Sunday, May 13, 2012

Creative destruction of the truth

Normal people call what Rmoney is doing lying.


Anonymous said...

Since your slant is that the taxpayers should bail out troubled companies in an effort to save jobs, then how many employees must a company have in order to qualify for a pass around the bankruptcy laws?

lovable liberal said...

You didn't notice that GM did go through bankruptcy? Rmoney wanted GM to go through bankruptcy with no hope of private investment, a fire sale, in other words, with the result that a million jobs could have been lost and investors still would have been out their investment to an even greater degree.

Instead, with federal financing, GM was saved as a functioning enterprise that's a lynchpin of our domestic economy.

Public financing is by no means a right, and it was very much correct that many investors lost most of their investment. But if the destruction of a company would cause widespread damage to the economy at large, the government should consider stepping in for the sake of nation.

Anonymous said...

How many jobs is it worth for the TAXPAYERS to bail a company out? 10,000, 20,000 more?

lovable liberal said...

I realize you "free" marketers think that "tough shit" equals tough love, but you're wrong. Sometimes it's better to save something than to let the financial markets destroy it.

In 2009, there simply was no private financing to reorganize GM. Thanks to the risk-seeking behavior of the big investment banks, credit markets were temporarily stuck.

Yes, it's heresy on my part in your faith-based, false religio-economic theories, but the GM case proves that private markets are not always rational. GM was a salvageable enterprise, the exact sort of company for which bankruptcy saves what's salvageable.

Mitt Rmoney and the Teapublicans would have dismembered GM at great cost to the economy for the sake of stupid laissez-faire purity. Now Mitt wants credit. Sorry, that kind of credit is frozen!

In answer to your question, you want a simple answer to a question with many variables. Typical Teapublican bullshit...

Anonymous said...

If an energy company that employed over 100,000, like say Exxon Mobil, was in trouble, should THEY be bailed out by the taxpayers to save all those jobs?

lovable liberal said...

Depends on circumstances, of course.

There has to be significant risk to the larger economy. In boom times, no.

The investors have to take a substantial haircut. That's what I didn't like about the bailouts in the financial sector that were put together by the Bushists (and yes, Tim Geithner in his role at the NY Fed). The bad actors and failed investments were often made whole - talk about moral hazard!

A bailout through bankruptcy is a good method, with the government only brokering the deal and providing financing when the private sector won't or can't. Sure, you have to guard against patronage bailouts.

There's not a principle to bail out illiquid enterprises. The principle is to bail out the economy.