The National Guard is ready for action in Wisconsin!

[afleitch]

Horrific over-reaction.

Hang in there public sector employees.

[Brittain33]

Except it isn't true that the entire car industry would have gone bust. Ford survived the crisis without any government support whatsoever.

I imagine one can assume that Ford's share of the market would have grown rapidly and provided a good deal of jobs that would have been lost through GM going bankrupt.

That's not what Ford was saying at the time. Do you know that Ford doesn't make most of what goes into its cars? GM and Chrysler going bust would have taken out the suppliers Ford also relies upon to conduct its operations, and who were owed money by GM and Chrysler. Ford would have been serious collateral damage.

[Franzl]

Except it isn't true that the entire car industry would have gone bust. Ford survived the crisis without any government support whatsoever.

I imagine one can assume that Ford's share of the market would have grown rapidly and provided a good deal of jobs that would have been lost through GM going bankrupt.

That's not what Ford was saying at the time. Do you know that Ford doesn't make most of what goes into its cars? GM and Chrysler going bust would have taken out the suppliers Ford also relies upon to conduct its operations, and who were owed money by GM and Chrysler. Ford would have been serious collateral damage.

Do these suppliers only work for American automakers?

[Brittain33]

Except it isn't true that the entire car industry would have gone bust. Ford survived the crisis without any government support whatsoever.

I imagine one can assume that Ford's share of the market would have grown rapidly and provided a good deal of jobs that would have been lost through GM going bankrupt.

That's not what Ford was saying at the time. Do you know that Ford doesn't make most of what goes into its cars? GM and Chrysler going bust would have taken out the suppliers Ford also relies upon to conduct its operations, and who were owed money by GM and Chrysler. Ford would have been serious collateral damage.

Do these suppliers only work for American automakers?

I'm guessing the importance of these suppliers to various automakers depends on how much the geographic distribution of their production overlaps with that of GM and Chrysler and how much of their supply chain is American. A company based in Michigan with much of its plant in the Upper Midwest would be more affected than a Japanese company that has a plant in Alabama and imports parts from elsewhere.

But having European and Japanese factories far from the Upper Midwest, like in South Carolina and Alabama, affected by a mass supplier shutdown in Michigan and Ohio isn't any better for the U.S. economy than just having Ford affected.

[Franzl]

Except it isn't true that the entire car industry would have gone bust. Ford survived the crisis without any government support whatsoever.

I imagine one can assume that Ford's share of the market would have grown rapidly and provided a good deal of jobs that would have been lost through GM going bankrupt.

That's not what Ford was saying at the time. Do you know that Ford doesn't make most of what goes into its cars? GM and Chrysler going bust would have taken out the suppliers Ford also relies upon to conduct its operations, and who were owed money by GM and Chrysler. Ford would have been serious collateral damage.

Do these suppliers only work for American automakers?

I'm guessing the importance of these suppliers to various automakers depends on how much the geographic distribution of their production overlaps with that of GM and Chrysler and how much of their supply chain is American. A company based in Michigan with much of its plant in the Upper Midwest would be more affected than a Japanese company that has a plant in Alabama and imports parts from elsewhere.

Makes sense, yeah.

The auto bailout, by any objective measure, was actually a success. I'm not denying that. But I do think it sets a pretty bad precedence for the federal government to bail out everything that claims to be too big to fail, whether automakers, airlines, whatever.

I don't believe companies are forced to make certain tough choices if operating at a massive loss is going to be bailed out regardless.

Although, admittedly, the poor condition of automakers in the U.S. isn't entirely their fault, as government policy (extremely cheap gasoline/energy) has contributed greatly to the non-comptetitiveness of American manufacturers.

[Brittain33]

Gotcha. Well I think that there are some sectors that are considered too big to fail by the government and not just by their owners--airlines post-9/11 and auto are part of it--and will be bailed out if they hit a crisis, full stop. Airlines keep the rest of the economy going and politicians are sensitive to the health of the auto industry. Similarly, banks. There may be other industries that are close to equally important that never get bailed out because they don't capture the imagination of politicians or aren't as visible.

I'm part of the minority of Americans that knows TARP was successful and made money for the government, and more than that, thinks it was the right thing to do.

[Badger]

Gotcha. Well I think that there are some sectors that are considered too big to fail by the government and not just by their owners--airlines post-9/11 and auto are part of it--and will be bailed out if they hit a crisis, full stop. Airlines keep the rest of the economy going and politicians are sensitive to the health of the auto industry. Similarly, banks. There may be other industries that are close to equally important that never get bailed out because they don't capture the imagination of politicians or aren't as visible.

I'm part of the minority of Americans that knows TARP was successful and made money for the government, and more than that, thinks it was the right thing to do.

At the risk of nitpicking, didn't TARP still cost the treasury a net loss with AIG's death being a big part of it? Yes, it cost MUCH less than most American expected (or even currently believe, notwithstanding the actual numbers), and probably kept the entire economy from going into death spiral several times worse than what it went through.

But still, isn't TARP technically a red entry on the government's balance sheet?

[Brittain33]

Gotcha. Well I think that there are some sectors that are considered too big to fail by the government and not just by their owners--airlines post-9/11 and auto are part of it--and will be bailed out if they hit a crisis, full stop. Airlines keep the rest of the economy going and politicians are sensitive to the health of the auto industry. Similarly, banks. There may be other industries that are close to equally important that never get bailed out because they don't capture the imagination of politicians or aren't as visible.

I'm part of the minority of Americans that knows TARP was successful and made money for the government, and more than that, thinks it was the right thing to do.

At the risk of nitpicking, didn't TARP still cost the treasury a net loss with AIG's death being a big part of it? Yes, it cost MUCH less than most American expected (or even currently believe, notwithstanding the actual numbers), and probably kept the entire economy from going into death spiral several times worse than what it went through.

But still, isn't TARP technically a red entry on the government's balance sheet?

You may be right about the AIG part. I'm not going to go check.