Let me be clear: "The United States government has no interest or intention of running GM." – President Barack Obama
And then Obama forced GM CEO Rick Wagoner to resign, told Chrysler it has to merge with Fiat or go into bankruptcy, and told GM it better restructure or it will go into bankruptcy too. link
The government IS running GM, and Chrysler too. Here is what the government wants it's auto companies to do:
"I am absolutely committed to working with Congress and the auto companies to meet one goal: The United States of America will lead the world in building the next generation of clean cars." – President Obama
By "clean cars," Obama means cars like GM's Chevrolet Volt, an electric car with a small internal combustion engine that will be used only to recharge the Volt's battery. There's one tiny problem with the Volt – the compact four seater will cost an estimated $40,000, pricing itself out of the market. There is one way for the Volt to be competitive, however. If gas prices skyrocket far beyond the current level of $2.00 per gallon, the Volt becomes a more attractive option. If gas prices stay low, well, India is producing the Nano, a car that will sell for $2,900. Which car do you think will sell more if gas is two bucks ? If Obama truly wants to revolutionize the auto industry, he has to force gas prices through the roof. Wait for that to happen. It won't be long.
Obama says neither GM nor Chrysler currently have viable business plans. He's probably right about that. Obama has given GM 60 days to come up with a new business plan that requires concessions from all involved. He's given Chrylser 30 days to work out it's merger with Fiat. The White House has sent government teams in to assist in formulating the new plans (but the government isn't running the auto companies. Right).
Also, guess who's paying for GM and Chrysler's warranties during this indefinite restructuring period ? YOU are, Mr. and Mrs. American Taxpayer:
A fund will be set up equal to 125 percent of the total cost to pay for warranty service. The automakers will contribute 15 percent while the government will provide 110 percent, with the money coming from the economic stabilization funds. A separate company will hold the funds and pay the claims even if one of the auto manufacturers goes into bankruptcy or goes out of business.
It sounds to me like GM and Chrysler are probably going into bankruptcy. Why else would the government need to back their warranties ? If this is the case, we could have saved the taxpayers over $20 billion in auto bailouts by putting the companies into bankruptcy last fall. Oh, well. What's $20 billion these days ? Chicken feed. We talk in trillions now. Our government is very adept at running businesses.
Finally, word is that when GM's outgoing CEO Wagoner was forced to resign, his retirement plan kicked in to the tune of $20 million. Sweet. Wagoner gets $20 million after his company lost $80 billion over the last four years. I don't know if I'm supposed to be outraged about this or not. I'm outraged about so much these days that outrage seems like the normal state. Maybe I'll call Rep. Barney Frank (D-MA) so he can tell me how I should feel. Frank has already threatened AIG workers, so he seems like the guy to ask. My pitchfork is sharpened and ready for action. I'll try to get Rick Wagoner's home address so we can form a mob to foment violence against his family, like that ACORN group did to the AIG people. It's the new American way.
{ 14 comments… read them below or add one }
We will be seeing a lot of ACORN in the news, King. They will be protesting and the media will be covering them as the peoples voice even though they are the voice of George Soros and the liberal political machine. The scarey thing is if you ask the average America, they don't care nor do they understand what is happening or the resaon behind the protests. Another aspect of the people that Marx relied upon when grooming the people of russia for communism. Many are learning and they won't go down without a fight.
Barack Obama asks a GM CEO to leave? Is he appointing his own guy to take over? Especially since the reason they lost so much is because of govt actions that caused low consumer sentiment and the unions unwillingness to bend to make their companies competative. How long has the Big 3 been offering early retirement programs? Why? To trim their budgets and to help their employees. But instead of taking advantage of the huge favor the company wanted to give them(ie: education, thousands of dollars etc) those sheep just kept walking toward to the cliff even though the writing was on the wall. This is a mess. But Obama will get us through, praise him(church music in the background)
Obama appointed GM's Chief Operating Officer as the new CEO. His first name is Fritz. Can't remember his last name. The Obamans also kicked out the CEO's of AIG, Fannie Mae, and Freddie Mac when they took over. It's all for show, especially so in the cases of Fannie and Freddie, whom the government was directing to act as they did. I've heard that the government wants to replace the entire GM board.
Now, Fedzilla is pushing legislation through Congress to regulate the pay of ALL employees of companies that receive government assistance.
http://www.washingtonexaminer.com/politics/Beyond-AIG-A-Bill-to-let-Big-Government-Set-Your-Salary-42158597.html
"Obama appointed GM's Chief Operating Officer as the new CEO. His first name is Fritz. Can't remember his last name. The Obamans also kicked out the CEO's of AIG, Fannie Mae, and Freddie Mac when they took over."
Does anyone see a problem with this practice?
Politics merging with business. What could possibly go wrong ?
Except for everything. Politics mixing with business is why the financial industry got so out of wack in the first place.
LOL HAHAHAHAHAHAHAHA
"Politics mixing with business is why the financial industry got so out of wack in the first place."
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
Yeah that's what happened
I'm with Red.
You guys can cover your eyes all you want but govt is the problem. Govt through legislation allowed and encouraged them to do what they did. This whole thing is their fault.
For those of you that don't understand why the congress is at fault: If a law is passed that says lenders must write loans that don't meet standard underwriting practices so that more people can buy property
and that Freddie and Fannie will buy these loans and that if the lenders don't write these loans they will be sued in federal court, then who's at fault?
Excellent argument, DumbRedNeck. I bet you were on the debating team in high school.
Where do you think subprime loans came from ???? The banks didn't create them. The government LEGISLATED them into existence. They were ILLEGAL prior. How about Fannie/Freddie ? The government created them too. Check the Monetary Control Act, the Community Reinvestment Act, the Community Reinvestment Act update, Gramm-Leach-Bliley, etc, etc, etc. Government is up to it's ears in this financial crisis. The ENTIRE idea to construct creative ways to give loans to unqualified persons came via government mandates.
But your HAHAHAHA argument is compelling too. You got the Reverend to agree with you.
For the umpteenth time…..while subprime paper contributed to the problem…..conservative guru, Alan Greenspan, said that F&F and subprimes didn't create the financial meltdown. Do you agree with your own conservative experts, or not?
Secondly, it is not true…..not one bit of it…..that mortgage sellers were forced to give loans to people who couldn't possibly afford them. So far, not one example has been set forward by conservatives proving otherwise. Mortgage sellers, mortgage buyers, real estate appraisers committed systemic fraud….that's what happened.
Thirdly, the biggest foreclosure problem came from SPECULATORS. Those who thought they could "flip" a house quickly and make a killing. That's why specific regions in Florida, Texas, Arizona, and California saw home prices double and triple in such a short time…..speculative bubble inflation.
What the feds are guilty of is keeping interest rates too low, too long…..deregulating the paper shuffling industry…..and standing by while a rogue president Bush told the SEC in 2004 that paper shufflers could extend their leverage rules to 30-1 from 12-1.
This….
" If a law is passed that says lenders must write loans that don't meet standard underwriting practices so that more people can buy property"
…is way off the mark.
No, I do not agree with "my" conservative experts like Greenspan, who are trying to cover their own butts. In fact, I think Greenspan was part of the problem.
Rev says, "Secondly, it is not true…..not one bit of it…..that mortgage sellers were forced to give loans to people who couldn't possibly afford them"
I've given you all the examples I can of how the bankers were forced into making lousy loans, but you persist in denying the truth. So, I am reduced to saying this about your statement that the banks were not forced (and I worked in the banking industry for fifteen years. You didn't) – Bullcrap. Quit peddling it.
Your essential problem in looking at the financial crisis is this – you are forever attempting to exonerate Democrats and excoriate Republicans, due to your nonsensical partisan loyalty. That is dishonest, and no matter how much spin you engage in, it remains dishonest. As long as you continue to do that, you will never be more than half right.
The federal government (almost all of it), engineered the financial crisis from the beginning. Then Wall Street ran with the ball.
Rev, I was a top agent in real estate for 10 yrs. I understand the process.
A personal friend of mine was in a position of authority with Freddiemac. About 3 yrs. ago she started rejecting 30% of the paper that crossed her desk because the terms were so outrageous. She was given an option. Buy them anyhow or draw your pension. She resigned and at that point became my personal hero of the year. She could easily have put in another 10 years. Since she was also one of the most politically liberal people I know, her action speaks volumes!
throgue,
That's exactly what I witnessed in the banking industry. The banks were making bad loans, and knew they were bad loans. There was so much pressure on them to make them that they went ahead anyway. If they didn't, they were punished by the government in a variety of ways. Then the banks used primarily Fannnie/Freddie to securitize those bad loans. It was a scheme that was destined to fail, and the majority of the government denied reality until it was too late. Barney Frank, head of the House Financial Services Committee, was saying Fannie Mae was in fine shape in June 2008. Ditto for another Financial Services Committee member Maxine Waters, who said critics of Fannie/Freddie were racists. It was all planned, and now the government acts like it had nothing to do with it.
I'll defer to those who worked directly with low-income mortgages.
That in no way changes the fact that F&F and sub-prime didn't cause this problem.
And if they didn't….why do I keep reading stuff from the right that says they did? Why?