Bailout is No Hope or Help
November 11, 2008
The bailout only treats the symptom, not the cause; poor management and control. Funneling billions of dollars in bailout without oversight is absurd. The money will be spent as it already is being done, on nothing to do with investment in growth and job creation. The companies have no incentive to fix what is broke as long as there is the promise of free cash. Two things must be different in the approach to the “fix”.
First the fix must be changed from bailout to loan. Japan has had several so-called bailouts. None have worked. The funds are spent but the economy does not improve. The same is true with America’s venture into socialism; it will fail, it brings no hope, except to the fat-cats already sticking it to Americans. The only ones benefiting from the bailout are the companies themselves; average Americans will see no benefit. The executives of these “poor, hurting” companies still will attend retreats in $1,000 per night spa resorts, and still reap millions in benefits. AIG still spends millions on itself for the benefit of a few executives; still spends millions on marketing to attend Nascar events and MLB, and the like.
America is turning from capitalism to socialism. Instead of bailouts, the US Government’s fix must be low cost loans (to be paid back to the government, thus the American taxpayers), to infuse funds to get the economy going again. If the companies know they must repay the funds with interest rather than get free billions of dollars, they will work hard and invest in their company to create jobs and growth, rather than spend frivolously.
Second, the root cause must be identified and corrected. The cause is poor company management, poor legislation by Congress, and poor product. The companies have been looking through a vibrant colored kaleidoscope, not looking outside of the straight line. Anyone with an ounce of intelligence should have seen the impending explosion caused by providing large loans to customers with no ability to handle such a loan and histories of inability to handle financial responsibility.
Congress has had legislation to tighten up teh mortgage industry, but the Democrat controlled Congress said NO. The Democrats have to get off of the socialism mantra and infuse some personal responsibility into America, long a Republican platform. The Dem’s plan did not and will not work.
The companies have to take responsibility for their product and services. Now GM wants in the game with some free cash. Ford and GM are successful overseas, but fail miserably here in the US. The product here is poor; from fading and chipping paint to ugly design to horrible engine and drive-train design. Instead of giving free cash to the Big 3, again, provide low cost loans to invest in new quality products and in addition, Congress allow foreign built cars and trucks that are successful overseas to be considered as domestic vehicles in the US for mileage and greenhouse standards requirements.
A win-win situation: The US taxpayers don’t have to foot the bill and companies are forced to do the best job they can. Sounds like capitalism to me. Mich better than socialism.
