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Government aid of GM was not a one-to-one benefit, as it may have appeared on the surface. If GM failed the effects would not have been limited directly to thei

by jeromec 17y ago

Government aid of GM was not a one-to-one benefit, as it may have appeared on the surface. If GM failed the effects would not have been limited directly to their workers. Unfortunately, thousands of dealerships rely on the viability of General Motors. That includes salespersons up to managers and owners. It also includes the parts industry which is sizeable itself, so we're talking many thousands of jobs indirectly connected to GM additionally lost. Worse still, would have been the timing. A big reason the credit markets were freezing up and the stock market was tanking was psychological - people thought things would get worse. Think about a stock market crash, which is essentially everyone selling and nobody buying. The selloff doesn't happen right away; buyers turn into sellers because everybody is selling, which can lead to the whole thing crashing.

zaidf 17y ago
That includes salespersons up to managers and owners If they can't find another job, pay them directly too. What you are saying is that it's okay to pay a buncha money to stupid executives to distribute it to everybody down the chain. I disagree. I dont think we need the execs to hand out money.
- jeromec 17y ago
  You're saying the govt. should directly pay the thousands of affected people, at various income levels, directly? They can sit and watch tv and still make their salary? That won't fly with many fellow citizens. Remember, the "stupid executives" did not get the money, GM did (and taxpayers got shares in GM in exchange). The stupid executives are already wealthy, and would probably end up at some other company owned by a friend or whatever. You would not have punished them, but you would have punished GM's shareholders, the wider stock market, and likely the wider economy which depends on jobs and consumer spending to function.
  - zaidf 17y ago
    They can sit and watch tv and still make their salary? I would rather they do this than give GM money to pay employees for a job that is doomed to disappear soon as gov money runs out. The gov is doing no favor to these folks by bailing them out via GM because until they are with GM, they think their job is secure. I'd rather these guys get a check for their GM salary each month from the government for doing nothing. Every check will be a reminder that before it stops coming(basically before the money alotted to GM runs out), the dudes better learn something that can pay. The stupid executives are already wealthy Very far from truth. There are many many stories of execs having a hard time finding a typical job, let alone another exec position. My Dad moved to Michigan couple years ago and the house market was full of mansion-like homes at fraction of a cost due to an exec who could no longer afford it. you would have punished GM's shareholders How would this punish shareholders? Last I knew, the stock market did not work under the assumption that the gov will bail out your company. In fact, the gov bailing out GM is punishing the hundreds of millions of non-GM stockholders whose companies are not being bailed out. GM stockholders made a bad investment if it goes down under. It won't be the first time or the last time that happens to a public company. jobs and consumer spending to function. Totally with you on this. I just don't think you need to keep GM alive to address this. In fact, I believe keeping GM alive is just digging a deeper hole for the near future.
    - jeromec 17y ago
      Who said GM is going to disappear? Part of the govt. assistance was a restructuring of the company to be a viable business. Regarding executive compensation, GM CEO Rich Wagoner (who was ousted by the way) earned 1.5M in 2007, and will receive over 20M in pension by leaving GM. You don't call that wealthy? Regarding the GM shareholders I agree with you; they took the risk of investment, but the rest of my statement stands, which is that the collapse would have punished many people not responsible for the mismanagement of GM.
CapitalistCartr 17y ago
The government could create approximately 2,000 direct jobs and 2,000 indirect jobs per billion dollars spent on short-term roads and similar such projects. For the money spent on GM alone, we could have had much more bang for our dollars spent. Especially considering when you spend on credit, the interest haunts you. Projects already far along in the queue typically have much of the planning and engineering already done, and sucking up low-cost labor puts upward pressure on most of the labor market above that price. Short-term projects quickly take up people, putting money in the immediate economy. The effects tend to be seen quickly. Better transportation and communications infrastructure improves the local economy long-term, and there are so many such projects the federal government could fund them for the next decade easily.
- jeromec 17y ago
  Those types of jobs were included in the 700 billion dollar Economic Stimulus Bill.

by jeromec 17y ago

zaidf 17y ago

That includes salespersons up to managers and owners If they can't find another job, pay them directly too. What you are saying is that it's okay to pay a buncha money to stupid executives to distribute it to everybody down the chain. I disagree. I dont think we need the execs to hand out money.

jeromec 17y ago
You're saying the govt. should directly pay the thousands of affected people, at various income levels, directly? They can sit and watch tv and still make their salary? That won't fly with many fellow citizens. Remember, the "stupid executives" did not get the money, GM did (and taxpayers got shares in GM in exchange). The stupid executives are already wealthy, and would probably end up at some other company owned by a friend or whatever. You would not have punished them, but you would have punished GM's shareholders, the wider stock market, and likely the wider economy which depends on jobs and consumer spending to function.
- zaidf 17y ago
  They can sit and watch tv and still make their salary? I would rather they do this than give GM money to pay employees for a job that is doomed to disappear soon as gov money runs out. The gov is doing no favor to these folks by bailing them out via GM because until they are with GM, they think their job is secure. I'd rather these guys get a check for their GM salary each month from the government for doing nothing. Every check will be a reminder that before it stops coming(basically before the money alotted to GM runs out), the dudes better learn something that can pay. The stupid executives are already wealthy Very far from truth. There are many many stories of execs having a hard time finding a typical job, let alone another exec position. My Dad moved to Michigan couple years ago and the house market was full of mansion-like homes at fraction of a cost due to an exec who could no longer afford it. you would have punished GM's shareholders How would this punish shareholders? Last I knew, the stock market did not work under the assumption that the gov will bail out your company. In fact, the gov bailing out GM is punishing the hundreds of millions of non-GM stockholders whose companies are not being bailed out. GM stockholders made a bad investment if it goes down under. It won't be the first time or the last time that happens to a public company. jobs and consumer spending to function. Totally with you on this. I just don't think you need to keep GM alive to address this. In fact, I believe keeping GM alive is just digging a deeper hole for the near future.
  - jeromec 17y ago
    Who said GM is going to disappear? Part of the govt. assistance was a restructuring of the company to be a viable business. Regarding executive compensation, GM CEO Rich Wagoner (who was ousted by the way) earned 1.5M in 2007, and will receive over 20M in pension by leaving GM. You don't call that wealthy? Regarding the GM shareholders I agree with you; they took the risk of investment, but the rest of my statement stands, which is that the collapse would have punished many people not responsible for the mismanagement of GM.

CapitalistCartr 17y ago

The government could create approximately 2,000 direct jobs and 2,000 indirect jobs per billion dollars spent on short-term roads and similar such projects. For the money spent on GM alone, we could have had much more bang for our dollars spent. Especially considering when you spend on credit, the interest haunts you. Projects already far along in the queue typically have much of the planning and engineering already done, and sucking up low-cost labor puts upward pressure on most of the labor market above that price. Short-term projects quickly take up people, putting money in the immediate economy. The effects tend to be seen quickly. Better transportation and communications infrastructure improves the local economy long-term, and there are so many such projects the federal government could fund them for the next decade easily.

jeromec 17y ago
Those types of jobs were included in the 700 billion dollar Economic Stimulus Bill.