EU to Obama - Quit underminin' the global economy with yer free money!

[GBBob]

Originally Posted by ArlJim78

BK would have been a better option. what we're trying to accomplish is letting the market make the required adjustments. Its much smarter than government planners. if it was understood from the begginning that there would not be any Uncle Sam bailouts, then these companies would not have taken the risks they have. and the ones that did deserve to be flushed. BK is the mechanism that the market uses to repair itself to recover and grow. sure its painful, but what we're doing doesn't get rid of the pain, it just prolongs and delays it.

And I'll even argue that a BK is a bigger cop out than a bail out. At some point, it's six of one, half a dozen of another at that level. Before a DIP ever exists, there would be billions unpaid to debtors who would then in turn either have filed or had to release millions to unemplyment. The trickle down effect of the auto industry is incredible...I know it's easy to blast the CEOs in their planes, but you keep talking about the "market"...i think we're beyond that.

[ArlJim78]

Originally Posted by GBBob

And I'll even argue that a BK is a bigger cop out than a bail out. At some point, it's six of one, half a dozen of another at that level. Before a DIP ever exists, there would be billions unpaid to debtors who would then in turn either have filed or had to release millions to unemplyment. The trickle down effect of the auto industry is incredible...I know it's easy to blast the CEOs in their planes, but you keep talking about the "market"...i think we're beyond that.

it makes no sense to prop up diseased companies in order to avoid the unemployment. it scares me a lot because I work for a US autoparts supplier, I'm aware of the far reaching effects those companies have.
like i said, there is pain, you can't avoid it. but those people that get laid off get retrained or picked up in functioning companies in growing industries, or learn something new, or whatever. if you short-circuit that mechanism then our resources are never rationally utilyzed.
there was 100% employment in the old soviet union as I recall. also 100% poverty.