Perhaps it all comes down to what it always comes down to, money

[MadHound]

We're all standing by in amazement as we watch Detroit being allowed to fail, while Wall St. continues to get gobs of our money thrown at it. We're astonished that Obama is continuing to prop up Wall St., against the advice of some of the smartest people in the world, while he seems to be forcing the automakers down the road to bankruptcy. And some of us wonder why the dichotomy? It isn't because the collapse of one would be less harmful than the collapse of the other. No, having Detroit or Wall St. go belly up would be a huge disaster for our country.

I think that I've found the answer, over at Open Secrets.

Yes, I'm basing my theory on that not so controversial idea that he who donates the most money gets the largest say in what our government does. If you're going to try and argue against this notion, pack a lunch and dinner, because it is well known that our government is a pay for play system with lots of evidence going back decades. That aside, here are the numbers

The automotive sector paid in $497,696 to Obama's presidential run <http://www.opensecrets.org/industries/recips.php?ind=M02&cycle=2008&recipdetail=P&mem=N&sortorder=U>

The financial sector paid in over 28 times that amout, $14,442,282. <http://www.opensecrets.org/pres08/indus.php?cycle=2008&cid=N00009638>

Furthermore, the automotive industry gave the vast majority of its money to Republicans in the last election cycle $13,264,319 or 72% of its total donations, which were $18,376,270 <http://www.opensecrets.org/industries/indus.php?ind=M02>

Meanwhile the financial sector gave $86,192,860 to Democratic campaigns, or 57% of its donations went to Democrats. <http://www.opensecrets.org/industries/indus.php?ind=F07> Also, Obama got 63% of the money that the financial sector doled between him and McCain. <http://www.opensecrets.org/industries/recips.php?cycle=2008&ind=F07>

Now as we all know, big business doesn't make these sorts of investments without expecting a return. Well, the financial sector went big for Obama this year, and it looks like they're getting a maximum of return on their investment. The automotive industry looks like they put their money on the wrong horse, and now they're getting the shaft.

Hmm, pay for play, same as it ever was. Now do you folks get it, that we're living under a two party/same corporate master system of government? And if you're a corporation or sector that pays the right people, you get preferential treatment, possibly to the point of ruining the rest of us, while if you're an industry that made the wrong bet, well, you get the shaft, and if by doing so, the little people who depend on that industry for jobs, who worked and voted for you also get the shaft, oh well. That's the game, pay for play.

Call me cynical, call me wrong, whatever. But there's a wealth of historical evidence that backs me up on this one.

[high density]

1. Detriot being allowed to fail?

For one thing, the fail is on Detroit for the most part. GM was hemorrhaging money even when times were good. Chrysler was a bet made by private capital that has failed.

We're forcing the failing auto companies to RESTRUCTURE. People would be cheering from the streets if restructuring were being forced on the banks.

[MadHound]

2. There are other ways to force a restructure of the auto industry than pushing them into bankruptcy

But that seems to be the Obama plan. Meanwhile, over in the financial sector we see the Obama administration doing everything it can to prevent Wall St. from going bankrupt. In fact we're seeing less of a push for Wall St. restructuring of any sort than what is being directed at Detroit. About the only "restructuring" it seems that the Obama administration is willing to do with Wall St. is continue to, in one form or another, throw vast gobs of money at them, and give them a scolding.

It is the inequity of treatment that I see here that is so galling.

[geek tragedy]

8. How many small businesses depend on lines of credit from GM?

Plenty of them depend on credit from BofA, Citi, etc. Like it or not, when the financial sector gets a cold, millions of others get pneumonia.

The problem with finance was a lack of governmental regulation--with the auto industry it's that they don't know their own industry.

[MadHound]

10. How many small businesses depend on a healthy auto industry

Probably just as many as depend on Wall St. for financing(in fact probably more, since many Wall St. bankers don't deal with small businesses).

[high density]

15. "Wall St" bankers certainly do influence small businesses

It may not be direct lending, but you can be sure it all flows back to them. Small companies that do business with a bank like Citi are at most one step removed from the "Wall St" bankers. I don't know what sort of GM financing you're talking about. Parts suppliers? GMAC isn't even owned by GM anymore (that's Cerberus, the guys that own Chrysler.)

[MadHound]

21. Having owned a small business, knowing others that own small businesses

I can tell you personally that a lot of small businesses don't deal with the big boys like Citi, or even with any body who deals with somebody, who deals with somebody who deals with Citi. The deal with their small local or regional bank or credit union. That's not dependent on Citi, that's dependent on the Federal Reserve.

Meanwhile there are parts suppliers, distribution, sales, repair, parts shops, mechanics, repair shops, transportation, all that and more that are dependent on a healthy auto industry. But I suppose it's OK with you to kiss those jobs goodbye while continuing to throw unregulated billions at the financial sector.

[geek tragedy]

16. Not really. Almost EVERY business requires

lines of credit to make payroll, etc. Even if it's only for a few days at a time.

Also, the vast, vast majority of Americans need lines of credit to buy a car or to buy or improve their homes.

[MadHound]

27. Doesn't mean that they all get them from the big players

Frankly I've never dealt with anybody but my local bank, ever, and there are tens of millions of people who are just like me. The demise of these Wall St. giants would probably more adversely effect the rich, well off and corporate than it would the ordinary person.

[high density]

9. I think there is plenty of time to bring in regulation for the financial industry

GM was given ultimatums and evidently decided to laugh them off. Time is running out for them and quickly.

Obama said he is committed to the survival of an auto industry — on terms that will allow it to compete internationally.

"But we also cannot continue to excuse poor decisions," he said. "And we cannot make the survival of our auto industry dependent on an unending flow of tax dollars."
...
GM failed to make good on promises made in exchange for $13.4 billion in government loans.

http://www.msnbc.msn.com/id/29944834/

[MadHound]

11. Meanwhile we throw hundreds of billions at Wall St.,

And don't even get them to promise a damn thing. Hmmm.

Furthermore, it looks like rather than making the auto industry dependent on an unending flow of tax dollars, we're allowing the financial industry dependent on an unending flow of tax dollars. Why's that? Oh, yeah, back to that whole money thing I mentioned above:eyes:

[high density]

12. How does any business function if our financial system is dead?

So if we let AIG fail, the banks fail, and now the S&P 500 is at 300. How does that help out GM, or Main St, for that matter?

The financial system has been and will be be propped up. Without it, everything else we try is worthless. Then Obama's going to put in regulation to stop the boom/bust cycle of Wall St and these ridiculous financial instruments.

GM has 60 days to woo the White House with a viable business plan.

[MadHound]

14. Frankly the financial sector could survive better in this country if the big boys went under

However if the Big Three go under, our domestic auto manufacturing is gone.

There are plenty of midsize, regional and local financial institutions that could grow and step up to the plate if Citi and AIG or others went under. In fact that's how those big boys started out, as regional institutions that stepped up and expanded when previous big boys failed.

We have no players waiting in the wings of the auto industry, none, zip, zero, nada. If they go, they take our auto industry with them, the last of our true manufacturing base, and hundreds of thousands of jobs with them.

GM has 60 days, where's the moratorium for AIG or Citi? Ah, that's right, there is none, we're just going to continue to throw money at them.

[high density]

19. Ah, now the wild hypotheticals come out.

Obama isn't going to let the "big boys" of the financial industry go under and your expectations of how that would affect the "midsize, regional and local financial institutions" is pretty naive. They'd be bust as well, along with GM.

[MadHound]

24. Go read your economic and financial history

I have, and frankly I can tell you that your contention is full of it. Go educate yourself.

[high density]

26. Thanks for ending this argument with the "I'm right, you're wrong and stupid" post.

:hi:

[MadHound]

29. Not saying that at all,

Giving you a piece of advice, one that I tell many people. If that came across as harsh, sorry. But the truth of the matter is that the only way to make well informed decisions and have intelligent debates is to educate oneself. I've done that, you can do it too.

Oh, and next time don't have such a thin skin. After all, that is one of the rules around this joint.

[high density]

33. We can both be educated on the subject yet have differing opinions.

You can present hypothetical A and come to conclusion Y. I might come to conclusion X about it. It has nothing to do with thin skin, but more of a desire not to just argue in circles.

[MadHound]

37. Question for you,

How much economic and financial history of this country do you know, have you read?

[Raineyb]

17. And yet the financial sector hasn't come up with squat

unless you consider raping the treasury a viable business plan. Which I guess it is for the banks as they can continue to gamble with other people's money and never suffer any losses.

If you think on the off chance that this economy gets back up with these bailouts that the financial sector will allow any regulations that will truly rein them in be enacted I have a bridge to sell you.

Regards

[high density]

22. OK, so what is the solution?

We'll never be able to get regulation so we won't have regulation? What sort of plan is that? Way to go with the defeatism.

The banks at the core have a viable business plan. Take deposits and lend them out, then make money on the interest. GM just wants to survive because it has a lot of jobs. If we want a job factory the government would best be doing that directly on something like energy or technology.

[Raineyb]

35. I've seen no evidence that anyone is remotely inclined to do a damn thing to

regulate the financial industry. So you'll just have to excuse me while I keep my head out of the sand while watching what happens. I make sure my representatives know how unhappy I am with these bailouts. Not that they listen but I'm doing my citizen duty.

The banks ought to be forced to write off their bad assets. They should not be passing these bad assets off on the taxpayers. These banks also have to be broken up. We should never have any company that's too big to fail ever again. Bringing back Glass-Steagal is the least of the regulations that should be put on the financial sector and frankly we should do a hell of a lot more than that. A federal usury law should be put into place as soon as possible. These are just starters I would think.

We have people on welfare work for less than minimum wage to "earn" their check but apparently it is asking too much to put any kind of restrictions on the trillions we give to corporations.

Something is very wrong here but it's not my attitude. I just know better than to be fool enough to hold my breath waiting for regulations that clearly our representatives don't look all that interested in passing nor are they interested in hearing from you about them.

Regards

[girl gone mad]

44. Putting the big automakers into bankruptcy..

despite the benefits of being able to restructure debt, dealership networks and UAW contracts (less important economically than the media would have us believe) will be a protracted affair, especially for GM. Even if consumers believe the companies will emerge, what about the local dealers? If consumers have to drive long distances to get the car serviced, they're not going to buy.

[Phoebe Loosinhouse]

3. Greg Palast summed it up very completely in The Best Democracy Money Can Buy

And I guess it doesn't take very long to fall into line.

[Skwmom]

5. One of the truest comments ever uttered - the mind has the infinite capacity

to rationalize. You can sell out and convince yourself it's really the best thing for you and others. Just listen to some of Bill Clinton's comments. The guy's a master at it.

[Skwmom]

4. If you were a financial crook, could you possibly ask for a better

salesman to sell to the American People the bailout of your corrupt industry? And they made sure that Obama is surrounded by people to make sure he toes the line (e.g., Biden, Rubin, Summers, Geithner, Gensler) etc.

I'm not sure he'll let them go bankrupt. The big money players on Wall Street can make some big bucks if comments by the Whitehouse drive the stock price down, they swoop in and buy it up, and then Obama saves the day by making sure they survive pushing the stock price back up.

Of course he doesn't want to be a populist. Those are the crazy people who go around with pitchforks.


:rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl:

[Pirate Smile]

6. I don't think Detroit is being allowed to fail. I think this is the only way they think they can

save GM. GM isn't going away. It will be restructured to hopefully thrive.

[geek tragedy]

7. The automakers shit their own bed.

The difference between the automakers and the finance institutions is that the financial institutions need to be better regulated--it was bad government policy that allowed them to fuck up so badly. Regulate them more carefully, and that sector will return to sanity.

The automakers simply don't know how to compete with Japan and Europe. They're getting their asses kicked fair and square.

[MadHound]

13. And the financial sector didn't?

Gee, I guess you must of missed the part where idiots on Wall St. decided to bundle up liar's loans, ninja loans and other crap and then pass it off on a gullible public as golden. Let's see, when you screw your customer base over for tens of trillions of dollars, and make it so that your customers are either hurting or broke, I would say that's shitting in your own bed.

I'm not saying that the auto industry didn't fuck up, in fact I've said quite the opposite many times around here(don't believe me, go ask DainBramaged). What I do find outrageous is how two different industries are being treated, when both fucked up equally bad. In fact given the numbers, Wall St. fucked up worse! Yet they're having money thrown at them by the bucketload, no strings attached, while Detroit is getting crumbs and having to toe the line or else.

Does that seem fair to you?

[geek tragedy]

18. Sure, and that's where regulation comes in.

The problem with the auto industry is that they can't compete with the other guys right now.

[Raineyb]

20. What regulation?

We're not even putting restrictions on the free money they're getting now

Regards

[geek tragedy]

23. Actually, several banks are talking about repaying the TARP

money because of what they view as excess regulation/strings attached.

[spoony]

32. Yeah and Ford is avoiding it altogether for the same reason

So how does that fit in with your "can't compete" meme?

[geek tragedy]

38. Okay, GM can't compete.

In 2007, it lost $39 Billion and Toyota made $17 Billion.

GM needs to change the way it does business, big time. And Wagoner should have been fired a while ago.

[spoony]

41. Again, people bought more GMs than Toyotas in 2007

[geek tragedy]

42. So what? They got their asses kicked where it counts. n/t

[spoony]

31. Ugh, more outmoded stereotypical bullshit.

In case you haven't noticed, the "other guys" are floundering, too. No one has any money to buy new autos. Japan's companies are drastically cutting both their domestic and export output. This month alone Toyota slashed its US exports by 70%.

If you're going to rationalise the fiddling while Detroit burns, at least use somewhat coherent arguments from this millennium.

[geek tragedy]

34. 2007: GM lost $38.7 Billion, Toyota made $17.1 Billion

Sorry, but GM just plain sux.

[spoony]

40. GM sold more vehicles in 2007

Other issues caused them to lose money. People buy more GM cars, period.

[geek tragedy]

43. You realize you're arguing for cutting wages, right?

If the problem isn't their sales, but rather their expenses . . .

[MadHound]

36. Key point, right now

I've actually been looking at what the US auto industry is doing, and they are starting to roll out products that Americans want to buy. They're also improving quality and reliability. Given a chance, I think that they can become competitive again, but sadly it seems as though our government doesn't want to do that.

[geek tragedy]

39. Well, whatever business plan they gave the Obama team

didn't impress.

[Political Heretic]

25. Of course this is correct.

That this will be unbelievable to some is simply an indication of how horrible out of touch we are with our far off the rails our political system has gone.

[Romulox]

28. Those who pay our politicians the most $$$ get the most $$$ from the public coffers

You have to be willfully blind not to see the obvious pattern.

[Jennicut]

30. I am all for supporting American workers and unions but why are we supporting these gas guzzling

car makers? They should have caught up with the times long ago and for that they are partly suffering. When you rely on certain brands to pardon the pun...drive your business then you can be sure to eventually fail if times call for a change. GM needs to restructure itself and start building different types of cars, appealing to different types of people, etc. They are finally starting to do this but there is not much hope for them if they do not change quickly.

The financial sector has its own can of worms. Yes the CEOS should all be fired imo. But they also allowed bad assets to basically choke the market. GM does not lend money to people, banks do. One is an old style industry the other deals with financial transactions. We can argue whether we want to nationalize the banks or not (per Krugman) but its still our money at the end of the day that takes care of that. The argument is whether anyone should get rich off buying up the bad assets. Unless we want to take the Rethug point of view and let them all fail....free marketers on DU unite! :sarcasm: