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Most people have a very simplistic view of the GM bailout, it was not like the bailout of the banks. GM was allowed to fail, shareholders and senior creditors
by linuxftw 8y ago
Most people have a very simplistic view of the GM bailout, it was not like the bailout of the banks. GM was allowed to fail, shareholders and senior creditors took a loss in favor of unsecured creditors (Union Pensions were stuffed with GM funny-money bonds). The feds completely disregarded the law and simply did what they thought was politically expedient (bailing out the unions).
What should have happened: GM Fails, GM assets inevitably acquired by someone else. Business involves risk, taxpayers shouldn't subsidize that risk.
- cryptonector 8y agoA voice of reason. Thank you. Yes, liquidation is the answer when the patient is insolvent and bankrupt. In a systemic crisis, however, our bankruptcy courts cannot move fast enough. That is a problem that needs to be tackled, otherwise scared politicians will always have enough time to reach for bailouts.