So why, exactly, is the Treasury substituting government bailouts for chapter 11? Even if you assume Wall Street's major banks and insurance giant AIG are so important to the national and global economy that they can't be allowed to fail, that doesn't mean they have to be bailed out. They could be reorganized under bankruptcy protection. True, their creditors, shareholders, and executives would take bigger hits than they're taking now that taxpayers are bailing them out. But they're the ones who took the risk. We didn't.
The Treasury seems to have lost sight of its real client. It's client is not the creditors, shareholders, or executives of any of these firms. Its sole client is the American people.
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Comments: 6
Well, yeah. Are you forgetting where Mr. Paulsen came from? (Goldman-Sachs)
That's exactly the kind of incestuous relationship that should never be condoned by a Senate confirmation.
The congress is just as guilty and taking as many bribes as the Bush gang starting with Dodd at the top of the list.
Do not look for change when Obama take office because he favors these criminal bailouts and is supporting nothing new just the same old Washington insiders.
Would YOU buy a car from a bankrupt company? Would you trust them to make a quality car?
But it's not just the big 3 automakers and their shareholders that would be taking the hits in a bankruptcy declaration, but also all of their laid-off employees, plus all of their now bankrupt suppliers and manufacturers who have no automaker contracts and all of their subsequent laid-off employees... You didn't think GM made it's own plastic radio knobs for the CD players, did you? Many of those plastics manufacturing plants are in my own home town, small businesses that rely on those big company contracts to keep themselves afloat and their modestly paid employees happy with health care benefits. Just how many manufacturing sector lay-offs can the US economy currently absorb into other recession-proof sectors such as healthcare given how many lay-offs have already occurred in the financial sector? Not too mention everyone in the service and retail sectors who got laid off because nobody from the laid-off manufacturing or financial sector can afford to go to restaurants, buy new clothes, catch a movie at the theater or get that big-screen TV they've been dreaming of.
Everybody in the US is going to be taking the hit if all 3 US auto makers go down the tubes at the same time. IMO, let Chrysler die or merge because they've got nothing salvageable in their new car line-up or in their current sales, but save Ford and GM if only because they still have strong overseas sales and promising new electric cars coming soon to make them both worthwhile.