most of them.

The easier it is to recapture the AIG bonuses, the easier it will be to micro-meddle a few weeks from now with the D3.

That said, I love the thought of a special targeted income tax on excessive payouts by firms receiving FedBucks. That’s actually possible and creative. And should have Rick W and others very worried.

http://www.nydailynews.com/money/2009/03/17/2009-03-17_aig_bonus_checks_may_be_taxed_at_up_to_1.html

The reason that the government can pressure GM and Chrysler is that they have something ($$$) that GM/Chrysler still want – and they can use that as a stick.

AIG has already received the money – and, in fact, has already paid out the bonuses in question.