Congress and the White House inched toward a financial rescue of the Big Three auto makers, negotiating legislation that would give the U.S. government a substantial ownership stake in the industry and a central role in its restructuring.
Under terms of the draft legislation, which continued to evolve Monday evening, the government would receive warrants for stock equivalent to at least 20% of the loans any company receives. The company also would have to agree to limits on executive compensation and dividend payments, much like those contained in the government’s $700 billion rescue of the financial industry.
Government edict by government edict, the US is slowly destroying itself. I say go ahead and give the government ownership of everything so we can get through the anarchy and warlord/gangster phases before my grandchildren are born.
As a taxpayer, I feel I own quite enough industries, thanks anyway.
Serious question though: What does it mean “the government” will have a stake, receive warrants, etc? In whose name will they be? Who will submit the proxy votes? Does a government functionary get a seat on the boards, and if so, who (President, Senator, Secretary of Something, Junior Second Assistant to the Assistant Undersecretary of Something?) In essence, I’d like to understand who’s accountable, and how they would protect the interests of the People, since in the USA (theoretically) the government doesn’t exist of itself but only by the consent of the People.
Whomever it is, it seems counter-intuitive to put the least market-driven, most bureaucratic entity in charge of fixing a company and an industry.
For all of her faults and broad strokes, Ayn Rand is looking like an absolute prophet these days.
I can think of almost nothing as bad as having the Federal goverment trying to run a for-profit business, unless they contract out the management to a consulting group based on competition and defined goals for results to get paid their fee.
Somebody help me here. The Federal Government, which spends, or
wastes, billions of dollars in it’s sleep, seeks to tell auto makers that
they should not spend too much money. Is this A case of the blind
leading the blind?
[blockquote]Is this A case of the blind leading the blind? [/blockquote]
Definitely not, as the blind are actually trying to stay out of the ditch as opposed to doing swan dives into it.
Sure, why shouldn’t the government, cloaking itself as the Amercian taxpayer, charge exorbitant interest rates and demand huge equity stakes. Just like their buddies at Citi bank and other financial institutions who borrow at absurdly low rates and charge egregiously high rates and STILL can’t manage to make a profit. Hey, that’s the American way. Feast on people who actually bend their minds and backs to make things while protecting people who suck their blood with usurious terms and interest rates.
I wouldn’t buy GM stock today. Why on earth should my government buy some with my money?
It seems as if the US Gov is not handing out a free no ties loan. If anything they holding the “bugs” under a microscope.