so here we have law-abiding american citizens-lawyers and investors - scared for their lives and denied the right to due process due to the president strong-arming them. people defending this are likely some of the the same ones that cried for due process and habeas corpus for the prisoners at guantanamo bay. simply because its obama's idea. the government is in place to represent the free republic people. you know, us, not the other way around. this is an excellent observation and one that escaped me. I wouldnt want to be one of this guy's clients though. Unless he remained anonymous.
Much of this is plausible in normal times. These are NOT normal times. The US economy suffered a Pearl Harbor in Sept. 08, and the war of the economy continues today. So says Warren Buffet. Corporations manage themselves differently in good times vs. bad times. In good times you take on debt to expand, but not so much debt that you can't pay it back if the economy backs up (if you're smart). The govt. manages the US economy to a significant degree. It manages both the fiscal and monetary policy of the govt. which have big effects on the economy (would there have been as big a housing bubble without 1% interest rates in 03-04? No.). The govt. does not operate the same if the economy is on an even keel as it does when the economy is in distress, and it does not operate the same when the economy is in distress vs. when it is EXTREME DISTRESS. It does act different and it should act different because the situation is very different. Business change their strategy and operation plan to deal with different conditions that present themselves, and govt. does the same if its smart. You are the president. We have a systemic crisis in the economy that started in housing, crippled banking, and is close to destroying the auto industry in america. We've pledged 700 billion to the banks, and it may take 30 billion to save GM and Chrysler. Without the subprime mortgage abuses, bank implosions and subsequent slowdown nationwide, the automakers would still be solvent. Do you: 1) watch while this odd circumstance tears down a major part of the nations economy and destroys, oh 100,000 jobs, or 2) step in and twist some arms if necessary to get a deal done with Fiat to save Chrysler temporarily and help GM restructure? The problem I have with your post is that you don't recognize the systemic crisis in the economy, and propose managing the situation just like the macro environment is normal, but it is not. I'll give you a dramatic example that shows you need better discrimination of the macro environment. Did you see "Schindler's List", about the German businessman who employed Jewish slaves in WWII to make war tools for the German Army. He intended to make a profit. Eventually he gave up any pretense of making a profit, and spent all of his money to employ more Jews and save them from the concentration camp. And how does that compare to your admonition: How you act in business depends at times on whether the macro environment is normal, or not. That is what you are not accounting for. What you advocate is legal, but that does not make it the right thing to do. You mention me buying bonds for .10 and getting .20 later, and criticizing the hedgies. I did not do the same thing as the hedgies. I bought my bonds in bankrupcy, I didn't force anyone into bankruptcy. I had no collateral, I was an unsecured creditor. But I knew Seven Eleven had hundreds of stores (some profitable) and hundreds of lots that could be sold off. It was a situation that was going to happen, and I just went along for the ride. Regarding this statement of yours: Do you know what the union is getting, and what it may be worth. I've looked, and I can't put a value on it. The union is getting NO CASH. They get 55% of the stock in a company that may or may not survive, and a NOTE in their benefits account for 4 billion dollars (marked down from 10 billion) from the new Chrysler corp. So, what value to you put on that? If you can come up with .50 to the unsecured debtors (UAW) vs. .33 to the secured, please show me how you come up with it, I don't see it. Would you give the UAW 3 billion in cash for their 4 billion dollar note from new Chrysler today? Please explain why, and I'll tell you I would not offer them .75 on the dollar for that note.
And the problem I have with all of this is that you, like Barack, can't see the forest for the trees. Yes we are in a dire financial situation but not one that send us into a depression, that possibility was killed with the bailout of the financial industry. You say we most focus on this situation and not let it get out of hand while I say, we need to think about the long term ramifications of our actions. You do realize that we have to pay for all the money we're spending and we need the hedge funds to take on the systemic risk that we have created as was pointed out above. The truth of the matter is, we have to pay the piper. We're in for a rough landing and if we keep artificially putting it off by enabling unviable companies and changing the law of free market capitalism then we risk creating something that we can't walk away from. Not trying to get high and mighty here but I actually find this to be very offensive. Saving peoples lives and saving nest eggs/jobs are not even close to the same thing. And even if this was the same thing, this is one person, doing something with his money. Not one person, taking money from one group and giving it to another. I would drop this. I see, and the president in times of economic peril should decide what the best thing to do is. Please look up democracy and capitalism, they are fascinating topics. You miss the point. You made a deal, and when the chips fell and you got a better deal than others, you took your profits and didn't try to make those with losses whole. It's exactly the same thing. Do you know what the union should be getting, along with all other junior creditors. Absolutely nothing. That's the deal they made. Not only that but the hedge funds and other senior creditors offered to take a 40% haircut and you still feel like that isn't enough? Are you kidding me. They are putting the economy and the health of our nation first by giving up 40% of their investment. We can't mortgage our future, and we can't change the way our economy and government works out of fear or anger.
yes, the prez should, in large measure, decide what the best thing to do is. capitalism and democracy doesnt mean the people get to decide what to do, they mean that the people get to decide who decides. if he does a bad job, people wont vote him in next time. if he breaks the law (ok, in a big way), he will be held accountable (unless the next adminstration is pressured into being "bipartisan" and "looking forward").
You have got to be kidding. "FREE MARKET" economy isnt decided by one individual, entity or group. What you are talking about is dictatorship. :dis:
he's a president, not a figurehead. he is supposed to make some big decisions and shape policy. dictators arent elected, or if they are, they dont allow themselves to be voted out later.
He doesn't get to decide on his own. He can lobby, influence, cajole, arm twist, beg and charm to get his way, but there are other branches of government, especially the legislative branch, who are supposed to represent the people, that have a say in such matters. Were you out sick the day they covered this in your Civics class?
sorry, but the pres gets to decide a lot on his own, especially with regards to all the departments in the executive branch (there are a lot, duh) maybe they only cover that for one day in breaux bridge high, but where i went it took a bit longer:shock:, maybe because they had to get it through our thick heads:hihi:
