|
|
Joined: Sep 2006
Posts: 19,150
Legend
|
Legend
Joined: Sep 2006
Posts: 19,150 |
You didn't say a thing that remotely requires an apology. Quote:
People were hurt and many in a way that they obviously didn't deserve. Corporations and government both screwed up and forced many problems onto people who were working and investing diligently.
That was exactly the point I was trying to make.
And into the forest I go, to lose my mind and find my soul.
- John Muir
#GMSTRONG
|
|
|
|
|
Joined: Sep 2006
Posts: 11,465
Legend
|
|
Legend
Joined: Sep 2006
Posts: 11,465 |
Quote:
Can you name one industry that would not have thrived more without any government interference?
Can you prove it?
Of course you can't. It's impossible to prove either way. You can cite some examples where government intervention has helped industries, and where government contracts have helped businesses thrive .... but regulations also cost money, so is it a gain, a loss, or a draw?
You're missing and/or avoiding the point (and kind of making mine) ...
You guys consistently argue that free market capitalism is a sensible and proven system ... yet when I ask you for examples of it's success, you cannot provide one.
If you say 'free market capitalism works', the burden of proof isn't on me to disprove that it doesn't, but rather on you to prove that it does, and you can't, because there aren't any examples of it historically, especially not in the United States of America.
|
|
|
|
|
Joined: Sep 2006
Posts: 50,545
Legend
|
Legend
Joined: Sep 2006
Posts: 50,545 |
We were largely free market into the industrial revolution. It was brutal, and oppressive, and people died because of horrific conditions. It was largely free market though.
You asked for an example, and that's one.
Small businesses are another example, not generally helped by government intervention, but usually restrained and hindered by government intervention. You skipped right over that point. You completely ignored it.
Micah 6:8; He has shown you, O mortal, what is good. And what does the Lord require of you? To act justly and to love mercy, and to walk humbly with your God.
John 14:19 Jesus said: Because I live, you also will live.
|
|
|
|
|
Joined: Sep 2006
Posts: 11,465
Legend
|
|
Legend
Joined: Sep 2006
Posts: 11,465 |
Quote:
We were largely free market into the industrial revolution. It was brutal, and oppressive, and people died because of horrific conditions. It was largely free market though.
If it was brutal and oppressive and people died of horrific conditions, it obviously wasn't successful or ideal, was it?
Quote:
Small businesses are another example, not generally helped by government intervention, but usually restrained and hindered by government intervention. You skipped right over that point. You completely ignored it.
Because it's not providing an example of free market capitalism being successful.
That's the crux of my point here -- there isn't a successful example anywhere, in history. You've come close to admitting as much.
Your only resort is to say 'you can't prove it doesn't work'.
If someone came into a thread and said 'Socialism works. We should adhere to the principles of socialism', they would be immediately greeted by two responses:
a) Socialism has been proven to be a failed system
b) Name me one successful socialist operation in history?
And the people who will point out that socialism has failed at every turn are also the ones who will advocate free market principles, despite the fact that the exact same thing could be said about free market capitalism.
|
|
|
|
|
Joined: Sep 2006
Posts: 50,545
Legend
|
|
Legend
Joined: Sep 2006
Posts: 50,545 |
Quote:
If it was brutal and oppressive and people died of horrific conditions, it obviously wasn't successful or ideal, was it?
It was successful in that businesses expanded and thrived, people found employment and a better life for their families, and consumers got products and innovations that they want.
It wasn't perfect .... but we aren't arguing perfect .. we're arguing successful. To my mind, a system that expands and grows, offers employment and an ever growing range of products and services to consumers qualifies as successful. People were free to buy whatever they could afford to buy, and businesses could sell their products at whatever pricing structure they saw fit to charge.
Perfect? No, obviously it was not perfect ... but again, we aren't debating perfection. We also aren't debating ideal.
Successful? I would argue that yes, it was successful.
If not, then how do you define success?
Micah 6:8; He has shown you, O mortal, what is good. And what does the Lord require of you? To act justly and to love mercy, and to walk humbly with your God.
John 14:19 Jesus said: Because I live, you also will live.
|
|
|
|
|
Joined: Sep 2006
Posts: 11,465
Legend
|
|
Legend
Joined: Sep 2006
Posts: 11,465 |
Quote:
Successful? I would argue that yes, it was successful.
If it was successful, then why was it abandoned?
First and foremost, it's important to note that even those times weren't free market capitalism - the government was protectionist even then, using tariffs to ward off stronger foreign competition. There was also government intervention in the form of union busting. Beyond that, the industrial revolution was fueled by textiles, with one particular commodity being singularly important: cotton. It was a crucial component because it was cheap, and it was cheap because we killed off the native population and brought in slaves to cultivate it.
So, noting that this period wasn't even built upon the foundation of free market forces to begin with, let's examine ...
We've already noted horrible exploitative working conditions that resulted in slave-like wages and imminent danger for labor ... there's, of course, exploitative monopolies limiting economic freedom ... police and fire worked on profit motives that dictated if you weren't subscribed to a fire company, or willing to endure crippling debt, they watched your house burn down ... a lack of regulations on food causing all sorts of death and illness ... I know how much you love illegal immigrants - they're not only all over the place, they're welcome with open arms ...
..and you come back with 'hey, it's not perfect'?
Again, look at the flip argument. If I advocated socialism, and you pointed out it's historical failure, would you accept me listing a very narrow list of positives and a 'hey, nothing's perfect'?
There is no better economic system than capitalism for generating wealth. Even detractors will admit that. But generation of wealth does not itself make for a successful economic system.
If that were the case, a system in which 10 people generated astronomical wealth for themselves while the majority of the population toiled in exploit, danger and disease would be considered a success.
If I were to control an entire industry, without regulation and supervision, and exploited my workforce to the point of death, injury and misery, but in doing so created a substantial amount of wealth ... you would consider that successful?
I don't think that you truly believe it was successful; I think you're just trying to save face in an argument.
But we're digressing from the point:
You can't name a single successful free market economy in history, because there isn't one. The closest example is a period which wasn't even really free market to begin with, and came with so much exploitation, oppression, and economic limitations that it was abandoned very early in it's tenure.
And yet I guarantee that you will continue to advocate free market capitalism with no basis in history or practice, all the while denouncing the flaws of other systems, ignoring the similar flaws in free market capitalism, or tossing them off as 'hey, nothing's perfect'.
|
|
|
|
|
Joined: Sep 2009
Posts: 798
All Pro
|
|
All Pro
Joined: Sep 2009
Posts: 798 |
Quote:
Of course the government still owns a controlling share in Chrysler .... and while they are "silent" ... you can be sure that the union will get a sweetheart deal from them as well.
You keep repeating this fairy tale that unions got a sweetheart deal out of this whole mess. Search "UAW concessions 2009" on Google, and you will see that the union gave ground on virtually every front in 2009. They gave up cost-of living wage increases, tuition assistance, various health benefits, scrapped the jobs bank (which paid 95% wage for unemployed workers), and lowered the average starting wage tier by half, from about $28 to $15 per hour. They also ended up paying more into their health benefits and pensions.
I have no idea how you are coming to the conclusion that this is a "sweetheart" deal that somehow was a political favor. If this was a political favor to a large union, it is the worst political favor in history.
|
|
|
|
|
Joined: Sep 2006
Posts: 13,205
Legend
|
|
Legend
Joined: Sep 2006
Posts: 13,205 |
Dick Durbin speaking "truth to power" ... I don't know whether to use the ROFL smiley or the ROLLEYES ...  
|
|
|
|
|
Joined: Sep 2006
Posts: 16,195
Legend
|
|
Legend
Joined: Sep 2006
Posts: 16,195 |
Quote:
Dick Durbin speaking "truth to power" ... I don't know whether to use the ROFL smiley or the ROLLEYES ...
Strangely enough, both work quite nicely! 
#GMSTRONG
|
|
|
|
|
Joined: Sep 2006
Posts: 50,545
Legend
|
|
Legend
Joined: Sep 2006
Posts: 50,545 |
The unions "gave back" in the bankruptcy because they had to if they wanted to save their jobs.
It's that simple.
Even then, the government maneuvered so that GM could not go bankrupt without their "assistance".
The taxpayers put up roughly $50 billion to save GM. About $20 billion has been paid back. GM "paid back" $8.1 billion ...... but they used taxpayer dollars to repay the taxpayers.
So ..... the taxpayers are on the hook for billion and billions of dollars that we will never see back. GM's stock would have to more than double for us to get our investment back. That isn't going to happen anytime soon. (or later)
So ... the taxpayers are going to get shafted on this whole deal (surprise) and the government is taking care of the union long before the taxpayers get paid back. No one at GM should have received a penny in additional pay until the taxpayers are 100% paid back. Not fair? They wouldn't have jobs at all if it wasn't for us.
As far as what the union "gave up", frankly, I don't care. They kept their jobs, and now they got nice raises. (through bonuses and benefits) Many taxpayers who helped put up the money to save them are losing their jobs ....... but who cares about them? We'll wind up adding to the deficit because of this whole bailout .... but who cares about that either.
Micah 6:8; He has shown you, O mortal, what is good. And what does the Lord require of you? To act justly and to love mercy, and to walk humbly with your God.
John 14:19 Jesus said: Because I live, you also will live.
|
|
|
|
|
Joined: Sep 2006
Posts: 50,545
Legend
|
|
Legend
Joined: Sep 2006
Posts: 50,545 |
Socialism has never worked at any level as an economic system. In almost every case it has been a social system enforced by a police state on its citizens.
Rarely, if ever, have we seen people trying to immigrate to the Soviet Union, or Nazi Germany, or Communist China, or North Korea, etc. People have come to the US in search of opportunities ...... and they have done so from the start.
You asked when capitalism has been successful, and I answered you. My answer is factual. It has been successful here. Capitalism may not be perfect, but it is far closer to being perfect than any other system. You may not like the answer, but that's no surprise. You look at things in such stark black and white that it's almost scary.
What do you consider to be a successful economic system anyway? What does it look like .... how does it perform ....... what is its structure? How do you, Phil, qualify a system as successful?
Micah 6:8; He has shown you, O mortal, what is good. And what does the Lord require of you? To act justly and to love mercy, and to walk humbly with your God.
John 14:19 Jesus said: Because I live, you also will live.
|
|
|
|
|
Joined: Sep 2006
Posts: 11,465
Legend
|
|
Legend
Joined: Sep 2006
Posts: 11,465 |
Quote:
Socialism has never worked at any level as an economic system.
Neither has free market capitalism, yet you still continue to advocate it.
Quote:
, or Nazi Germany, or Communist China, or North Korea, etc. People have come to the US in search of opportunities ...... and they have done so from the start.
That's all well and good, but the United States never was and currently isn't a free market capitalist economy.
Quote:
You asked when capitalism has been successful, and I answered you. My answer is factual. It has been successful here.
I asked you for an instance in which free market capitalism was successful. You answered the United States, which, as I've pointed out several times, is NOT factual.
To begin with, we were never a free market capitalist state, not even in the 'almost' sense. We're one of the most protectionist governments in history. The thriving industry that you attribute to free market principles was not built on free market principles. It had its roots in free labor (slavery) and assistance from the government in the form of protection and market manipulation.
Yet you refuse to acknowledge that truth, instead pointing out that I'm 'black and white'.
Quote:
What do you consider to be a successful economic system anyway? What does it look like .... how does it perform ....... what is its structure? How do you, Phil, qualify a system as successful?
For starters, I would qualify that the economic system would have to be sustaining ... it would also lead to production and consumption that didn't come at the expense at the greater good of the population (i.e. no slavery, slave-like wages, poor working conditions, lack of forward movement, etc.) It would properly balance tenets of socialism and capitalism, keeping both in restraint in areas where they were counterproductive to the betterment of the society as a whole.
But I think you ask that question in order to deflect from the point that when asked to name one successful implementation of the economic system you continue to tout, you cannot. There isn't a single example of free market capitalism being successful anywhere in civilization.
Your closest example a) wasn't even free market to begin with and b) abandoned its free market elements due to failure.
|
|
|
|
|
Joined: Sep 2006
Posts: 50,545
Legend
|
|
Legend
Joined: Sep 2006
Posts: 50,545 |
From the start of the industrial revolution to the 70s or so, what was the primary aspect of our economy?
If you had to pick out one primary aspect ... the dominant aspect of our economy during that time, what would it be?
Micah 6:8; He has shown you, O mortal, what is good. And what does the Lord require of you? To act justly and to love mercy, and to walk humbly with your God.
John 14:19 Jesus said: Because I live, you also will live.
|
|
|
|
|
Joined: Sep 2006
Posts: 11,465
Legend
|
|
Legend
Joined: Sep 2006
Posts: 11,465 |
Quote:
From the start of the industrial revolution to the 70s or so, what was the primary aspect of our economy?
If you had to pick out one primary aspect ... the dominant aspect of our economy during that time, what would it be?
Keynesian economic theory and policy, predominantly. You could also call it fascism or state-sponsored capitalism, if you'd like. Or lemon socialism.
The collusion of government and private business, in which the government funded, fostered, guided and protected private industry as best it could.
It was used in even our earliest days, and expanded as we went into the Great Depression, WWII and the postwar economic expansion.
It certainly wasn't free market capitalism, if that's what you're attempting to imply.
|
|
|
|
|
Joined: Sep 2006
Posts: 30,844
Legend
|
|
Legend
Joined: Sep 2006
Posts: 30,844 |
Quote:
You keep repeating this fairy tale that unions got a sweetheart deal out of this whole mess. Search "UAW concessions 2009" on Google, and you will see that the union gave ground on virtually every front in 2009.
Yes, they "gave" in most areas. Now, ask yourself WHY they did. Here's why: without doing so, they'd be out of jobs. Perhaps they realized that they had been milking the golden cow too much.
Quote:
They gave up cost-of living wage increases
Had to in order to keep jobs. Other than gov't. jobs - who gets automatic cost of living increases just because?
Quote:
, tuition assistance,
What do people working in a factory - with a basically "guaranteed" job, benefits, etc - why do they need tuition assistance? Especially with what their wages were?
Quote:
various health benefits,
Like viagra, right?Quote:
scrapped the jobs bank (which paid 95% wage for unemployed workers),
Seriously - you call that a concession? Well, actually, I guess it was a huge concession. It was the "not only can you not fire me unless I basically kill someone - if you don't have work for me, you still have to pay me 95% of my wages anyway, and I get to sit in a room and do crosswords, play on my computer, read, or nap for 8 hours a day." Yeah, that was a huge concession. Some might even call it common sense.
Quote:
and lowered the average starting wage tier by half, from about $28 to $15 per hour.
That is/was a concession. Although a starting wage of $15 an hour is still pretty darn good money, isn't it? And who did it affect? NEW members.
Quote:
They also ended up paying more into their health benefits and pensions.
It's called realizing you can't have it all, even if you're a uaw member.
It's called saving your job. It's called "hey, we realize we've been using and abusing the company - and now that we're facing not even having jobs, well, we'll come back to the real world."
This $5000 signing bonus - what the hell is that all about? "dum de dum dum.....uh, we've been working for this amount of money, and if we sign a contract that says we'll keep doing what we were, we'll get $5000, plus more profit sharing.........uh, okay."
If that's not a sweetheart, payback deal, tell me what is.
|
|
|
|
|
Joined: Sep 2006
Posts: 50,545
Legend
|
|
Legend
Joined: Sep 2006
Posts: 50,545 |
Micah 6:8; He has shown you, O mortal, what is good. And what does the Lord require of you? To act justly and to love mercy, and to walk humbly with your God.
John 14:19 Jesus said: Because I live, you also will live.
|
|
|
|
|
Joined: Sep 2009
Posts: 798
All Pro
|
|
All Pro
Joined: Sep 2009
Posts: 798 |
Quote:
It's called saving your job. It's called "hey, we realize we've been using and abusing the company - and now that we're facing not even having jobs, well, we'll come back to the real world."
No one was abusing the poor executives at GM. The company execs sat right across the table from union reps at the negotiations for these contracts and agreed to them. When corporate executives negotiate lavish benefits for themselves, many on here are quick to jump to their defense and say "they work hard, they earned it." But when regular workers negotiate wages, health care, a pension, and tuition assistance for their kids, many raise hell. I will never understand this for the life of me.
If you look at the history of UAW-company relations, you will see a long history of give and take. During profitable times, the union negotiates better benefits and wages. During times of losses, the union usually gives in on many fronts, including mass layoffs. The automotive sector lost 300,000 jobs during the recent crisis, with tens of thousands coming at the big 3 alone in addition to drastic benefit reductions for remaining members. A similar situation arose during the energy crisis in the 1970's.
I have personally experienced this. My father is in a different union, and when things are going good, his union negotiates better compensation. When things are bad, the union gives in on several fronts. It isn't an inflexible situation where the union holds their ground to the point that the whole thing falls apart.
Similarly, the UAW isn't an inflexible beast that drags the auto companies down with it. If you can lay all of this on the UAW, then how can you explain that Toyota, which doesn't have a UAW to contend with and doesn't really provide retirement benefits, also struggled recently to the point that they applied to the Japanese government for loans? The answer is that high gas prices and recession are the major problem. Union benefits are a minor part, or else Toyota would have been completely healthy.
In response to YTown, the reason that GM was saved has nothing to do with "payback to the unions." I will reiterate that payback in the form of drastic benefit reductions and mass layoffs doesn't sound much like payback to me. GM and the other two have a long history of being defense contractors. That is why they were saved relative to other companies. It wouldn't do to have China or India making and developing armored fighting vehicles, or having access to our secrets in a restructuring.
Quote:
This $5000 signing bonus - what the hell is that all about? "dum de dum dum.....uh, we've been working for this amount of money, and if we sign a contract that says we'll keep doing what we were, we'll get $5000, plus more profit sharing.........uh, okay."
That is a carrot in order to get workers to agree to the rest of the contract, which is a turd sandwich for them relative to what they have been getting. This is very common in business. Its also a net win for the company, b/c instead of paying out larger wages or benefits for longer periods of time, they can pay out one lump sum and be done with it. Think about it. Lets say the union negotiated an extra $2 per hour instead of this. That is about $4000 per year as opposed to one lump payout.
Try to help me understand arch. I'm not being a smart ass, I just want to understand you and YTown's perspective. Why is it so evil for people to organize and negotiate with companies so that they can share in the profit when things are going good? Who cares what the form of that compensation is if the company agrees to it? And why when unions do give in when companies are facing losses, why are they attacked as "inflexible weights around the neck of the company?"
|
|
|
|
|
Joined: Sep 2006
Posts: 50,545
Legend
|
|
Legend
Joined: Sep 2006
Posts: 50,545 |
Things aren't "good" though.
GM will never, ever pay back the money they owe the taxpayers under the current system. Never. It simply will not happen. The share price will never rise enough to make repaying the taxpayers possible.
As far as the union ..... the union got a huge share in the new GM. They got their retirement fund funded. The helped drive the company into bankruptcy, (as labor contracts and retirement costs were the primary reason GM went under) yet they got theirs before anyone else did. They were the "preferred creditor" before any suppliers got paid. They were preferred over those who had actually invested their hard earned money in the original GM.
Investors in the company stood in line behind the union. They got a crappy deal in this whole reorganization. Frankly, they got crapped on. Oh well .... they're "rich" ... right? The people I know locally who had GM stock would be surprised to hear that. Their stock nosedived in value ..... then the government stuffed them into a little tiny corner and said "take it or leave it". Yea.
Anyway .... GM hasn't really made a profit yet. Oh, I know that's what they say .... but they really haven't. They haven't paid back their loans either. They used money from one of the government's pockets to pay back the other pocket. The taxpayers will never see their money back either. Not unless the stock price more than doubles ..... and that looks unlikely at best.
No one should have received anything in the way of pay increases or benefit increases until the taxpayers are paid back. The money going into bonuses and benefit increases is being paid for by those of us who pay taxes. We lose, the union wins. Yea. You can talk about how the union "gave back" along the way ..... but I don't give a damn about that. They survived. They kept their jobs. If it weren't for the taxpayers bailing them out, they would not have done so. They had a choice between something and nothing, and they wisely took something. I don't see that as particularly valiant or generous on their part.
At the GM bankruptcy party, the unions got to "get in line" ahead of the taxpayers and investors. It just happened again. Yeah, I have a problem with that. No one should see increased pay and/or benefits until every penny of taxpayer money is paid back. I don't think that is too much to ask for.
Micah 6:8; He has shown you, O mortal, what is good. And what does the Lord require of you? To act justly and to love mercy, and to walk humbly with your God.
John 14:19 Jesus said: Because I live, you also will live.
|
|
|
|
|
Joined: Sep 2009
Posts: 798
All Pro
|
|
All Pro
Joined: Sep 2009
Posts: 798 |
Quote:
As far as the union ..... the union got a huge share in the new GM. They got their retirement fund funded. The helped drive the company into bankruptcy, (as labor contracts and retirement costs were the primary reason GM went under) yet they got theirs before anyone else did. They were the "preferred creditor" before any suppliers got paid. They were preferred over those who had actually invested their hard earned money in the original GM.
Show me the data that the union is the primary reason GM went under. Why did foreign companies experience similar distress even without unions involved? For example, Toyota had to go to the Japanese government for loans to stay afloat, yet they have much weaker unions and very little retirement benefits. I'm not going to deny that the union played some role here, but it is disingenuous at best to lay all the blame at the feet of the union. IMO, the primary factors were high gas prices, recession, and slow movement away from gas-guzzling products.
Quote:
Investors in the company stood in line behind the union. They got a crappy deal in this whole reorganization. Frankly, they got crapped on. Oh well .... they're "rich" ... right? The people I know locally who had GM stock would be surprised to hear that. Their stock nosedived in value ..... then the government stuffed them into a little tiny corner and said "take it or leave it". Yea.
No one won here. There wasn't a line where the union members got golden Cadillacs and investors got hit with a hammer. Everyone got a crappy deal. Tens of thousands of union members lost their jobs. The ones who remain got drastic benefit reductions. Same for white collar, non-union members. Investors got hit hard, but so did investors in almost every sector of the economy. A financial crisis this severe does not result in wins for anyone anywhere. I still don't get how this could have been done so that this would have been more fair to investors? But that just might be that I really don't know what happened to investors.
Quote:
GM will never, ever pay back the money they owe the taxpayers under the current system. Never. It simply will not happen. The share price will never rise enough to make repaying the taxpayers possible.
How on earth can you possibly know this? This is total conjecture at best.
Quote:
No one should have received anything in the way of pay increases or benefit increases until the taxpayers are paid back. The money going into bonuses and benefit increases is being paid for by those of us who pay taxes. We lose, the union wins. Yea. You can talk about how the union "gave back" along the way ..... but I don't give a damn about that. They survived. They kept their jobs. If it weren't for the taxpayers bailing them out, they would not have done so. They had a choice between something and nothing, and they wisely took something. I don't see that as particularly valiant or generous on their part.
How effective do you think workers will be if you tell them "work really hard to make the company profitable, but there will be no pay increases or incentives until we pay back the entirety of the government loans." You have to reward people for their work, or they will stop doing a good job.
And you are making a pretty big assumption that GM will never be profitable again. Just b/c they didn't pay it back in two years doesn't mean it will never happen.
|
|
|
|
|
Joined: Sep 2006
Posts: 11,465
Legend
|
|
Legend
Joined: Sep 2006
Posts: 11,465 |
Quote:
We'll agree to disagree.
Fair enough.
But next time you advocate free market capitalism, I will again question why you're touting a system that has failed at every attempt in the history of civilization.
|
|
|
|
|
Joined: Sep 2006
Posts: 50,545
Legend
|
|
Legend
Joined: Sep 2006
Posts: 50,545 |
And I'll wonder why you refuse to see what's right in front of your nose.  OK, Done now.
Micah 6:8; He has shown you, O mortal, what is good. And what does the Lord require of you? To act justly and to love mercy, and to walk humbly with your God.
John 14:19 Jesus said: Because I live, you also will live.
|
|
|
|
|
Joined: Sep 2006
Posts: 50,545
Legend
|
|
Legend
Joined: Sep 2006
Posts: 50,545 |
The only way, as the government loans were constructed, for GM to pay back the initial loans was through the sale of stock. The government basically bought GM ..... and they (we) own it to this day.
The US Treasury did sell off some of their stock. The high point was $39.06/share. Right now GM is trading at about $22/share.
Currently GM owes the union (somehow) almost $2.5 billion for health care plans. Yeah ... somehow GM came out of bankruptcy owing the union billions of dollars. Everyone else got stiffed ...... from stockholders in the original GM, to suppliers .... to dealers ..... but the union ... well, they got theirs. Oh ... and the union gets something like 9% interest on that loan as well.
Remember when there was huge excitement about GM repaying their TARP loans well ahead of schedule? Well, it turns out that the government basically repaid themselves out of a different TARP fund. Yea.
The taxpayers were on the hook for something like $50 billion bailing out GM. (Not counting the Union funds and loans)
The taxpayer share of GM started out at 61%. Today we, the taxpayers, own about half of that. GM has paid back something like $12-18 Billion of the initial TARP funds. It is unclear whether this includes the paper shuffling "repayment" of the earlier mentioned TARP fund.
So the minimum the taxpayers are on the hook for is around $30 billion. I do believe that the shuffling of TARP loans means, however, that the number is closer to $39 billion.
GM stock opened at around $26/share at the IPO. It went up somewhat from there, but has plummeted to $22/share. If their initial sale of half of their shares brought between $11-20 billion at $26/share ..... then they're gonna have to bring between $40-55/share to bail the taxpayers out. That doesn't seem likely anytime soon.
Even using my very limited understanding of where the market is headed, then it really seems unlikely that we'll ever see our money back. GM itself owes tons of money to the union ...... so they are really starting back down the same road they just got off of. There are improvements because of reduced brands, reduced number of dealers, and fewer factories .... but the new contract guarantees people jobs .... reopens factories whether we go into an economic boom or a real depression, and many other things that helped GM down the road to fiscal ruin the first time around.
Micah 6:8; He has shown you, O mortal, what is good. And what does the Lord require of you? To act justly and to love mercy, and to walk humbly with your God.
John 14:19 Jesus said: Because I live, you also will live.
|
|
|
|
|
Joined: Sep 2009
Posts: 798
All Pro
|
|
All Pro
Joined: Sep 2009
Posts: 798 |
Quote:
Currently GM owes the union (somehow) almost $2.5 billion for health care plans. Yeah ... somehow GM came out of bankruptcy owing the union billions of dollars. Everyone else got stiffed ...... from stockholders in the original GM, to suppliers .... to dealers ..... but the union ... well, they got theirs. Oh ... and the union gets something like 9% interest on that loan as well.
I'm no expert in bankruptcy law. But my guess is that legal contracts GM had were forced to be honored even after restructuring. GM had a legal contract with the union; thus they had to ultimately honor it. Stock is not a legal contract that entitles the investor to guaranteed profits. It is a risk that an investor takes. Same goes for bondholders.
And as far as suppliers and dealers, I would imagine that the bankruptcy court made GM pay out any debts that were on the books for anything that had been delivered. Beyond that, what else could be done? Do companies generally make a deal with suppliers that "we will buy X amount of supplies for 10 years?" I would think its more flexible to respond to supply and demand. So I don't really see what legal contracts GM failed to meet here.
I feel terrible for all involved. Your dig earlier that implied that b/c the investors were "rich," that I don't care is crap. I wish none of this ever happened. I wish the global economy hadn't slowed. However, you are chasing a strawman. You want so badly to blame the union for all of this that you aren't bothering to look at what really happened here.
No resolution of this situation was going to allow GM to ignore its obligations made via contracts in the past with union members. Also, no resolution was going to keep production and sales going that supported stock prices, suppliers, and dealerships. If the government stood by, the likely outcome would have been that GM became a foreign company. The big 3 are large defense contractors as well as 3 of the most visible, symbolic American corporations. There is no way they would be allowed to fail, whether or not they were unionized. Bush extended the first bridge loans to GM, and no one can accuse the Bush administration of being pro-labor. There is very little evidence that this was simply a political payback.
Quote:
Even using my very limited understanding of where the market is headed, then it really seems unlikely that we'll ever see our money back. GM itself owes tons of money to the union ...... so they are really starting back down the same road they just got off of. There are improvements because of reduced brands, reduced number of dealers, and fewer factories .... but the new contract guarantees people jobs .... reopens factories whether we go into an economic boom or a real depression, and many other things that helped GMßdown the road to fiscal ruin the first time around.
That money owed to the union is part of a legal contract. Of course they have to honor past contracts. New hires come in at much lower wages, with more cost sharing in their health and pension benefits, and with significantly reduced other benefits like the jobs bank (which wasn't a good idea anyways) and tuition assistance. That's not even close to the path they were on 5-10 years ago.
|
|
|
|
|
Joined: Sep 2006
Posts: 30,844
Legend
|
|
Legend
Joined: Sep 2006
Posts: 30,844 |
Quote:
Do companies generally make a deal with suppliers that "we will buy X amount of supplies for 10 years?" I would think its more flexible to respond to supply and demand.
Probably not.
But contracts with the uaw are just that: Okay, we'll pay you X, get your health benefits, your retirement, etc"........but for the longest time, the uaw didn't give a rip about how the company was doing - just as long as they got theirs.
I have a neighbor that brags after every contract: "Well, they can't get rid of me. I'm set."
And then he buys a boat, or builds a pond. He lives paycheck to paycheck. And he doesn't care. His thoughts? "they can't get rid of me. 8 more years and I'm done working. They'll take care of me."
|
|
|
|
|
Joined: Sep 2006
Posts: 50,545
Legend
|
|
Legend
Joined: Sep 2006
Posts: 50,545 |
Actually, the government and the UAW redid their contracts. The UAW contracts receive no favored status in a bankruptcy. If GM had gone bankrupt and been liquidated, the union would have been out of luck. The government rescued the union as much (or more) as they rescued GM.
Micah 6:8; He has shown you, O mortal, what is good. And what does the Lord require of you? To act justly and to love mercy, and to walk humbly with your God.
John 14:19 Jesus said: Because I live, you also will live.
|
|
|
|
|
Joined: Sep 2009
Posts: 798
All Pro
|
|
All Pro
Joined: Sep 2009
Posts: 798 |
Quote:
Actually, the government and the UAW redid their contracts. The UAW contracts receive no favored status in a bankruptcy. If GM had gone bankrupt and been liquidated, the union would have been out of luck. The government rescued the union as much (or more) as they rescued GM.
Yes they did. I was wrong there. However, the contracts were redone tilted way towards the company's healthy balance sheet when compared to past agreements. There is no denying that. There is more incentive based profit sharing rather than iron clad wages. More cost sharing in health and pensions. Excessive programs like the jobs bank were ended. These are all the things you guys beg for, and when they happen, its still not enough. Do we need to go so far as eliminating any leverage workers have and getting wages down to the $0.90 per day paid in China?
I mean I list all these things, and all you guys can say is "the union survived, so its not satisfactory to me." Union members are just as much people as the investors you talked about are. And the difference is that GM is their livelihood, their primary source of income. For investors, GM is probably important to their portfolio, but is likely only a small part. It also isn't likely their main source of income.
I actually see this as a situation where there was healthy agreement b/w the two sides that will benefit both. Not an agreement that favors the union at the expense of GM management and future investors.
|
|
|
|
|
Joined: Sep 2006
Posts: 15,015
Legend
|
|
Legend
Joined: Sep 2006
Posts: 15,015 |
Quote:
. Do we need to go so far as eliminating any leverage workers have and getting wages down to the $0.90 per day paid in China?
Nothing like extreme's.
Last I checked I didn't make .90/hr and I am not affiliated with a union either. Guess I must be getting slave wages then, and don't even know it.
We don't have to agree with each other, to respect each others opinion.
|
|
|
|
|
Joined: Mar 2007
Posts: 809
All Pro
|
|
All Pro
Joined: Mar 2007
Posts: 809 |
Quote:
We signed up with a local credit union a couple years ago. No fees on the account unless we don't meet the minimum monthly requirements -- one direct deposit, 12 debit card transactions, and another one I can't recall at the moment. We have never failed to meet those conditions AND they pay us something like 4% interest per month when we do meet the terms. I don't get it...they are paying US for banking with them and not making a dime.
I love it!!
. These types of products are provided by a 3rd party vendor called BancVue ... You can go to their website to www.bancvue.com to find a bank in your area... 4% is not uncommon. BancVue works with 1300 community banks and credit union coast to coast.
![[Linked Image]](http://www.dawgtalkers.net/uploads/captainphil/browns bills sig 5.jpg) When it gets cold and snows and the wind blows, you gotta be able to run the ball. - TR
|
|
|
|
|
Joined: Sep 2009
Posts: 798
All Pro
|
|
All Pro
Joined: Sep 2009
Posts: 798 |
Quote:
Nothing like extreme's.
Last I checked I didn't make .90/hr and I am not affiliated with a union either. Guess I must be getting slave wages then, and don't even know it.
I guess I did get a little too worked up, huh? I am not afraid to admit that was a stupid, extreme comment I made. Shouldn't have said it.
|
|
|
DawgTalkers.net
Forums DawgTalk Tailgate Forum Dick Durbin vs. Bank of America
|
|
