Quote:
Originally Posted by CaptainCrunch
In a pure market society, your right bailouts don't happen, and companies survive or not based on their own actions.
However in this case would the American's have been better off finacially and employment wise if one of the big automanufacturers and some of the banks had utterly collapsed?
I'm not a fan of governments intervening in private industry, but poor and stupid management or not, it wouldn't have helped the Aemrican economy at all if they had thrown 10's of thousands or hundreds of thousand people out of work.
Plus if you look at the paybacks that the American Government received from the auto industry and the banking industries, it did seem to work out.
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This is misleading. The auto industry has by no means paid back in full what it was bailed out with despite what those blowhard commercials say. Chrysler and GM have only paid off the debt instruments and a small portion of equity. The US and Canadian government still own equity worth a fraction of what they paid in at. The auto bailout was a business solvency issue which has long term structural business problems, whereas the banking industry had a liquidity problem where the short term panic caused a run on the banks. Big difference. People should actually be more pissed off at GM and Chrysler than they are at Wall Street vis-a-vis bailouts.