So Here's The REAL Question On The Chrysler/GM Deals- Do You Think Obama KNEW They Would Fail BEFORE He Bailed Them Out?

I dont know it depends on how you look at it. DID you know they were going to make a TERMINATOR 4 begining of last year.

Chrysler needed money, like AIG, Bank of America, etc; to run the core business. Did the President know, well is he an auditor? Could anyone outside of the auditing company, not looking at 20/20 hindsight as reference, known things would have gone the way it did? Will GM enter into bankruptcy? Speculation is all we can do. We are on the outside, as usual playing armchair quarterback because we truly haven't the slightest clue but what is being told to us and the end results.

But inspiron7,

What Auto Spy reader DIDN'T know it was doomed to fail?

The problem is unsolvable in a short enough timefrmae required.

If they had 10 years to fix it before running out of money, it would be possible.

But these guys are month to month, bleeding profusely.

Our President is a smart guy.

They KNEW.

Which then opens up a whole different set of questions.

001

This is a well known psychological phenomenon called "Hindsight bias" or sometimes called the "I-knew-it-all-along" effect, which is the inclination to see past events as being predictable.

No one has a crystal ball, and there is no tooth fairy, or santa clause, or allah, or jesus either. Just grow up and deal with reality head on and not like a grown child. This f#cked up situation is not one person's fault and certainly not the new guy who has been in office for about 100 days. Is it the fault of the previous administration and their contempt for the U.S. Constitution? Probably not entirely.

Hear, hear. I am with America on this one. Agent001 I love you for this website and many, if not, most of your postings but the political stuff?? I have an idea why not create DemocracySpies? Lets talk about cars here... Its bad enough that we have to deal with the One brand only Lovers here; by mocking everything the current administration does, you become like them. Surely the outgoing administration saw some of this coming, but I suppose Lexus, I mean Republicans, can do no wrong... See what you made me do... now I am talking to you as if you were David969.

Keynesian economics never worked before and they aren't going to work this time either. Bailouts should have never happened, not for the auto industry nor for any other industry. There isn't such a thing as "too big to fail"-- believing that is the case is part of why we're in this mess.

Yes of course he did. It was quite obvious without knowing too much inside info. But he did it to prove to the Americans that he has a good heart and means well as the president of the U.S.. He was also being fair since they bailed out AIG and others. I would've done the same thing even though I don't agree with it.

1995e34: first, I would suggest you check out the Austrian economists at http://mises.org/.....second, I would suggest that the Feds (Obama and company) were more concerned about shoring up the financials of the union members and UAW than they were the manufacturers. If they were really concerned about the manufacturers the government would have told them to follow the BK route long ago.

"whats the biggest difference between anarchists and libertarians?"

Libertarians are anarchists with money.


Cute joke, wrong of course, but cute.

1995e34, I thought philosophy was defined as the love of wisdom. Now you redefine it as a non-substantive ideology. My friend, perhaps it might surprise you that in years past disciplines of study in college were classified under philosophy, e.g., philosophy of law, philosophy of biology and so forth. Economics is simply a sub-category of political science (or better philosophy of politics) principally known as a management of a household.

Now, please explain how those definitions are not substantive. Or is your real problem the fact that they (Austrian school) are not compelled to give you warrant for your desire of a concrete experience?

It is quite amazing when I think about people such as yourself, who think that natural (passive) means of energy are great but natural (free markets) passive economic principles are repulsive. Austrians do not believe in lawlessness. I would suggest that the very fact they have philosophical principles are indicative of a lawful system. The problem really coalesces around the rights of the individual in light of the government's tendency to overreach and in the process take away, deny or impede the rights acknowledged in our constitution.


With respect to your comment on peak oil. Is that not a philosophy (a system of principles--perhaps worldview might be preferable) without the empirical data to substantiate your view? Yes, I am aware of the hypothesis but there are no studies, which can provide a believer (such as yourself) with the certitude necessary to bring your personal life into correspondence with what the principles demand. In other words, do you live a life (self-consciously aware) committed to moving away from carbon based energy? If not then what is the point of your arbitrary assertion of substance over their (Austrian school) reasoned approach to addressing the supply and demand of energy with free markets as opposed to someone like yourself, who would rather pursue an unsustainable government usurpation of the markets that will bring us to ruin?


My friend the only insult you should have received would be an uncharitable dismissal of your prose because of your refusal to interpret their (Austrian school) material in a fair manner. If you have a reasoned argument then put it out there. All I read from you mere were assertions without clarity of terms, which would mean that your post lacked substance.

I think he bailed them out so they could be allowed to restructure and stay in business.Chapter 11's purpose is to reorganize and legally get rid of creditors. This was a vital factor in allowing these companies to continue.My question is and remains as this-Why isn't the same pressure not being placed on banks. Why are they not being forced to restructure and why doesn't the general public not have the details like our 2 auto companies?

I agree with this as well...good points

mini22 the purpose of a Chapter 11 is not to get rid of creditors....in fact the creditors are the ones who usually gain possession of the company. The shareholders typically lose most if not all. If they want to get rid of the creditors then they would liquidate, yet, the proceeds would go to the secured creditors first and then to the unsecured creditors until the proceeds are exhausted.

As for the banks, they are of an entirely different matter than what we see with the auto manufacturers. So please, if you have beef with them fine but don't attempt to speak univocally with the two industries.

inflammatory headline, as usual.

inflammatory comment, as usual. ;)

001

Its sometimes strange to hear Americans bitch about the bailouts of GM/Chrysler by the Obama administration. At a time when the industry is going through its worst phase in NA, it behooves all of us to aleast pay close attention to what this bailout means. The Auto industry far from being another industry is a technology leader industry that supports a huge ancillary engineering base. Its no surprise then that every economic power and corresponding wannabe is trying to get its own auto industry.
Rather than following the time honored tradition of the EU market
leaders like Germany and France to simply kill the competition through tarrifs and protective clauses, Obama has instead simply given the teh local industry the chance to regroup itself through recapitalization and bankruptcy while preserving the competitive market to ensure that consumers get the best choice .
Agent 001 , you often rail against this current administration while deifying the German car manufacturers for their "so called" "superiority".
Let it be known the VW (and by its extension all its sub brands) are controlled by the German state of Bavaria and thus allows it access to funding and sales channels that no other manufacturer in germany enjoys and Porsche despite the financial tricks it has played (which would be guilty of fraud in the US had they been an american company) over the last year to finance its aquisition of VW has yet failed to take control of the board.
And while it is easy to mock the excess of the UAW, let it be known that that entire German govt bends overs when IG Metall goes on strike . Infact, what MB , BMW pay IG Metall union members would make UAW members blush in shame.
MB iteself has been recued by teh state ( not directly by through investment props by the Bundesbank ) teh many times it has shot itself in the foot. Point to example

1) When it got into the Aerospace business and essentially had to recapitalize itself ( companies like Fokker etc were part of MB)
2) Its disastrous buy out of Chrysler

Its no joke that the Social Democrats in the German govt have always been protective of their heavy industry in Germany. Labor conditions and payouts for blue collar workers are teh best in the world. Not to mention that their tax rate would make even an american pinko blush ..


Ditto to france and its protection of Citroen, Renault etc. Not to mention that it protects its electronic industry majors like Thompson to alevel that is almost riduculous.

I do not advocate a constant govt control like Germany and France. Its not in the nature of us americans to do so . However this intervention is far less then what we gave to protect the steel industry , aerospace industry or even Harley Davidson . And while its remains popular to bash the UAW . please do keep in mind that unions brough the wonderful concept of a weekend, health care and retirement and a living wage . Thank them too that that kids arent toiling away at teh age of 5

Sigh , please do bear with me for the unending typo's in the above comment.

Aside from the typos, that was a well thought out argument/statement. However, the unions have ruined the auto companies, they are overpaid and lazy. The 21st century unions are comprised of people who knowingly accept their job because they know they have job security and can do whatever they want (i.e. take advantage of their employer) because they know they are irreplaceable. With the vast competition and talent in the workforce, these jobs without the unions, would create a more competitive environment, granted they make the same wages, thus would attract more competent individuals and broaden the spectrum of efficiency. (Case in point unions were formed to keep the employer from taking advantage of the employee, in today’s world that would never happen, employees will forever have the upper hand over the employer) UNIOINS NEED TO GO!!!

The scary thing is this is increasing government and a President who 'chooses' who is deserving of a bailout.

Totally against the principles of how our country was founded.

001

1995,

"whats wrong with a big government? are we not a big country? if america is REALLY a democracy, then why is everyone so afraid of the government? we ARE the government."

I would hope after some reflection that you come to realize that the above is a circular argument (circulus in probando). I very veiled and clever one, but one nonetheless. What you have basically said is this:

1) Why should we be afraid of the government?

2) We are the Government.

3) Why should we be afraid of ourselves?

The last is the implied conclusion of your argument. You established equivalence in line 2 ; making lines 3 and 1 equal. It is circular.

Furthermore, when they say that "we are the government"- they do no mean literally. The government is an exterior entity in reality.

Also, the United States is not a democracy- it is a Republic.

<Chuckle>

I have no need to add anything you what I have already said on this matter, even in light of your comment.

Hell,

That is like the 8,000th time that has happened.

WE ALL KNEW THEY WOULD FAIL!!!....the Chrysler Fiat cars will be a fiasco and will go the way of the Daimler-Chrysler union.....GM will be smaller but I don't think any smarter....Ford will eventually end up selling more of it's european inspired models. IF and WHEN the market ever 'picks up' again.....the public will only continue to avoid these failed companies and their products.

you are a delusional soviet style revolutionary

Right on baby!!!Hyundai is the biggest bitch racist on this site!!!

In a way the government did not fail to do what they wanted to do with Chrysler.
The only party who's really really screwed is Cerberus.
The others are just mildly screwed.

001 - do you have a better solution? If your ideas are so much better, why don't you call the White House and speak up.

I tried!

001

or better yet, don't Agent 001. We just had stupid people running things for 8 years. It's about damn time you just shut the f*** up, sit back, and watch Obama fix this thing.

can you sour grapes right wing clowns stop whinning about Obama? you were in charge for 8 years and we have nothing but a disaster after a disaster to show for it. The two times in the last 100 years when republicans had the most power (president and biggest majorities in house and senate) where 2001-2007 and first half of 1920's. Funny how both times were followed by the biggest economic disaster in the last 100 years also.

Did you morons know Detroit would go bankrupt when you killed all fuel efficiency/electric car progress and promoted hummers and tahoes? DID YOU? no you didn't, because you're that stupid.

I understand that going to the library is hard, but there's this wonderful thing called, "the Internets." If you just take a quick look, you'll see that Mr George Bush is the one who began throwing money at Chrysler.

Mr Obama's government has orchestrated a bankrupcy, which the bloodthirsty have been calling for for months.

Seems like good, responsible deal making, to me.

When the right wing begins to have real policy initiatives other than blaming Obama and Pelosi for their dyspepsia, it will be good for the nation.

I can't believe anyone likes Obama and Biden.

Biden is a dolt and Obama is an inexperienced dummy.

McCain and Palin sure would have been a breath of fresh air! Yea right!

OK..I'm going to let ya'll in on a little secret...There isn't "a Dimes worth of Difference" between the Republicans and the Democrats...They are OWNED by the same Oligarchs that Really run this country.

Why would "THEY" crash the American Economy...Simple,YOU are being paid TOO MUCH...that effects "THEIR" profitability...THEY need to De-Industrialize America.

Over the next 40-50 years, China will grow as an economic power,and will develop a "Middle Class" of aprox. 750 million people... during this same time period America will enter into a prolonged Depression that will take the US down to 2nd or 3rd world levels.

Maybe at the end of all this (in 40 years) THEY may decide to "Re-Industrialize" the United States so that we can sell Cheap Useless Crap to China.

Before that happens...THEY need to drive down American Wages to a point where YOU (or your Children) will be grateful to work 12 to 16 hours a day..6 days a week.

Welcome to Serfdom.

You are right. When people that are not rich crys about the man next to him having a job that takes care of the bills and health care over the a company instead of fighting for the same rights you know we are in trouble.

More like, go hang out in the prison yards with you bros.

Let's look at it this way. You see a company that has been losing money for more than a year continuously.. They have no good future plans and their current products are garbage, even the latest ones. Would giving them less than 5 months and helping them financially get them back on their feet? It was obvious they are going to fail..

On the other hand, while GM has been losing money too, their latest products are promising and their quality is finally up with the rest of the world.. this is why GM has a much better chance than Chrysler.. They actually have something they are working on, not just paying debts.

For the many people who are out of work, let's just hope things work themselves out. I prefer seeing employed Americans rather than employed asians.

Stop being racist. It's not like other countries don't have Americans working there.

STFU you pansy.

Very nice of you.

I see this as a kinda embarassment for Obama. He had them come to washington to beg for the money. He gives them their billions, and then the company fails anyways. So was this a waste of our money and we just held up the inevitable or were they doing this on purpose cause they knew they were holding out for a merger and since Nissan fell through Fiat was next in line.

Aside from that, I'm glad Nardelli is out. The man drove down Home Depot for years and then didn't do much better for Chrysler. I guess bringing it outside help from people who know nothing of the auto industry doesn't help either.

And another note. Why is the governmnet and president proclaiming the bankruptcy instead of the company itself? Last I knew, I had more stock in Chrysler than Obama did since he used my money to help them.

He probably somewhat knew they were going to fail...but gave the Company too many chances to redeem themselves.