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Originally Posted by MrIcky
1 Help as many otherwise screwed Americans as possible. By keeping GM afloat, millions of Americans keep their jobs.
OK, I'm with you here- but my philosophy is more along the teach a man to fish vs the fish for a day concept. Earmark the money to modernize into flex plants, coerce dropping non-productive plants. Defer new CAFE standards but tie the development to more future proof engines.
2 Protect American businesses. The US needs that money to pay for government programs and policies, including the military and federal expenses.
Pelosi is exploring the idea of basically printing money to prop up GM as status quo. So you are then stating we need that to continue tax revenue. Well why not just give the Big 3 a 2 year tax deferment? By printing money we devalue the dollar decreasing your buying power (inflation?). At least in 79 they had a clear law. If they do this like TARP then there is minimal oversite and the plan can be changed on a whim. Honestly, if TARP doesn't prove to you why we need very clear legislation and restructuring with any aid to GM, then I'm at a loss.
3 Be fair to the market as a whole. As someone who supports American hegemony in the international system, I believe that the US should protect some of its businesses before allowing companies that make less than genius market decisions to fail. In a purely capitalist system, GM should fail for not following the market and making too many SUVs, but that would terminate the employment of millions of Americans and kill enormous amounts of tax revenue. I care less about the world market than I care about American jobs (see 1) and American businesses (see 2). If I were Italian, I'd say that I want to protect Italian jobs and Italian businesses as a priority over the world.
American Hegemony maintained through government protectionism and Fair to the market as a whole are mutually exclusive by definition.
That being said, I'm not against supporting Ford and GM. I want Ford and GM to have plans on how they will be competitive again in 2-5 years and I want any money to be tied to specific performance of plan items. I do not have faith that Wagoner will use the money wisely. Don't tell me he'll use it wisely, give me a plan that shows how.
I want to make one very big point, so forgive me for yelling: WE'VE SEEN THIS COMING SINCE THE EARLY 80s!!!!! But even seeing that this was coming, GM has been notoriously labeled as one of the most risk-adverse companies to ever exist. Saying that Wagoner et al. don't want to lose their job is not the same as saying they know how to keep it.
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We could teach GM to fish if only our public officials knew how to run a business. You know as well as I do that elected officials are basically Americans who win popularity contests—I mean elections—based on political affiliation, name recognition, and a little bit of policy. They don't know how to run a big company, so we can only hope that professionals who have done this all their lives can do a better job.
I like your idea of a tax deferment.
That could make an enormous difference. I don't like the idea of printing money. That's part of what got the Weimar Republic in trouble after WWI. It creates enormous amounts of inflation.
I strongly believe that we need to support large American companies that dominate the market if the US intends to stay a dominant economic power. GM is one of the largest. If another enormous car company pops up and a market crisis hits the world, I'll support protecting that company in the face of a depression.
I understand your frustration with the GM of the 1980s. I feel that period of time is a large black streak on GM history. Fortunately, the same executives that "don't know how to keep" their jobs are the ones that designed critically acclaimed cars like the Malibu. They know what they're doing. This market crisis prevented that from shining through. If this crisis happened in 2011, then we would have seen the successful profit from this year, next year, and the year after that; GM taking back the number 1 spot from Toyota under positive market conditions; successful product releases, including the Volt, Cruze, and Camaro; cost reduction in 2010; working within EPA and CAFE regulations. GM is doing its job. For us to accept government involvement in industry at all, we would be hypocrites to reject government loans to companies that keep America running. I guarantee you that GM can get through this with great success if we just help a little bit. We'd be doing a whole lot less than the rest of the world, if that makes anyone feel better.