Provided, that is, the Supreme Court of the United States (SCOTUS) turns down Indiana’s request to overrule the sale of assets from Old, Crap Chrysler to New, Italian-controlled Chrysler. This after the U.S. Appeals Court told the gearbox-factory-jilted state’s lawyers to piss off. Or, more specifically, “You can’t wait for a better deal to come in from Studebaker.” Wait schmait; the three judges returned their decision about 10 minutes after Indiana’s lawyers finished their arguments. “There’s one more stop on the train,” Tom Lauria, a lawyer for the Indiana pension funds said, after the court’s ruling. Yes, well, New Chrysler left the station a while ago. One of our Best and Brightest has an interesting take on this (after the jump), but again, I reckon this is a done deal.
A TTAC commentator e-mails:
Well, a very interesting conference there will be at SCOTUS on Monday!
Assuming that there are no self-recusals for stock ownership (but shouldn’t they all recuse because they are taxpayers?), I can envision a scenario where Alito, Roberts, Thomas, and Scalia find likelihood of success and therefore would preliminarily enjoin the sale pending expedited briefing and argument.
However, then one of the others says, “Look guys, you can get this case heard, but you are going to lose 5/4, and in the interim FIAT walks away, and then it’s all OUR fault. So, suck it up, and take one for the team.”
Except, seeing as Congress declined to give TARP funds to the automakers… do the institutional aims of SCOTUS usually include allowing the Executive branch to rule by fiat? (Sorry, could not resist. RF, feel free to use, but don’t attribute.) But I think the only way that the four named above can get another vote is to appeal to the others’ amour-propre and not to the rule of law!
It is actually a very “nice” legal issue: “As long as there is some non-trivial amount of competent evidence that the Ch. 11 plan gives the objecting creditor more than a Ch. 7 liquidation would, does that fact that a non-objecting creditor get treated even better invalidate the Plan?” (We can call it the ‘The Parable of the Vineyard Workers’ test. You know—”What business of yours is my generosity with others; you got the wages you bargained for.”)
In other words, does passing the “more favorable than Ch. 7” test confer immunity on favoritism? As a precedent, I think that is very dangerous. But SCOTUS can’t put in a footnote that says, “This decision shall be non-precedental, except for any other bankruptcy BH Obama really cares a lot about.”
Well, by 4:00 PM Monday, we should know how much is left of the Republic.
Darn! I was hoping they wouldn’t emerge. Ever.
I’m still stunned how that is legal…
why I don’t declare bankruptcy, get rid of my mortgage (old me) and keep my house (new me, now paid off since I got rid of the mortgage). Honestly, that’s what they did and if it was legal, everyone would be doing it all the time.
So, with bankruptcy they lose all their liabilities? they didn’t lose their car designs, and that is their biggest liability (don’t call the Sebring blue prints an asset!!!)
Edit: shouldn’t emerging from bankruptcy mean not needing federal money anymore? If you need federal money to pay your bills, you are not able to pay your bills, which requires you to legally file for bankruptcy.
If this goes forward I’m betting that there are thousands of smaller companies that will be able to use this to screw the bondholders.
Everything has consequences… Yin and Yang..
“Well, by 4:00 PM Monday, we should know how much is left of the Republic.”
Somehow the Republic survived slavery, the Great Depression, the Vietnam war, Watergate and countless other tragedies; but the Chrysler bankruptcy deal is going to bring it all crashing down on our heads.
Of course we can ignore the rule of law for the greater good…Again…We live in an Idiocracy where scumbags like Obama and Bush and Clinton can play Hitler.
What’s even funnier, the MSM is ignoring all of the corruption and loopholes and financial disasters that surround Chrysler’s bankruptcy. Instead, articles all over the web, like AOL, LA times, etc. are all like “40% off on a Nitro at closing dealerships?! Good deals on cars now!!! Let’s SHOP!”
I believe chief justice Roberts is honest (I am more of a liberal, more of a Democrat, but still an independent). Hopefully the bondholders who legally own Chrysler assets, are heard by the Supreme Court. No way the UAW should be given part ownership. I think the UAW ownership is a bribe to keep them from striking. And no way Fiat should be given part ownership without bondholders agreeing to the deal.
Haven’t seen the ME-412 in a while.
Supposedly, that was the car that prompted Mercedes to wreck Chrysler, or at least make sure they never, ever moved upmarket. If you wear a tin foil hat.
Luther:We live in an Idiocracy where scumbags like Obama and Bush and Clinton can play Hitler.
Sigh.
Invading sovereign nations without UN sanction and abusing citizen’s rights is acting like Hitler. Helping a company through bankruptcy isn’t acting like Hitler.
Matt51:Hopefully the bondholders who legally own Chrysler assets, are heard by the Supreme Court.
“Well, your honour, our bonds—that we bought for pennies on the dollar—would have been worth dick without government assistance, but because the government put funds into Chrysler, we think we should get full value. Oh, yes, were aware that this pretty much means we’re getting money for nothing and our chicks for free.”
Spare me the pleas of the vulture capitalists.
ME412 – the car that got Dieter in trouble with Stuttgart (they don’t like to be embarrassed).
Chrysler is now making good on it’s warranties and Lemon Law bounced checks:
http://www.autoblog.com/2009/06/05/followup-chrysler-fiat-reportedly-agree-to-honor-lemon-law-cla/#comments
“On a recent episode of The Chrysler Files, customers who purchased Chrysler vehicles that were later officially certified as lemons were being reimbursed by the company with checks… that bounced. The snafu stemmed from the fact that while said claims were made before Chrysler’s bankruptcy, after the automaker’s Chapter 11 filing, the judge had to clear the funds to be paid from Chrysler’s account. Since the judge hadn’t cleared the funds, the checks were worth precisely zero dollars.
Those owners will be happy to know that the judge has finally approved Fiat and Chyrsler honoring “all warranty and lemon law obligations” for cars purchased up to five years before April 30. With the ruling, those affected will also be eligible for additional costs and attorney’s fees. Of course, that news still doesn’t detail when you stranded motorists can expect a check to arrive — or when they can cash the ones they already have — but help is on the way.”
As gas prices hovered around $4 a gallon and American automakers watched their pickup-truck and sport-utility sales plummet last summer, investment managers for some 100,000 Indiana teachers, police officers, and other civil servants poured millions of pension dollars into what the funds considered a safe investment: secured debt in Chrysler. Now, as the company speeds toward an exit from bankruptcy court, they are crying foul.
link from Businessweek
“I can envision a scenario where Alito, Roberts, Thomas, and Scalia find likelihood of success and therefore would preliminarily enjoin the sale pending expedited briefing and argument.”
A minority of the Supreme Court can issue a temporary injunction?
Anyway, you’re giving the Federalists too much credit. Scalia loves to cry “rule of law”, but in Bush v. Gore he put that to the side because of “emergency” and “national interest”.
“As a precedent, I think that is very dangerous. But SCOTUS can’t put in a footnote that says, ‘This decision shall be non-precedental, except for any other bankruptcy BH Obama really cares a lot about.\'”
They don’t need to use a foot note; they can just put “Our consideration is limited to present circumstances” in the body of the majority opinion like they did in Bush v. Gore.
Except, seeing as Congress declined to give TARP funds to the automakers… do the institutional aims of SCOTUS usually include allowing the Executive branch to rule by fiat?
I would love to see the Supreme Court rule that the use of TARP funds to bail out automakers exceeds the authority that Congress gave the Executive branch with TARP, or, even better, that the authority delegated by Congress to the Executive branch with TARP is unconstitutional in its entirety (this is also probably true). But I highly doubt I will see that. The conservatives on the Supreme Court are only strict constructionalists when it is convenient. Scalia isn’t going to take the poor bankers TARP money away, fuggetaboutit.
I find it odd that some people would oppose labor having an ownership stake in a company. Seems that would be the most expeditious way to align their interests with that of the company, as opposed to the perpetual battle between them and owners and managers over who gets how much of the pie.
I think the “Parable of the Workers in the Vineyard” is a good starting point to make an analogy, but the actual Chrysler plan is that plus one.
What I mean is this: Not only are the secured creditors recovering at least as much cash as they would have under a Chapter 7 liquidation (“Take that which is yours and go your way,” as the Good Book put it), but the advantages being given to certain un-secured groups (i.e. New Chrysler equity given to the UAW) come not from the estate of the company, but are a handout from a third party — the government.
The difference is this: In the parable, the receipients of the landowner’s generosity got their money from the estate of the landowner, which was also the source of wages to the contracted workers. Had the UAW received its advantages simply from the value stored up in Chrysler, while freezing-out the bondholders at Chapter-7-level recoveries, that would be illegal. The would be the exact sort of seniority-skipping that all the conservative critics are worried about. But that’s not happening. The value that the UAW is getting out of this deal is entirely due to the discretionary support of the U.S. Government. You can object to that, but it’s a political objection, not a bankruptcy-policy objection.
In a bankruptcy, claimants do have a right to object to the way in which the debtor’s estate pays out money. But since it is the U.S. Government paying out money to favorites here, and not the debtor’s estate playing favorites, those objections in bankruptcy court are misplaced.
On the SCOTUS-politics side, I’m not so sure that the likely-five in favor of the current ruling could not poach off one or both of Roberts and Alito, and therefore block a granting of review. And even if review is granted, I’m not so sure that they couldn’t schedule the hearing on an accelerated basis (like in Bush v. Gore) in light of the economic and (yes) political importance of this matter. The President has a skin in the game rather publicly, and the precedent here would control the fate of both Chrysler and GM — pretty big potatoes in a large part of the country.
Indiana Teachers and Police Pension funds invested in Chrysler in 2008, for 43 cents on the dollar. They made a very foolish choice. Just because they were secured creditors, does not mean the value they could extract upon liquidation would equal the amount they invested. Chrysler’s predicament was a well known fact at the time they invested.
Given that the Indiana pension funds represent only one percent of the secured bondholders, and given the previously-mentioned fact that they will receive more under the current plan than liquidation; one can only conclude that the appeal to the Supreme Court is being funded and manipulated by anti-Obama elements. There appears to be no rational basis for the appeal from the viewpoint of the bondholders.
The judge in this bankruptcy case sounds like a complete pushover. I wonder how much the Obamessiah and friends paid him to ensure that this filing went “smoothly”.
On top of all that…who the hell cares if Chrysler is now “out of bankruptcy”. None of their products are selling strongly and no new products are on the horizon to replace what they have (and the Fiat 500 doesn’t count in this department, sorry – Chrysler needs a hell of a lot more than a cute niche car to get by at this point).
Which part of this bankruptcy actually made the company viable, anyway?
The judgement in the bankruptcy case was confirmed by the court of appeals. Did you read RF’s lead in?
The purchase by FIAT makes Chrysler viable because FIAT is a leading seller in many markets including Latin America.
Chrysler’s remaining dealerships will also provide a network for FIAT to sell other products such as their Alfa line.
I would not expect that many existing Chrysler products will be continued with the new company. I expect that some Jeep products will continue.
Only time will tell if the new company is going to work. The UAW was awarded stock in the settlement. If the stock price does not rise, the value of the stock settlement for the UAW will not cover the pension and health care requirements for employees. If that happens, I expect the taxpayers will again be on the hook.
psarhjinian :
June 6th, 2009 at 6:37 am
Matt51:Hopefully the bondholders who legally own Chrysler assets, are heard by the Supreme Court.
“Well, your honour, our bonds—that we bought for pennies on the dollar—would have been worth dick without government assistance, but because the government put funds into Chrysler, we think we should get full value. Oh, yes, were aware that this pretty much means we’re getting money for nothing and our chicks for free.”
Spare me the pleas of the vulture capitalists.
I do not call our state retirement money the “plea of vulture capitalists”.
All the airlines who went chapter 11, their unions got NOTHING. Kiss my ass the UAW deserves ownership over the bondholders.
The judge in this bankruptcy case sounds like a complete pushover. I wonder how much the Obamessiah and friends paid him to ensure that this filing went “smoothly”.
He’s lucky. Obamamessiah might have had Martians dissect him, too, and consume his flesh.
The rabbit hole is deep. Very deep.
It appears to me that the Chrysler Chapter 11 is just a way to transfer more taxpayer money to the UAW than they would get if Chrysler was liquidated and retirees got compensation via the Pension Benefit Guaranty Corporation. The damn parasites have to keep up appearances of an ongoing business to keep the skim going. Sound harsh? Imagine who would scream in opposition to the following alternate proposal.
1) Take the billions that is in effect being paid to Fiat and the UAW and instead do a one-time prorated DIRECT payment to Chrysler employees and retirees.
2) Liquidate the assets of Chrysler and use the proceeds to pay debts.
The workers come out ahead, a car brand that can’t even compete with top tier used cars exits a market with a severe overcapacity problem, and the dead host donates some good truck models to another manufacturer. Instead we get more Sebrings with the future possibility of Fiats too.
But SCOTUS can’t put in a footnote that says, “This decision shall be non-precedental, except for any other bankruptcy BH Obama really cares a lot about.”
Yes, the SC can. They included exactlly this language in Bush v. Gore.
As to the main point. These bond holders have a right, that they paid for (never mind how good a deal they got). Imagine if someone came up to you, liked your car (say, a ’74 BMW 2002), and gave you $25k for it and took it without your permission. Would you be satisfied with a court ruling that they get to keep your car because kelly blue book value is $10k at best?
It’s a hard question to answer, becuase letting a minority of bondholders derail such an important (and increasingly viable) reorganization has huge risks. But its seems clear to me that pushing them aside will never be legal, at best it will be expediant.
That’s a great pic.
I’d drive one of those!
kowsnofskia:
“On top of all that…who the hell cares if Chrysler is now “out of bankruptcy”. None of their products are selling strongly…”
You could say that about any automaker. No makers’ products are selling strongly in a 10 million a year market. Come back when we get to 12-14 (It will happen, despite what some here think, demographics are very powerful forces that are hard to resist.)
“and no new products are on the horizon to replace what they have…”
New GC and V6 engine here this calendar year, new 300 and Charger next year. After that it’s murky due to FIAT’s involvement. But the 200C has been green lighted so I expect to see it use FIAT underpinnings (an actual platform instead of what Mercedes gave Chrysler in the 300) to speed up development.
“Which part of this bankruptcy actually made the company viable, anyway?”
The part that divides the companies assets and liabilities into “good” and “bad” categories. Which is how BR law works (that’s why it will be the “new” Chrysler and the “new” GM). If your only test of viability is sales than half or more of the automakers the world over should go out of business.
“The part that divides the companies assets and liabilities into “good” and “bad” categories. Which is how BR law works (that’s why it will be the “new” Chrysler and the “new” GM). If your only test of viability is sales than half or more of the automakers the world over should go out of business.”
Wrong. See, the difference is that all of the transplants and one domestic automaker (Ford) didn’t need American government money to continue operating – nor a fake “bankruptcy” charade to roll on. If you have adequate reserve funds to continue operating despite poor sales, then you’re a going concern. Chrysler, by every reasonable standard, was not – and consequently it should have been liquidated.
Fiat didn’t contribute a penny to this arrangement, remember? How much does that vouch for Fiat’s faith in Chrysler’s viability? Did Daimler not value its share of Chrysler at “nil”? Are Chrysler’s sales not by far the weakest of any domestic (and even many of the transplants)? What Chrysler products are going to sell strongly in the future? Does Fiat have any hope of improving Chrysler’s abysmal reliability reputation?
It should come as no surprise that Indiana’s screwed itself by making Mitch Daniels its privitizer-in-chief.
The Republic is at a “Y-junction.”
This is our “final exam.”
Turn Left: Dictatorship. Followed by unintended consequences*.
Turn Right: Retaining something resembling a Republic under the rule of law.
I never thought I would have seen the day that Chrysler would be so important to the nation.
Certainly, its cars have not been important at least since World War II when famous Dodge trucks were used to defeat the enemies of freedom.
* such as foreigners saying “hmmm, on the whims of one man, the “law” simply got brushed aside to favor his favorites – I’m not one of the ‘great leaders’ favorites – why should I leave any money invested in the United States and risk it? I’ll pull it out.”
Turn Left: Dictatorship.
Yes, the troops are coming for you momentarily. Hunker down.
Somehow the Republic survived slavery, the Great Depression, the Vietnam war, Watergate and countless other tragedies; but the Chrysler bankruptcy deal is going to bring it all crashing down on our heads.
Dude, the downfall began with the cancellation of the ABC drama “NYPD Blue.”
If you don’t believe me, then check it out: Within a year of the show ending, we’ve had the end of the housing bubble. That was followed by the rise and fall of the oil bubble, the end of Republican rule in Congress and the White House, the failure of Lehman Brothers, Fannie Mae and Freddie Mac, the stock market crash, and the automotive bankruptcies.
None of that happened while NYPD Blue was on the air. The world was a much safer place when Dennis Frantz was kicking ass, and we have hell to pay now he’s gone. Repent ABC, repent.
@ Pch101
Classic.
Funny stuff.. When Bush Socialized the banks and AIG… Thats just business as usual..
Obama socializes Chrysler and GM (following the Bush plan/template) and the world is coming to an end.
We need to rename this site..
“Truth about tin foil hats”
I bet ya $5 that the Republican SCOTUS approves the BK designed by Bush and recommend by a Republican Judge… Just a guess…
The death watch can start all over again with the rebadged Fiats waiting in the wings.
Funny stuff.. When Bush Socialized the banks and AIG… Thats just business as usual..
The economy has suffered greatly after 8 years of the tremendous government expansion under Bush, which greased the skids for the chairman Obama.
No one knows where the anointed one will be willing to stop.
Your political orientation doesn’t matter anymore. All of us gonna pay the price.
@Camarokid:
Funny stuff.. When Bush Socialized the banks and AIG… Thats just business as usual..
Obama socializes Chrysler and GM (following the Bush plan/template) and the world is coming to an end.
You’re kidding, right? It seemed the only folk supporting what Bush did were the Democrats and the Republicans that seemed to be fine with a one pager from Paulson explaining why he needed $750B.
If you recall, most of this country was against the bailout, which is where the oft repeated phrase, “bailing out Wall St. but not Main St.” came from.
Look man, just because Bush was/is a moron doesn’t mean Obama, someone the left seems to hold in extremely high regard partially because of his supposed intellect, should make the same idiotic decisions.
What’s wrong with America is symptomatic of what’s wrong with this bailout – the victims (US!) are the ones footing the bill for the criminals.
Save the silly, “Bush is a moron” partisan babbling for DailyKos.
When something is objectively wrong, who gives a crap if the person committing the wrong has a ‘D’ or an ‘R’ next to their name.
Wake up.
“And no way Fiat should be given part ownership without bondholders agreeing to the deal.”
The vast majority of bondholders did agree. It is now a tiny fraction of the bondholders who are trying to get a better deal. Remember that basic tenant of Democracy, majority rule?
This from today’s news: “The emergency request goes first to Justice Ruth Bader Ginsburg, who handles such matters from New York. She can act on her own or refer it to the entire court.”
http://news.yahoo.com/s/ap/20090607/ap_on_go_su_co/us_supreme_court_chrysler_bankruptcy_9
Also, since when did pension funds for cops and firefighters get “invested” in deep discount junk bonds? That’s gambling, not investing.
You’re kidding, right? It seemed the only folk supporting what Bush did were the Democrats and the Republicans that seemed to be fine with a one pager from Paulson explaining why he needed $750B. If you recall, most of this country was against the bailout, which is where the oft repeated phrase, “bailing out Wall St. but not Main St.” came from.
What “seems” true and is true are two different things. What one “recalls” may not actually be what happened.
For example, consult a CNN poll from October 5. At that time, 46% of people favored the action taken (the $700 billion bailout), while another 22% opposed the specific action but favored a different proposal. Only 30% favored inaction.
To check on the partisanship with respect to bailouts, consult an ABC poll from December 7 about the auto bailouts (the $34 billion collective request of the firms). Both Independents and Republicans had a 36% support level and Democrats had a 42% level. Not much difference.
Save the silly, “Bush is a moron” partisan babbling for DailyKos.
Yes, let’s instead luxuriate in the endless variations of “Obamafascist” that we can get right here.
For example, consult a CNN poll from October 5. At that time, 46% of people favored the action taken (the $700 billion bailout), while another 22% opposed the specific action but favored a different proposal. Only 30% favored inaction.
Using the CNN poll you cite, the simple majority of people disagreed with the bailout. Thank you for correcting my use of the word ‘most’. I should have simply said, “the majority”.
Yes, let’s instead luxuriate in the endless variations of “Obamafascist” that we can get right here.
You’re right… my criticism should have been targeted at the name calling from both sides… it’s nothing more than masturbation material for the extreme.
Having said that, Obama is the president now, is calling the shots now, and is the one continuing to light fires rather than calling in the fire dept. Indeed, he is continuing the failed policy of his predecessor.
Lucky us.
To check on the partisanship with respect to bailouts, consult an ABC poll from December 7 about the auto bailouts (the $34 billion collective request of the firms). Both Independents and Republicans had a 36% support level and Democrats had a 42% level. Not much difference.
Interesting data point… thanks for sharing. Based on this, the solid majority of those polled opposed the auto bailout. I wonder what support of both the auto bailout and banking bailouts look like now. I’m sure it’s less than the numbers quoted from 12/7/08.
@jkross22
Save the silly, “Bush is a moron” partisan babbling for DailyKos.
Interesting, I never said that Bush is a moron… Or that Obama is Hitler… That was someone else.
My point was the “take over plan” is not a Obama plan… This is a Bush Plan… Obama is merely implementing a plan that was handed to him by Bush and Paulson. And its not all that bad of a plan.
Chrysler will be in and out of BK in little more then a month. That’s not only a great plan.. That’s some kind of miracle! If GM’s BK goes that fast they will be out of BK before most of the 2010 MY are announced… Who would have thought? The plan is working.
My POV is not that Obama is some kind of Socializing Fascist… Or that Bush is some kind of Moron with an IQ of 75…
My POV is that between the two of them they have managed to save (at least for now) the American Automobile industry. A feat that only 6 months ago almost NO ONE thought possible.
My prediction… The Supreme Court will support the plan.
Baquack Hu$$ein “The Islamic Shock” Obamarxhitler is going to destroy us all with his islamist naznumism!
If only he had let millions of people lose their jobs so a few gamblers could make some money by picking apart the lifeless corpse of American industry, we’d be fine!
In principle, I won’t ever again purchase a GM or Chrysler product (new or used) because of the government’s intervention. I need to be able to sleep at night about this, if nothing else.
Though, I don’t think either company will be around long enough for that to matter.
On the other hand, I would buy a Hummer if the Chinese get it, and I would really like to see what Penske can do with Saturn in a couple of years.
In principle, I won’t ever again purchase a GM or Chrysler product (new or used) because of the government’s intervention.
So you stopped flying after the government bailed out the airlines?
Long126mike:
First, I know that the governmental ownership is everywhere. I just am deciding this for autos. I don’t claim consistency. I actually consider consistency inappropriate, since the government is the best entity at times.
Second, I can’t afford to fly so flying is a moot point. I have actually never paid for my own flights-always flown with parents money (which has recently dried up).
Do you favor the government’s intervention in GM and Chrysler? I am certainly open to read your thoughts on the topic.
http://www.foxnews.com/politics/2009/06/09/supreme-court-clears-way-chryslers-sale-fiat/
Republican Majority Supreme Court just said…
That the Bush/Obama plan is Good, Legal and should proceed…
Anything else? Oh ya.
I told you so…
Do you favor the government’s intervention in GM and Chrysler? I am certainly open to read your thoughts on the topic.
That’s tough. Macroeconomically, I think it’s prudent to keep them both from liquidating simultaneously. Any rational cost-benefit analysis will tell you that it’s a prudent choice, because the probability of a downside and the costs of a downside are pretty severe.
Do I like guys like Maximum Bob taking his and her private jets to Bali to drink smoothies on the beach, while I pick up the tab for his awful mess? Hell no. I don’t like it one bit. If I ran the world, he’d be lucky that the least I did was seize everything he owns and put him in a work camp shoveling cow dung for the next 5 years.
Do I love unions, particularly the UAW? Hell no as well. People on the right love to lump unions into the “lefty” side of things, but the reality is that unions are like any interest group of any size and power – they have their own unique agenda. For example, you can find unions in favor of drilling in Alaska, or in favor of publicly-funded sports stadiums. You also find them fighting certain transit innovations or changes in educational policy.
But I support the president’s decision on this matter at this point because I know for a fact that they’re looking at this thing from the big picture perspective, and since it’s his job to look out for the country and the economy as a whole, I agree that the choices he’s making at the moment are the best choices available from a set of bad options. What can he do? He inherited a lot of big messes at once.
I think that people who focus on “getting their money back” or using GM or Chrysler’s eventual business success or failure as a metric are missing a large part of the picture. Government accounts for about 20% of the economy in an average year, and its job is to be a stabilizing actor whenever things get out of whack. So if there’s a steep drop-off in one aspect of GDP (like consumer spending), then government needs to step up and fill that gap, otherwise the economy is really going to crater. People need to not look at the gross dollar amounts but when they’re being spent and for what broad purpose.
Take the stimulus bill as another example. There’s a big focus on “shovel-ready” projects, which applies to the transportation sector. In an ideal world, I would like that the government shift its funding priorities away from the overwhelming dominance of personal automobiles in terms of person-miles traveled. But that’s not what’s happening in the short-term stimulus. Most of the money is going to repairing old roads and bridges and building new ones, because they’re ready to go and all they need is funds. That helps the economy as a whole at a crucial time, and I accept that trade-off, even though it makes the auto dependence problem worse in the short-term.
Is that a sufficient answer? How about you on the broader considerations?
Long126mike:
I would have let Chrysler die in 1979, since I think that bailout sewed the current seeds of destruction.
I am very eager to see what Penske can do with Saturn.
I currently drive Toyotas but I am open to an quality product. I just will have to have a lot more grey hair before I return to GM.
I absolutely loved this comment:
If I ran the world, he’d be lucky that the least I did was seize everything he owns and put him in a work camp shoveling cow dung for the next 5 years.
Thanks