FU - FairAndUNbalanced.com - Latest comments on Mitt Romney's Managed Bankruptcy

In response to: Mitt Romney's Managed Bankruptcy

Jerry Critter [Visitor] — Fri, 26 Oct 2012 16:29:30 +0000

Romney saved the Olympics with a multi-billion dollar bailout from the federal government. Obama did the same with the auto industry.

In response to: Mitt Romney's Managed Bankruptcy

Trey [Visitor] — Fri, 26 Oct 2012 15:02:22 +0000

F&B,

I have to say that I am thoroughly enjoying this discussion.

That said; The government did not go out and poach the auto industry when it was weak. Again; They came to the government for a chunk of TARP. Guarantees would have been nice, sure. Government does a lot of loan guaranteeing (FHA, DOE). And honestly, I can't find in my research, what steps GM/Chrysler took prior to begging us for money from TARP. Common sense would dictate that avenues such as federal loan guarantees were sought after prior to direct government investment.

As for the meaningful restructuring; I am not sure what the Romney-bent webpage was supposed to tell me or prove? There are no citations other than a link to another of its webpages and then a link to a wikipedia article. As for kicking the can down the road, if that is what it was: I believe the objective of the bailout was to fix the immediate need for GM and Chrysler not to shut its doors and shutter its windows. Pension obligations were rightly considered something to be addressed after GM and Chrysler were brought back to viability.

Check out: http://www.treasury.gov/initiatives/financial-stability/programs/Other%20Programs/aifp/Pages/autoprogram.aspx

Granted it's a lot drier (And longer) than www.whoisromney.com...

And Cronyism? Really? That's something I would love to be able to research more and find proof of. UAW gave Obama $42,797 in '08 according to factcheck.org. Can you point me somewhere on the 'net that may have some credible information on this?

In response to: Mitt Romney's Managed Bankruptcy

F&B [Visitor] — Fri, 26 Oct 2012 03:21:29 +0000

Ryan, that is an interesting question. I haven't thought about this issue in terms of morality.

My initial reaction is that in my mind morality and auto bailout occupy separate spaces. After giving it *a little* thought, I am thinking that neither approach would be fully morally right or wrong but those terms would apply to each approach in varying degrees.

The approach that ultimately passes the least amount of hardship on to future generations would be the most morally right. I see the political cronyism part of the government solution as mostly morally wrong, these decisions should not be based on who donated more to the president's election campaign.

In response to: Mitt Romney's Managed Bankruptcy

F&B [Visitor] — Fri, 26 Oct 2012 03:06:23 +0000

Trey, first, regarding the 'low risk' comments, government guarantees would make the loans low risk regardless of the status of the auto companies.

Second, the main reason the restructuring wasn't meaningful is that the unfunded pension liabilities were not properly addressed. This is the biggest can that was kicked down the road. They show short term benefits but this will eventually have to be addressed, the pensions will have to be funded. Also, rather than letting the needs of the business determine which jobs to cut and which to keep, much of this was dictated by the federal government.

This is a long discussion and this site does a good job of examining both sides: http://www.whoromneyis.com/Issues/RomneyGMBailout.html

The other part is that the bailout turned into Obama's payback to the UAW. This kind of Chicago style patronage/cronyism has no place in government. I've seen this kind of politics play out all my life in Chicago, and now we're seeing it on a national scale under Obama. I did not think Obama had been so intimately involved in Chicago politics that he would carry that style with him to the White House. I actually thought he would rise above it. Boy, was I ever wrong about that.

In response to: Mitt Romney's Managed Bankruptcy

Trey [Visitor] — Thu, 25 Oct 2012 17:56:19 +0000

F&B,

While I appreciate your personal anecdote concerning financing, I don't believe it's appropriate to compare that to the financial need the Auto Industry found itself in. There are several examples of take overs and acquisitions during that time people. Several banks and financial institutions bought one another during this time, afterall.

I like what you said, 'Loans were available when the risk was very low'. That's kind of the point, isn't it? Who was looking at the struggling auto industry and saying 'Now that's a very low risk for investment'?

It seems like Chrysler and GM are doing much better than they were. Chrysler has had growth quarter after quarter. GM became profitable again after their restructuring back in 2011. They keep flirting with retaking the #1 spot.

So what about their restructuring hasn't been meaningful?

In response to: Mitt Romney's Managed Bankruptcy

Ryan [Visitor] — Thu, 25 Oct 2012 17:01:47 +0000

F&B,

Do you believe that the bailout was morally wrong?

In response to: Mitt Romney's Managed Bankruptcy

Jack Jodell [Visitor] — Thu, 25 Oct 2012 14:56:55 +0000

Marie Antoinette was an excellent and fitting analogy, Burr. Romney, locked within his pampered world as he is, has absolutely no insight into the way the majority 99% lives. He is an economic Mr. Magoo.

In response to: Mitt Romney's Managed Bankruptcy

F&B [Visitor] — Thu, 25 Oct 2012 13:26:25 +0000

Trey, there really was money available. The banks were hoarding because of uncertainty but loans were available when the risk was very low. The company I work for did several acquisitions during that period of time and obtaining financing was not a problem. This was because of the quality of the investments we were making and the competence of our management team. Government guarantees would have done this for the auto companies, i.e. banks were still lending when there was no risk.

Yes, the Big 3 came to Washington looking for handouts when the government was handing out over 800 billion. Not doing so would have been foolish, why not take free billions if you can get it.

My point is that according to Romney, all we did is delay the inevitable because the automakers' debt was not restructured in a meaningful way, i.e. in a manner that would improve their long term success. Romney, who is an expert in these matters, was looking for a better long-term solution. Even if the short-term would have been a little more painful, all we have done is push that pain off on our children. Romney's recommendations would have let us feel the pain now and would have left the companies leaner and stronger for moving forward into the future.

In response to: Mitt Romney's Managed Bankruptcy

Trey [Visitor] — Thu, 25 Oct 2012 11:52:01 +0000

I don't think of this as a Liberal answer vs Conservative Answer. I think both Liberals and Conservatives (And everyone in between) would prefer any industry be self sufficient and acquire the funding they need to stay afloat and thrive independently.

However; 'Oh but the banks had plenty of money that they were hoarding' is kind of the reason the government had to do it. What was the meaningful alternative? No substantive answer to that question. Just dismissive hand waving.

Funding was not available and the Auto Industry looked to the government. Do you remember how the Auto Executives were derided for coming to Capitol Hill in private jets rather than in their own cars? The Execs came and asked for Government help.

http://money.cnn.com/2008/12/04/news/companies/senate_hearing/index.htm?iid=EL

In response to: Mitt Romney's Managed Bankruptcy

F&B [Visitor] — Thu, 25 Oct 2012 00:41:15 +0000

The liberal approach to this sort of problem is that the government is the only solution, but in fact is just the first solution they reach for. The conservative approach is that government intervention should be the last resort.

This is readily apparent when liberals discuss this situation - they appear to make the assumption initially that government is the only solution and spend all their energy rationalizing that decision, and trying to develop arguments as to why the conservative approach won't work. I really don't believe Romney's approach was ever actually considered as a viable option, just an argument to be argued against.

Romney's Op Ed does not provide sufficient detail to reach the conclusions you have drawn. There was actually plenty of private sector money available but banks were hoarding their cash - government guarantees would have freed this money and Romney knew that. Actually, the guy has proven he is pretty good with money and finances. He could probably jump in at GM and save it the way he saved the Olympics. Either way, GM is still alive, let's just hope that Romney's prediction was wrong. GM's debt burden was not restructured in a meaningful way so their "come to Jesus" moment is just another can Obama has kicked down the road.

In response to: Mitt Romney's Managed Bankruptcy

Trey [Visitor] — Wed, 24 Oct 2012 21:04:20 +0000

Though the Government still has an interest in GM (It's around 27% ownership, not a "majority" or "controlling" interest), I don't think it's a bad thing for GM to have been put under 'charity-funded life support' as you put it, ned. Without the Government bailout, we are told that GM and Chrysler would have folded. I think Gov. Romney's idea would have been sufficient, were it not for the timing of when the auto-bailout was needed. When Chrysler and GM needed the money we were at the height of the financial meltdown. Private funds were unavailable as banks and financial institutions were scrambling for their own liquidity and financial security (remember the bank bailouts?). The Government was all that was left. Will we get our money back? Probably not all of it; But that loss is better than the negative impact to the economy of the Big Three becoming the Big One.

In response to: Mitt Romney's Managed Bankruptcy

ned [Visitor] — Wed, 24 Oct 2012 15:46:57 +0000

Thanks for the heads up Burr. First, it is a stretch to say that the auto industry has been saved when the taxpayers are still holding a majority (?) interest in these companies (GM, at least) and the companies have NOT (yet, probably ever) repaid the taxpayers' funds used to bail them out. But, it has been rich to watch as the President has overplayed this hand. Regardless of the claim that "GM is alive (though it is charity-funded life support)," the difference between Obama's Detroit bankruptcy idea and Romney's Detroit bankruptcy idea is that Obama's paid off the UAW (a Democratic special interest) by flouting hundreds of years of bankruptcy law to put the UAW ahead of other secured creditors. Cronyism over rule of law. Gotta love it. And Democrats are keen on citing fascism as a rightwing phenomenon...the Dems' whole Detroit scheme epitomizes fascism. Romney gave college students a pep talk, Obama gives them a handout (using other people's money or a credit card to the Bank of China). BTW, I'm having trouble seeing past the irony of your story to your attempted moral...Pointy Hair is the one that thinks that free soda is appearing from nowhere and is either naive or derelict in refusing to take responsibility for providing his own soda. Who does that look like in the college student scenario?