Spread the wealth???

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You cannot help men permanently by doing for them what they could and should do for themselves. Abraham Lincoln
cm
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So you are saying the government shouldn't be helping the big corporations with tax breaks and bailouts?
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Oh that cm... he's been asking. So: Give him a break!
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Richard Evans wrote:

That's correct. They should not.
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Tim Daneliuk snipped-for-privacy@tundraware.com
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wrote:

Finally something we can agree on.
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Han
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Han wrote:

So "the big corporations" should be allowed to go out of business? Then where will their former employees work?
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J. Clarke wrote:

Why should a big corporation go out of business? Why should /any/ corporation go out business?
Maintaining a corporate shell with tax revenues in order to deliver paychecks sounds a lot like escalation of welfare to include white-collar workers and executives...
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Morris Dovey
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Morris Dovey wrote:

Because it was in financial trouble and nobody bailed it out?

Same argument was raised against the Chrysler bail out, which it turned out never cost the taxpayer a single cent.
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J. Clarke wrote:

I think that's pretty superficial. Corporations encounter financial trouble when they adopt non-viable business strategies, mismanage finances, elect incompetent boards who hire/retain top execs who make bad business decisions, attempt to end-run the legal system, or alienate their marketplace.
You might find it interesting that I gave notice and left a former employer of yours when I saw some of those same behaviors become acceptable within that corporate culture. I'm disinclined to be sympathetic.

Saved by the K car, indeed. I wish I could say /that/ never cost /this/ taxpayer a single cent. My bad, because I made the purchase decision - but I have some first-hand experience how that loan was paid back - and I resolved (and /kept/ that resolution!) to never buy another Chrysler product. For me, your example is unconvincing.
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Morris Dovey wrote:

The reason the company went under is irrelevant to the person who is out of work with bills to pay.

So you didn't like the product. So what?
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J. Clarke wrote:

Then let's be honest and smart enough to make the welfare payments to that person instead of those who've already demonstrated that they can't manage money.

So our taxes paid for a bailout loan that was repaid by foisting cheap crap on people who expected reasonable value for their money. If that's acceptable to you, then you got what you paid for. It isn't acceptable to me because I didn't get the value I paid for.
Ah! I get it - your sympathy doesn't extend to those who get stiffed to make the bailouts work. Strikes me as a bit parochial...
...but as you said - so what?
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Morris Dovey
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Precisely, a company that refuses to change its strategy is doomed.
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Morris Dovey wrote:

Exactly. For this reason neither the corporations, banks, OR the individuals who spent money they did not have should be bailed out by the rest of us who live within our means and/or by jacking up the Federal debt to even more stratospheric levels.
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Tim Daneliuk wrote:

First...while I'm not from the US, I'm still impacted by the issue.
I'm generally in favour of letting the impacted businesses collapse under the weight of their own collective stupidity/greed. However, I think there's probably a kernel of truth to the "too big to fail" sentiment. (Of course, as one economist put it, that just means that they were "too big".)
Hypothetically suppose the US government (and all the other world governments) did let the impacted corporations collapse. It seems quite possible that domino effects would throw basically the entire developed world into a recession.
I'm Canadian and arguably our banking system has been one of the least impacted in the G8 due to stricter regulation. Even so, if the US and Europe were to have major problems, we'd be screwed as well because we're primarily an export nation.
Because of this, I'm currently in the "reluctantly bail them out and then try hard to make sure it can't happen again" camp.
Of course the downside of the bailout is that the next time the bankers see an opportunity for a quick buck via a risky move, all they have to do is make sure they're "too big to fail" and they've got an instant security blanket.
Chris
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Chris Friesen wrote:

I'm really, really hoping that you're still in that camp a year from now...
...I worry that we might be trying to put out a fire by smothering it with petrol.
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Morris Dovey wrote:

You and me both. :)
It sticks in my craw that there don't seem to be any effective penalties for the industry people involved. Sure, a lot of people took on much higher mortgages than they could reasonably pay off, but their bankers led them on, or at least didn't dissuade them.

That is the risk. However, the alternative seems to be that a significant portion of the global banking system implodes because it was overextended.
Whoever thought that a developed nation (Iceland) could basically go bankrupt? It's crazy, but it happened.
Chris
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Chris Friesen wrote:

Well, clearly, they hadn't gone far /enough/ into debt. :-b
I'm off to the polls to exorcise my frustrations.
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Chris Friesen wrote:

This is nonsense. The "people to blame" are the big spending politicians and their mooching constituents who all wanted what they could not afford. The bankers - while not blameless - are the *last* place the problem was born. You want to punish someone? How about millions of Western/US citizens that bought stuff/houses/cars/boats they could not actually afford and then whined that they couldn't make the payments.

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Tim Daneliuk wrote:

Sure, there are many people who took on more debt than they could pay back. However, a responsible banker should say "no, you can't have that loan since the odds are that you won't be able to repay it".
If the loan officers had been doing their jobs, people would never have been able to get the loans to buy all that stuff. Instead, the banks were coming up with exotic mortgages to try and entice people to borrow more money. (I bought a house 2 years ago, and my bank was perfectly willing to give me a mortgage almost twice as big as what I was prepared to take on--and that's in Canada where the industry is more tightly regulated.)
The Fed made it so cheap (1% interest!) for large institutions to borrow money that it was extremely tempting for organizations to leverage themselves to the hilt in order to borrow from the Fed so they could turn around and lend it out at higher rates.
Chris
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Chris Friesen wrote:

Since when are people not responsible for themselves? The borrowers were big boys and girls. The idea that they were somehow coerced into borrowing is absurd on its face - it takes a LOT of paperwork and signing to finish up a loan. The fact is that people got greedy and now want to lay off their responsibility on the eeeeeeeevil bankers.

Not true. The Federal weasels forced the bankers to give loans to people whose only "income" was welfare via the foolish lending guidelines jammed down Freddie/Fannie. This was *government mandated* not initiated via the banks.

Both borrower and lender are adults of sound mind. Why do I have to pay to bail out either party of their respective stupidity?

Exactly. Now ask yourself *why* the Fed did this? Cheap money makes servicing the existing debt less expensive. This means political vermin can go into MORE debt to buy votes to get/stay elected. How else is the ultimate political weasel, Obama, going to make good on his many promises, for instance. More debt. Beyond that, artificially reducing the interest rate has the effect of devaluing the dollar, at least indirectly. This means that we get to pay off the old debt with much less valuable dollars - another common ploy of the political weasels. This works in the short term, but in the longer term, it corrupts the economic foundations of the nation so badly, it comes back to haunt all of us.
In short, the US economic has been destroyed not by that eeeeeeevil George Bush, or the eeeeeeeeeevil oil companies, or the eeeeeeeeevil bankers. It has been destroyed by *its people*. The mooching, lazy, something-for-nothing losers who want what they want whether they've earned it or can afford it. The political classes (all of 'em, left, right and center) and bankers were just accessories to the murder perpetrated by the greedy, foul, and malignant larger population.

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