2008.09.17
Bailout bonanza---who's next?
I'm from Michigan, and I'm looking at the latest proposed multibillion intervention from the government--- a $25 billion loan guarantee to the auto industry---and I'm thinking: When do the bailouts stop?
(Of course, John McCain and Barack Obama have given the idea their blessing. As you know, Michigan and Ohio are battleground states.) I'm mindful of the bailout Lee Iacocca secured for Chrysler in '79, and he turned that company around.
But I'm conflicted. I am a product of GM's largesse that helped create this country's middle-class. As a former employee, I also can say that GM for one hasn't been the most efficient company. And when I broached the idea of SUVs with 6-cylinder engines with my brother, a 32-year employee, he told me to get real. When I talked with my cousin, formerly an engineer with Ford and now a design manager with Nissan, he laughed me out of the room. Fuel efficiency, he noted, meant smaller vehicles with tighter spaces. Americans, he said, wouldn't give up their built-in cup holder space for better gas mileage.
So here we are. Heard an economist on the radio the other morning say that the newspaper industry was in trouble. He asked, tongue firmly in cheek, if my industry was next for a bailout. (Brothers, can you spare a dime?)
Seriously, Wall Street and now Detroit? When does it end---or does it?
s
No Shanna it seems not to end IF you are corporate America. But it you are like myself and many of my single girlfriends, working means less than enough to live confortably, cashing in IRA to stay afloat. Either not being able to sell a house, getting far less than fair market value, when you do sell, or pouring all your time ,energy and hard earned money in house sometimes to repair what you have already paid to have repaired! I used to think I had the bad luck cloud, but my friends are struggling, and no one steps in to help and we have explored all options. I happily sold my oil heated, radon filled fixer upper, clearing just enough to move.
Happy to rent, and stay in more, not caving to high gas prices..just coasting...
Comment by Dona Wheeler Roankoke, Va — September 18, 2008 @ 1:04 am
I want delve into a dissertation on free enterprise, market's supply and demand, or simply political hoodwinking by both the Republicans and Democrats. However, I'm close to thinking only the Libertarian approach with a fair tax passage can save America...wash my brain out with soap for thinking this way. Nevertheless, we should have learned our lesson with Chrysler, later on the dissolution of E.F. Hutton during the Savings and Loan debacle. Granted, this economic upset occurred on the Republican presidential watch but the Democrats stood by and let it happen as long as it didn't upset the apple cart of their major benefactors...a pox on the houses of both parties. What do we do from here? We danced with the devil, now let's pay the piper. Those companies that either due to greed or incompetence should fail in accordance with the laws of free market impetus, and spoiled Americans need to grow up and realize that there are no free rides. This is tough medicine to swallow but it's either that or the body dies from a disease inflicted by a corrupt few. A first step would be to outlaw golden parachutes for failed corporate management as well as serious jail time for government officials that may have or will benefit from this sort of mismanagement.
Comment by Bobby Buck — September 18, 2008 @ 7:35 am
Taxes are for little people."
Most millionaires do pay taxes. In fact, the top 1 percent of earners paid nearly 40 percent of federal income taxes in 2005 — a whopping $368 billion — according to the Internal Revenue Service.
That said, the wealthy tend to derive a higher portion of their income from dividends and capital gains, which are taxed at lower rates than wages (15 percent for long-term capital gains versus 25 percent for middle-class wages).
Also, high-income earners pay Social Security tax only on their first $97,500 of income
The FairTax eliminates the highly regressive tax on wages of the working poor
and middle class.
The FairTax removes the single most regressive element (the payroll tax) for
wage earners.
Payroll taxes are currently imposed on the first $97,500 of earnings but drop
steeply to only a few percent above that amount.
If Obama and McCain is truly concern about the working people this is an excellent place to start.
Comment by Terry B — September 18, 2008 @ 10:01 am
November 12, 1999 President Bill Clinton signed into law the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act of 1933.
Clinton's deregulation of these oversight/regulatory acts affecting the banking industry helped spur on this sub-prime fiasco and the simultaneous 'self dealing' through affiliates both foreign and domestic.
Aug 4, 2008 Nancy Pelosi is having the House of Representatives’s on five-week vacation because of this action the vote too repeal The Gramm-Leach-Bliley Act and the New Energy bill for continued off shore oil drilling exploration lowering oil prices didn't go through on the 1 September 2008. One can only wonder would this bail-out would be happening now...?
Way to Go Democrats you really know how shift the blame and speak for the little man....
I wonder do they have any space available for those that lost their homes....
Comment by Backlash — September 18, 2008 @ 12:32 pm
A lot of good points are made by everyone on this thread, but I disagree that we need a "fair tax". If by fair tax, we are referring to a national sales tax, a la Uncle Teddie, and Mike Huckabee, that hurts the poor far worse than any payroll taxes we have now. Huckabee lost my support when he had the audacity to propose the 23% national sales tax. (That was more of a joke than any of his patented "funnies" that endeared many to him). While the sales tax proposal benefits people like me, who earn a fair amount and spend very little, it is very foolish in that it penalizes the poor, the unemployed, fixed income elderly folks and many others. The system we have now is far from perfect, but neither a sales tax nor a flat tax is the answer to those flaws.
Comment by Mike — September 19, 2008 @ 2:33 am
All just one more blatant reason why our constituitonal republic will NOT be saved or restored without a revolution. Will that be peaceful or violent? Time will tell, but the only options I see at the moment is either the ballot box or the bullet box - and the ballot box is criminally conflicted and impotent - so what option does that leave?
Comment by Percy Kution — September 19, 2008 @ 2:33 am
Mike The FairTax is the only plan that completely untaxes the poor.
Even a person
with a zero percent income tax rate today must pay payroll taxes on the first dollar they earn and
also pay hidden federal taxes in the prices of everything they buy.
The FairTax removes these
hidden taxes, eliminates the payroll tax, and holds all taxpayers harmless against any taxes on
essentials such as food, clothing, and shelter.
The FairTax stops the export of jobs.
Our income tax favors imports over U.S.
production by exempting imports from U.S. tax, and we penalize U.S. exports by allowing
foreign nations to impose taxes when our goods enter their shores.
This adds up to an average 17
percent price advantage over U.S. produced goods, which greatly depresses U.S. exports and
costs us jobs. The FairTax stops this abuse by taxing all goods consumed in the U.S. alike and
untaxing exports
Huckabee was the only candidate that had experience controlling government spending he took Arkansas from 45 state with highest taxes to 28th as Governor he had my vote.
Comment by Terry B — September 19, 2008 @ 10:23 am
Americans are used to bail outs, aren't we? The term bankruptcy is more than just a spelling word in todays' schools. Kids know what it means. But do adults? Bailing out the entire nation? Pass the bucket. Fill it with pennies or start bailing water.
Comment by Heather — September 19, 2008 @ 12:21 pm
Unmentioned are industries that are in "perpetual bailout". Are there not industries / businesses that receive federal subsidies? I've heard that some farmers, airlines, and other transportation companies receive subsidies...but have yet to confirm them.
It is unfortunate that ignorance (or sheer stupidity) is one of the driving reasons for government regulation. My family suffers because some idiot ran out to buy a $600,000 home, then defaulted because the rate adjusted.
Comment by Ed S. — September 19, 2008 @ 12:38 pm
For all you poor, pitiful, naive, brain-washed, still want to believe, HAVE to believe, in this plantation/slave police-state government....and you think there's something you can do the day AFTER the election you couldn't do the day before if you waste your time voting........vote Republican. Republicans will cause a revolution faster than the Democrats and we can start all over instead of wasting more time and money trying to resuscitate a dead democracy.
Comment by Percy Kution — September 19, 2008 @ 2:20 pm
We must "pony up" and admit that the wrong people have been trusted and we have been duped, but the abily to change that is within our power and scope. Playing small serves nothing or no one.
I don't buy into either McKaine or Obama, and I see a lot of smoke and mirrors, so rather that just chucking the whole thing on Nov 4, I will voice my vote for Bob Barr. I will be posting my resons in the opinion section, but surfice it to say that We The People, need to have a 21st century Boston Tea Party.
Comment by Dona Wheeler Roankoke, Va — September 20, 2008 @ 1:39 am
Throw da bums out...as if that is going to happen. I would rather see the director of the FBI reporting that he's got a paper trail on everybody that's profited from this "trickle down scam" going as far back as the Reagan Administration, including the Clinton Administration, up to and through the current administration, and seizing their assets until we can defog this issue; as opposed to the Treasury Secretary telling us how he's going to put the next three generations of Americans into hock with this welfare for rich folks. Unfortunately, what we are hearing from the presidential candidates is the same old medicine, aka snake oil.
Comment by Bobby Buck — September 20, 2008 @ 12:11 pm
The FairTax boosts the real growth and prosperity of the U.S.
Independent
research studies confirm the powerful economic effects. Beacon Hill Institute predicts that real
GDP would be 10.3 percent higher in just four years under the FairTax.
Laurence Kotlikoff,
Ph.D., predicts the capital stock to be 12.8 percent higher by 2010 and 43.7 percent higher by
2030, leading to real wages that would be 11.5 percent higher in 2030 than otherwise would be
the case if the current tax system remained in place.
The Fair Tax levels the Field for ALL AMERICANS.
Comment by Backlash — September 20, 2008 @ 4:55 pm
Are Americans the biggest suckers on this side of the galaxy or what? Here's the deal from the Treasury Department by the Secretary: The USA Gov't raises the debt level by almost a trillion dollars to buy up bad paper (defaulted property loans) in the hopes of reselling that bad paper to more than likely foreign speculators. Now, just whom do you think would have that kind of capital to consider such a risky deal? You guessed it...China or our good old oil buddies in the Middle East. Thanks to both the Republicans and the Democrats...America you can kiss your ...(property) good by.
<So, Bobby, you're saying that before it opens next spring, the new Yankee Stadium could likely be called the "Samsung Ballpark"?--s
Comment by Bobby Buck — September 21, 2008 @ 2:19 pm
Bobby Buck if China finds oil off the coast of Cuba, lets just say I will see you in Spanish class.
Clinton's signed NAFTA into law, Democrats intentionally blocked the repealing Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act of 1933.
By doing this we have the makings for the Stock Market Crash of the 30's.
And President Bush won't use his VETO LINE ITEM POWER, unless Americans don't start thinking of themselves we are going to be in the same mess France and Italy is facing.
Heck Socialize Health Care takes up too 70% of European taxable income another flop comming our way.
When are we going to blame those whom sought the all mighty Euro instead of the dollar.
Comment by Terry B — September 21, 2008 @ 8:35 pm
For those who think there's ANY "fair" tax plan, we'll just have to agree to disagree. If you want to see how a "fair tax" would work on a smaller scale, look at Tennessee, a state that pretends not to have an individual income tax, but a nearly 9% sales tax rate. Even with a supplemental tax on interest and dividends of individuals and a corporate "excise" (a.k.a. income tax) and franchise tax, revenues are woefully inadequate. There's no way a national sales tax won't choke the poor and lead to a large-scale underground economy. Think health care is expensive now? Add 30% on top of it next time you go to the hospital. Another 30% on the gas price? No way. The reason it has remained a concept for so long is that it doesn't merit any further consideration than that.
Comment by Mike — September 21, 2008 @ 11:12 pm
FairTax.org is nonpartisan. Our broken tax system hurts every American, and it will take leaders from all parts of the political spectrum to fix it.
The FairTax is not a political slogan for me our current tax system is nothing but "Legalized Extortion".
Our present system takes what it wants from our weekly pay and give us whats left over telling each person survive on that, This is nothing more than.....
The mob with the Federal Government as muscle.
Comment by Terry B — September 22, 2008 @ 8:49 am
I dont think we should bailout any of the car companies. Maybe this will make them drop their prices on their over priced vehicle so they can stay in business.
John, as a native of Michigan, I can guarantee you none of the Big Three will lower car prices. What the government (and the market) can demand is that they improve fuel efficiency.--s
Comment by John — September 22, 2008 @ 4:31 pm
A guy in my office who just bought a loaded V8 4-seat Ford P/U @ $23K says they are practically giving the 2008 models away now. Market forces are already at work in that industry.
Comment by Mike — September 26, 2008 @ 4:07 am
More about this bozo bailout or middle class America sellout...take your choice. In other words, corporations from housing to autos, people with two or more homes, two or more cars in a household with payments, show-off SUV's, vacations two or more times a year, dining out more often than cooking a meal at home, etc. are going to get the shaft, resulting from the corporate crooks, assisted by government lobbyists who have run off with the gold. Where's the FBI when they are really needed? America has been turned into a house of cards, more accurately, bad paper, with no truth as to the crooks' real assets and liabilities. President Bush through Executive Order can demand cooperation of these swindlers on the basis of national security...if not, the presidential candidates should have the moral courage to say they will, upon taking office. The FBI should then be on the alert to anyone who tries to vacate the US suddenly. I, as an average American, am not going to feel the pinch as much, for I took my education and little money I set aside, and invested in my own business as opposed to sending it to Wall Street or allowing my entrepreneurial drive to be limited by corporate mudddleheads. I offer a needed service that people will receive more in the value of which they pay. In other words, if we don't save an individual money, my associates receive no compensation, and that's the bottom line of our business ethics. We serve needs only, not wants or wishes.
Comment by Bobby Buck — September 29, 2008 @ 7:06 pm