It occurs to me that the current bailouts are nothing more than power plays on the part of our elected officials. With the bailout of AIG did the federal government not get an ownership stake of up to 80%? The “lending crisis” is turning out to be just another non-crisis. West Virginia’s home sells are much higher than national average and foreclosures are nearly non-existent. This is in contradiction to what we have been told. People are still spending money on items they don’t need, much of it placed onto credit cards. The majority of new products fall within the category of “green” products that cost more and do less. Talk about a non-crisis! But I digress. Now even the banks are asking “what lending crisis?”
I heard this morning that the bailout of the auto industry will more than likely come with partial ownership – again by the federal government. I spoke out against the $700 billion bailout that was so heavily impressed upon us as necessary to save our economy in a crisis situation. No one listened. The government, for all intents and purposes, becomes an investor in the companies that they bailout. It was said that this money is to be repaid back to the government over time, but I haven’t come across any information that relieves the government from their partial ownership stakes after said money is repaid.
Look, I don’t know a lot because I’m just a nobody citizen that tries to keep my finger on the pulse of the issues of my time. But I don’t believe the any power that has been given to the government has EVER been returned to the people. If we do what is best for our country then we would allow the companies that make bad business decisions to fail. This was known to our founding fathers as “free trade.” If the government takes an investment role within the companies which it bails out then it will create a conflict of interests. Will future legislation reflect good reasoning and sound logic, or will it be more catered to the government’s own special interests? The government can then dictate what products, goods, and services are to be produced and/or rendered from the companies in which they hold an interest. This isn’t black helicopters folks, this is socialism!
Concerning the auto manufacturer’s requests for another bailout; why not let them fail? Thousands of people out of work? I doubt that would last very long. Through capitalism, a company will see an opportunity to step up and fill the supply and demand gap that would supposedly exist. This would provide jobs for a large number of the now out of work auto workers. Retirees won’t get their pension/retirement money? If the manufacturers are permitted to file bankruptcy (yes I said “permitted”) then they would be restructured. Nancy Pelosi has said that bankruptcy was not an option. I doubt that bankruptcy and reorganization would cut out the retirees, mainly because that would be bad PR, but because they do have an obligation to those retirees.
Besides all of this, why aren’t there more people about a possible buyout or a merger. That would alleviate the majority of the issues that they are facing for immediate financing. Their issues with the UAW will have to be resolved as well before they can start turning a profit.
As I have said, I’m simply a nobody that tries to keep up with what’s going on. I’m not a financial advisor, bank executive, or even a CPA, but I know that socialism is not the path that our founding fathers intended for us go down. Our elected officials don’t seem to represent their constituencies anymore, but perhaps if enough of us call our representatives and tell them where we stand they will at least know how we feel about it.