Obamanomics: Bad for the economy...

[ColoradoChick 33]

See, I knew somebody with much better money smarts would be able to sort out what's what!

I don't have that HUGE college debt for business school for nothing! hahaha

[ColoradoChick 33]

don't disagree , then turn down the money - fold....enter bankruptcy & add more to the unemployment line.

i enjoyed cc's response - i've found however that the socially responsible companies such as the one DH and i worked for are still profitable, no layoffs, and while my stock price sucks compared to '99 or '00 it's been pretty stable.

I totally agree that the companies should have turned down the bailout money. They sold their souls the moment they took the cash and I think the vast majority are regretting the decision. Hopefully they can get the money back to the Treasury soon and cut the chains the government hung around their necks when they cashed the check.

I agree that socially responsible corps can be profitable. It does lower the amount that they can return to stockholders as there is a cost to be socially responsible. I am all for corps deciding how they want to be seen in the world. Some corps will use social responsibility as a marketing strategy to further their market share. Which will hopefully return higher profits to shareholders. Its all about returning profit though - that is why they exist. It feels good to buy from a company that shares your views what ever they may be - such as a company that says they recycle etc.

[BethFromVA 5]

don't disagree , then turn down the money - fold....enter bankruptcy & add more to the unemployment line.

But see, the first part sounds right and proper -- then the caveat is slapped in there about adding more to the unemployment line.

How do we know that many aren't unemployed now because the Henny Penny "the sky is falling" shrieking coming from the government? I know I have read about a LOT of companies who have done just that -- shaved jobs not because they were financially hurting, but because they were afraid they WOULD be due to all the panic in the air.

Is it bad? Yeah, it's certainly not good. Is it as bad as they're making it sound like it is? I don't think it is. I think a lot of it is trumped up because, let's be honest -- they can't waste a good crisis now, can they (said by Clinton and another lib)? If the crisis is enhanced, people freak out. If they freak out, the government can now swoop in and take over. I see what's going on here as being more than just CEOs run amok. I see it as the government taking advantage of an already bad situation and making it worse for its own gain.

[BethFromVA 5]

I totally agree that the companies should have turned down the bailout money. They sold their souls the moment they took the cash and I think the vast majority are regretting the decision. Hopefully they can get the money back to the Treasury soon and cut the chains the government hung around their necks when they cashed the check.

Absolutely! But another problem has arisen, and it was provided in my link a few posts back: Obama is not allowing one bank in particular to refuse bailout money. The bank chose to return the money but was turned down:

Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.

Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He's been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with "adverse" consequences if its chairman persists. That's politics talking, not economics.

Think about it: If Rick Wagoner can be fired and compact cars can be mandated, why can't a bank with a vault full of TARP money be told where to lend? And since politics drives this administration, why can't special loans and terms be offered to favored constituents, favored industries, or even favored regions? Our prosperity has never been based on the political allocation of credit -- until now.

So then what's that all about (asked rhetorically, of course)?

[luluc 6]

But see, the first part sounds right and proper -- then the caveat is slapped in there about adding more to the unemployment line.

I see it as the government taking advantage of an already bad situation and making it worse for its own gain.

what's a slap if in fact companies fold - employees are laid off; they hit the unemployment line? that's a reality not a caustic remark.

on your last statement i quoted - i'm going with the glass half full mentality....i'm just going to hope/pray things turn around - at the end of the day it's only a few months out from mid term elections........the repubes should be actively getting viable candidates rather than slamming obama.

[BethFromVA 5]

what's a slap if in fact companies fold - employees are laid off; they hit the unemployment line? that's a reality not a caustic remark.

on your last statement i quoted - i'm going with the glass half full mentality....i'm just going to hope/pray things turn around - at the end of the day it's only a few months out from mid term elections........the repubes should be actively getting viable candidates rather than slamming obama.

Sorry, I didn't mean to make it sound as if I thought you were being caustic. I didn't. But it's that mentality that if the government doesn't step in, people will lose jobs. People are losing jobs now. Many are losing them who wouldn't if the government wasn't screaming that the sky is falling. And throwing good money after bad has never done anything but delay the inevitable and cost us tons more in the long run.

As for viable candidates, I couldn't agree with you more. As I stated earlier, I joined my local Republican chapter with the intent of watching, listening, and finding out what is really going on in the group. If they continue to try to get us to believe that somebody like McCain was the best we could do, then I am outta there. Finito. I won't hold onto a grasping, heaving beast if that's really what they're all about.

I said previously and I'll say it again: I think the reason Palin resonated so much with the Republicans was because, barring where you stand on her intelligence, her conservative values and the fact that she made us feel she is one of the people is what we so desperately want and were attracted to. At least that's how I felt and most everybody I talked to. Unless the Republican party returns to the people, the people WILL leave, like they did in this election.

[BJean 16]

Colorado: Can you help me out, please. I would like to better understand exactly how a bankruptcy works. I mean a large bank or other large institution that goes bankrupt - what actually happens? What money goes where, who doesn't have to pay what, what happens to the creditors, and all the rest.

I have a good idea about personal bankruptcy but I don't believe that corporations are handled in exactly the same way. I would like to understand how allowing these big guys to declare bankruptcy is a better solution than helping them with taxpayer money with the hope that the taxpayers are going to be able to recoup some of the investment in not only profits, but also they won't be experiencing the losses that they would if a company went bankrupt.

I am sure I'm not understanding how this all works. I'd appreciate you enlightening me. Is your degree(s) in finance?

[BJean 16]

Is there really anybody here who doesn't understand why companies go into business as Colorado suggested?

Are you familiar in any way with companies that do have a conscience, so to speak? Companies like Hewlett Packard, for instance. Ben & Jerry's is a very small company by most standards but they have developed a company with a conscience.

What I mean by that is that they not only opened their doors in order to make a profit. They also wanted to create a decent work place for their employees. They put policies into effect that protected employees from a lot of things that other companies have not. There are so many things I could cite to explain this better, but I honestly think you know what I'm talking about.

And the interesting thing is that those companies (many more than I mentioned) DO make a profit - in fact, they have become very successful. Their employees are loyal and are much more productive than employees who are just a number to corporations.

People who cared about more than money started a lot the good businesses in America many years ago. Companies cared about their employees and treated them with respect. By the same token, employees loved their jobs, took pride in them and became part of a team.

Then many things happened to change it. Way too many things to list here, but for the past 30 years companies have become more and more greedy. They are not satisfied making a healthy profit. Their executives were not satisfied making several million dollars a year. They clamoured to become billionaires - and did not care one whit who they had to hurt to get it. Employees were expendable. In fact, they figured out lots of ways to get as many employees off the books as possible. They farmed out the work to part-timers, illegal aliens and to other countries.

Capitalism is not a bad thing. But with no limitations or checks and balances, they can become bad and detrimental to a decent way of life. In theory what you all are saying is true, people should be able to start a company and run it any way they like. But when they start running on the edge of legality and intentionally harming people just for the bottom line, they need a daddy to slap their greedy little hands.

[BJean 16]

And it's interesting to hear about a bank that didn't want any of the bail out money. Now why do you think that would be the case? Why do you think they want to be able to operate with no oversight? What do they have to hide?

[ColoradoChick 33]

BJean - My degree is in Business with an emphasis in accounting. I am currently working on my Masters in Accountancy. I am by no means an expert in bankruptsy. There are different avenues of bankruptcy. If it is liquidation then assets are sold and proceeds are distributed among creditors. If it is a restructuring which is what I think is the best course of action - then a judge trained in this process guides the company in things such as renegotating contracts such as loans - labor union agreements etc. This restructuring has the sole purpose of joining all interested parties together - work together with a clear end date to reimmurge from the process. Loans may be restructed, employee benfits modified, assets sold - any number of avenues are open to achive a stronger company in the end. A bankruptsy judge has the power to force lenders, unions etc to help the company with lower rates etc.

When you get the tax payer involved it is a sticky process. Taxes were not designed to bail out privatly owned firms. Our government is not expert in running private firms. That of course is my opinion. This type of government action has never happened before in our history. I strongly disagreed with Pres. Bush on his bailout and continue my disagreement with the current administration. I think it is treading on very dangerous grounds. I am opossed to nationalizing private firms. They are either strong enough to survive, go into bankruptsy or go out of business.

This is a short answer to a complicated question. Hopefully it helps!

[BJean 16]

I'm just guessing here but Beth I have a feeling that the reason Palin's entry into the race resonated with you is because she stood up and railed against Obama. She made outlandish claims from the podium. She was given her scripts and doggone it she stuck to it, day after day, venue after venue.

She didn't do well when she got called on some of the stuff she said, but no matter, she got to say it, right?

[BethFromVA 5]

Is there really anybody here who doesn't understand why companies go into business as Colorado suggested?

Are you familiar in any way with companies that do have a conscience, so to speak? Companies like Hewlett Packard, for instance. Ben & Jerry's is a very small company by most standards but they have developed a company with a conscience.

What I mean by that is that they not only opened their doors in order to make a profit. They also wanted to create a decent work place for their employees. They put policies into effect that protected employees from a lot of things that other companies have not. There are so many things I could cite to explain this better, but I honestly think you know what I'm talking about.

And the interesting thing is that those companies (many more than I mentioned) DO make a profit - in fact, they have become very successful. Their employees are loyal and are much more productive than employees who are just a number to corporations.

People who cared about more than money started a lot the good businesses in America many years ago. Companies cared about their employees and treated them with respect. By the same token, employees loved their jobs, took pride in them and became part of a team.

Then many things happened to change it. Way too many things to list here, but for the past 30 years companies have become more and more greedy. They are not satisfied making a healthy profit. Their executives were not satisfied making several million dollars a year. They clamoured to become billionaires - and did not care one whit who they had to hurt to get it. Employees were expendable. In fact, they figured out lots of ways to get as many employees off the books as possible. They farmed out the work to part-timers, illegal aliens and to other countries.

Capitalism is not a bad thing. But with no limitations or checks and balances, they can become bad and detrimental to a decent way of life. In theory what you all are saying is true, people should be able to start a company and run it any way they like. But when they start running on the edge of legality and intentionally harming people just for the bottom line, they need a daddy to slap their greedy little hands.

I agree with you completely -- until the last paragraph. I'm not saying that what these asswipes have done is okay at ALL -- but I never believe that the answer is to have government swoop in, with OUR money, and steal companies away. Especially since they are the LAST to complain about greed and waste, for pete's sake. They virtually invented and perfected the art form.

It's like Hitler telling Jeffrey Dahmer he's a bad man.

[ColoradoChick 33]

BJean - I like companies that take good care of their employees and are socially responsible. I certainly was not trying to offend you by pointing out the purpose of a corporation. I was just trying to point out that corporations do not have to do anything that is not specifically prescribed by the law. There primary objective above everything else is to make money for stockholders.

[BethFromVA 5]

And it's interesting to hear about a bank that didn't want any of the bail out money. Now why do you think that would be the case? Why do you think they want to be able to operate with no oversight? What do they have to hide?

Wait a minute! WHAT?? So you agree, a bank should be forced to keep money it doesn't want because it chooses to remain free of government ownership??

What if the government decided you needed oversight in your home -- how you raise your kids, how much Water you use, how much electricity, what television shows you watch that are unacceptable... I could go on and on. Since when is the government entitled to get its grubby little hands in people's business(es)?? If this isn't the epitome of fascism, I don't know what is. And what's worse is when people believe the government has the RIGHT to do such things!

[BJean 16]

Good job, Colorado. Thank you.

I would agree with you about government interference or bail outs. Except for the fact that it's the taxpayers who are hurt in this economic debacle. Everyone (that I know of) agrees that much of this happened because of absolutely no oversight.

It would be interesting to know if allowing chips to fall where they may, would have been a better solution. But this was affecting most countries and most Americans. It really seemed like it was time for someone to take the bull by the horns and wrestle it to the ground.

Guess we will learn something in this process. At least I hope so. I hate the idea of the bailouts. I just do not have a better plan to offer up and I'm afraid I have to disagree with you about bankruptcy being a reasonable plan for all these companies.