All The News That Fits

Pelosi: “bankruptcy… not an option”

Posted by necessarygrace on December 2, 2008

The Big Three are back in DC for a second try at 25 billion in cash and prizes. They were sent home a few weeks ago with their tails between their legs, told to come back with a “plan” next time. Are any of us gullible enough to think congress is actually going to turn them down? The only reason they said no before is because President Bush flat out said he’d veto a bailout bill for the automakers. Democrats are just biding their time until Dear Leader takes power next month and starts signing off on every spending bill they can put in front of him. (Not that Mr. Bush has been a paragon of frugality himself…). And lest any of us should be so gullible as to hope for any other outcome, Madame Pelosi quickly cleared up those misconceptions today.

“I believe that an intervention will happen,” Pelosi said at a briefing in Washington. “Everybody is disadvantaged by bankruptcy, including our economy, so that’s not an option.”

I’ve been listening to all the talk about bailouts and the auto industry in particular and I have to admit the whole thing makes my head spin. Economics has never been my strong suit. But I wonder, what exactly would be so horrible about bankruptcy? Don’t we have that system in place for a reason?

Jack Welch, the former chairman and CEO of General Electric and a guy who seems to know a great deal about economics and running a business thinks declaring bankruptcy is exactly what the Big Three need to do.

Talk about a fresh start. For more than a decade, U.S. carmakers have chipped away incrementally at massive legacy costs. But reorganization would open the doors to meaningful structural change through the renegotiation of contracts with creditors, dealers, and unions. And it would offer better odds of paying back taxpayers.

I wonder, does Madame Pelosi even care that these bailouts are fiscally irresponsible and make no economic sense… do any of the democrats care? Or are they so power hungry, so eager to transform us into a socialistic society that they will sign off on any blank check put in front of them? And at what point will America wake up and smell the communist coffee?

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5 Responses to “Pelosi: “bankruptcy… not an option””

  1. Nicki said

    Piping up just because this happens to be an issue near and dear to my heart, as you might guess 🙂 I am on the fence about the bailouts but actually find the term ‘bailout’ somewhat misrepresentative. This isn’t the first time an automaker has come asking for a gov’t loan and last time they were paid back with interest. It was a good risk for the government. The expectation is that the same will happen this time – a loan, not a giveaway (like on wallstreet). To me, that makes it a lot more palatable.

    That said, I do understand it is a risk either way. I think it will be a complete nightmare for our economy if the Big 3 are allowed to go bankrupt mostly because of how it will affect the economy through significant job loss. Unless you live in Detroit or another big auto hub, it’s easy to be disconnected to how intertwined SO many industries are with the auto industry. A bankruptcy would plummet the stock market even more, it would drive unemployment through the roof, it would destroy what is left of areas like Michigan that are already completely hard hit. Could they rebuild through their “fresh start”? Maybe but not without serious casualties. And the question is – are those casualties avoidable? If so, and if the government will be paid back with interest, I’m in (shaky) favor.

    I agreed fully with the call for a plan. That sounds like a no-brainer to me. I also agree with you that it won’t be turned down a second time. So I hope it’s a good one.

    I’m not really sure how the Big 3 can turn themselves around or even if they can. I know that automakers at every corner of the globe are suffering, it isn’t just the Big 3. Part of me also is a little resentful because what took them so long? People who live around this stuff saw this coming years and years ago. Many MANY people I know and love, myself not withstanding, have lost job after job, homes, everything they worked so hard for because of this nightmare. For us, it is too little, too late. But for the millions more than stand to be affected too, it isn’t.

    But I also really do believe at this point when we are talking about 20bil as compared to the money we just doled out apparently for nothing, that the payoff is far more likely and far less risky and the loss is far smaller.

    What I want to hear more talk about is the economic situation in Cali!!!

  2. Elaine said

    I agree with Nicki that the idea of it being a loan rather than a bailout makes it a tad more palatable, but I still think the governemnt needs to stay out of it. It is a huge mess, a huge, huge mess; but I think making the big three beholden to the government is dangerous, and what they need to do above all else is be able to significantly renegotiate union contracts. I could tell stories, oh I could tell stories! Seriously, the CEOs flying around in their private jets, wrong on so many levels as that was, is a drop in the bucket compared to the money they loose every day due to the union contracts. I’m all for unions protecting the little guy, but the UAW workers are no longer the little guy.

  3. Beverly said

    Dems don’t understand finances well enough to know that bailouts don’t work!

  4. Nicki said

    Elaine – I am totally on the same page as you on this one.

  5. Nancy said

    The bailout will happen. It is not bailing out the automakers; it is bailing out the UAW, who paid a lot of money for these Democrat politicians and darn well expect to be paid back in return.

    The Big Three going out of business entirely would be devastating to our national economy, but allowing them to file for bankruptcy protection would not. That would rid them of so much baggage that they could compete more easily with automakers who have a humongous advantage over them now.

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