BREAKING NEWS! BREAING NEWS! BREAKING NEWS!
We knew it was coming the lifeline that GM and Chrysler so desperately needed along with the supply chain and the rest of our nations economy. Now I am not endorsing the move although with what happened in the financial industry it was necessary, when the Federal Government bailed out that sector, which started this slippery slope that we are now on.
I will always contend that when Treasury Secretary Paulson pitched the idea that the world was collapsing, I found it unsettling and upon further dissection you find that the very nature of bailing out the financial sector has created an enormous economic vacuum. The only people that will come out ahead is the financial institutions that got us primarily in this mess, it doesn't make since. We rewarded horrible ethics and accounting by the institutions in which businesses and consumers rely on and in turn they are not recirculating taxpayer money back into the system and no one is holding them accountable, that was one of the very reason for the bailout to get money flowing back into the system, yet these institutions are buying other banks and not helping the American public. I have written before that we did not need a bailout to make these acquisitions happen, a free market would have corrected the mess, there is precedent, the weak get gobbled up by the strong, their would have been structured bankruptcies people would have still made their payments and the economy would rebound.
But what President Bush and Secretary Paulson did was bail out their buddies on Wall Street to save their fortunes and their jobs, how else can you explain the lack of accountability, lack of a plan and lack of oversight. The financial industry gets access to $700 Billion dollars and no one stops to say, aren't these the guys who got our country into this mess why are they still guiding the ship.
They are demanding more from the automakers who actually make products, that creates jobs, who's products recirculate and get sold again to employ even more people than the financial services industry. Our government is almost in attack mode against labor and the wages and benefits paid to these workers, yet no one blinks an eye at the outrages compensation packages and bonuses paid to Wall Street types over the years. Have you seen what a typical Wall Street broker makes and the yearly bonuses paid to them in comparison to the rest of the nation's wage earners, it's almost obscene, working with other peoples money. Now I don't begrudge someone from earning a bunch of money, I am merely framing the context of what we have been hearing from some folks in Congress and our Senate over the last few weeks.
They are making the claim that the compensation of labor is out of line and did not make the same comparison to Wall Street, let's be fair about an assessment of wages. If Wall Street and bankers can't figure out how to make money with other peoples money and access to the Treasury Department, they do not need to be running these companies period, particularly now that they are exposed to the over hyped balance sheets and numerous ethics violations. The very nature of paying these outlandish salaries and bonuses on fictitious balance sheets is criminal in my mind, particularly when companies and individuals entrusted there hard earned money to these financial institutions that charge them for using there money.
So GM and Chrysler got a short term lifeline and that should last until March 2009, when a formal plan is expected to outline their future plans to turn these companies around. As expected Ford Motor Company did not participate in any immediate funds and is not expected to need any in the next few months, however as they have said that if GM or Chrysler fails they would most certainly need an infusion of cash.
General Motors received $9.4 billion and Chrysler $4 Billion Dollars, the government is calling for massive restructuring among labor, dealers among other measures it also includes the appointment of a Car Czar , which is expected to be Secretary Paulson (the absolute wrong choice), President elect Obama will have the opportunity to make his choice while the administrations transitions.
While under the current collapse of the economic framework of the Worlds economy, the decision to provide loans to the auto industry is merited, it is of my strong opinion that much of the future impact could have been softened if free market forces would have been exercised and allowed to work.
Enjoy Today!
That Car Guy
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