Double Standard for Corporations.

With all the talk here from conservatives about people being dependent on the goverment, I was wondering, what about corporations?

Bear Stearns being bailed out by the goverment, brought back memories of the Savings and Loan bailout, Chrysler, etc.

Double standard?? How about a little complaining about corporations who through their own bad business decisions, get in a bind and then run to the goverment and squall for help?

Bear Stearns made the risky decsion to make loans to people of dubious credit, why don't they have to suffer the consequenses for their actions?

 

This is a microcosm of a much bigger issue in this country today. No one wants to take personal accountability and as a result, there are no consequences. As long as the government continues these bailouts, what's the incentive for fiscal responsibility?

 

I sometimes wonder if people realize how much the gov't gives out to supplement farmers. If they go out, so many jobs- not only farm labor but chemical companies, fertilizer plants, grain dryers, trucking, etc.

With combines ("Rice harvesters" like my dad would make me say when he was at LSU and we were in the city cause "Nobody will understand what you're talking about :lol being $180,000.00 new it's easy to see how they couldn't get by on $18.00 a barrel rice.

 

Bailing out companies is pathetic.

You don't see the govt. helping mom and pop stores from closing with giant corp comes to town.

It's all about who has who's hand in who's pocket...

 

The government props up and bails out mom and pop all the time don't be silly.

It isn't the big corps fault that they can do things cheaper and more efficiently. Mom and Pop should shape out or ship out.

 

And what mom and pop is this?

 

How is that, exactly?

Big corps get huge tax breaks to open stores while small business gets no such help. Case in point, Bass Pro.

 

Who got bailed out? Most BS stockholders were wiped out, the stock was 160 a year ago, and they got $2 a share for it, next to nothing? The employees owned 30% of BS, and they got the shaft, so who got bailed out?

 

They recieved money from the Federal Reserve to avoid insolvency due to a poor decision to invest heavily in subprime mortage loans.

What's so different than individuals who recieve federal asistance to eat, recieve medical care, etc?

That's all I'm asking

 

BS received nothing from anyone. They were "sold" for 200 million, or basically given away for nothing.

JPMorgan picked up BS for a song, with its negative net worth, all the bad subprime debt. The fed gave JPMorgan a $30 Billion line of credit, so they can pay margin calls on the bad debt.

All this was done, so BS did not go bankrupt, renig on its debts, and in turn bankrupt the next guy who couldn't pay his margin call. That could have cascaded through the banking system and created a lot of carnage and fear and really seized up the market.

Not a great solution, but better than the alternatives, IMO.

But the dollar just got weaker, as we printed another 30 billion. Maybe we'll be lucky and JPMorgan will only need 20.

Some BS employees got hurt I'm sure, but since they were finance pros, hopefully they listened to rule 1 and diversified. The execs probably took out many millions the last 5-10 years.

Edited: After Enron, the govt. passed Sarbanes Oxley act, for "enhanced reporting". It's the dumbest thing I've ever seen, a total waste of money, and it costs corp. american dearly. The execs have to sign in blood and are guilty of crimes if the books are doctored. So what happened? Why didn't the wonderful Sarbanes Oxley prevent this? Where are the external auditors again???

Now the Glass Steagle Act was repealed in the late 90's, and it was written in the 30's to help prevent the abuses of the 1920's from recurring. Banks could not also be brokerage houses. The banks said 'hey its the 90's, we can't be shackled by those 1930's restrictions, that kind of stuff can't happen today'. But its likely we needed Glass Steagle still in effect, and we don't need Sarbanes Oxley which did not help. I'm not an expert here, but I've never liked SOX.