Bankruptcy is Better than Bailout

Ahead of Hearings, Some Lawmakers Back Bankruptcy for Big Three

At least are few are getting the correct idea that the option of letting these companies face bankruptcy would be much better than funding a bailout.

Meanwhile what's happening to the $700 Billion bank bailout?

Audit of $700B Financial Sector Bailout Fuels Criticisms of Paulson, Bernanke

Why, of course, rumors of mismanagement already!

Why on earth does anyone even entertain passing the plate for even more money?

The government can't manage its own business much less private enterprises.

 

You're estimate is growing rapidly!

Bankruptcy does not lead to permanent unemployment. People adjust to new jobs and new opportunities.

We could, on the other hand, all work for the government and have a job for life couldn't we?

 

There's a market for automobiles. People want them. There's a need to make automobiles.

There are people who know how to make them. There are people who want to make money doing that. There people who will supply them.

It's a match!

We don't need to worry about the bankruptcy of the big three because someone will pick up the challenge to supply the need.

Those people, with money to invest in the business, will need workers. They'll even consider acquiring the better facilities of the big three. They'll avoid Detroit with its over priced union workers and corrupt politics. They'll zero on better locations like Spring Hill. They'll own the jobs.

People that know how to build them, have experience and skills, and are willing to work will have jobs. They'll own the skills.

It's another match!

Those that loose "their" jobs - they weren't entitled to for life because they don't own it - will have to make some choices. They may have to work harder or work for less or relocate some place else or get some training in another field or all of these things. They may not be able to continue being home ice delivery men now that everyone has a home refrigerator.

This "change" has been going on since for the history of man and people manage to adapt and prosper anew.

 

How do you know that I've not experienced such a thing in my life time?

Cavalier is more like the definition of one who assumes it's the responsibility of government to take money earned by some to pay for the poor management of others thinking it will manically solve all the problems rather than just prolong the pain, create an incentive for more, and make it worse for all.

 

Bankruptcy is reorganization under the supervision of the court. It is designed to provide a fair disposition to a difficult problem. There will be losers. There are no winners. But, in many cases company's recover from bankruptcy and return to prosperity. There may be some layoffs but not necessarily. Someone is still going to be needed to build cars so long as there's a market for them. A bailout costs the taxpayers. Bankruptcy costs the creditors, investors, owners, managers, workers, and unions of the business involved. It puts the responsibility where it belongs. A bailout transfers the responsibility to others and rewards the poor performance that led to the need for it. It also penalizes other companies who've performed well in the industry and do not need a bailout. Not providing a bailout keeps the incentive high to do right.

 

There's plenty of work to be done. If the line gets that long they'll need to go to another town and find a shorter line.

Can you even imagine 300,000,000 people waiting in line for a government handout because none of them want to accept responsibility for their own finances?

We're talking about the future of America!

 

The article states "... Details on the plan remain sketchy ..." and it sure seems so to me.

It sounds like another government plan to move money around an make every one think they're getting a really good deal.

It could, for example and in speculation, mean the government "buying" an 9% mortgage from Fannie Mae - spelled government in disguise - and "selling" a 4.5% mortgage back to someone. Where's the rest of the money?

If not this it's most likely something equally troublesome.

Money should not be loaned for less than it's worth! Ultimately it is not! Someone somewhere some time covers it!

 

Times were difficult but people did survive. People lost jobs. People were rationed. People lived lean. But, in time, people did find work, business did recover, people did start over, and people recovered and prospered. People also were much more thankful for they did have.

If a town is built around one industry and it shuts down then the town is dead. Having the government keep it alive is unfair to the rest that are making on their on.

Every state in the union is littered with places that once thrived but now are ghost towns some without trace. Gone are the lumber mills once the land was logged out. Gone are the cotton plantations. Gone are the coal mines. Gold mines played out. Times change and needs change. Then came the oil fields. Then came the electronics assembly plants. New towns developed in new places. People moved to where their skills were needed and did what had to be done. Did we owe all those ghost towns and their citizens jobs for a life time? No! Neither do we owe it to Detroit, or to the UAW, or to the big three.