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The core of your argument that it wasn't about "saving the US auto industry" are ignorant nonsense. Alan Mullaly - head of Ford - has said outright, that if GM had gone under Ford would have been in HUGE trouble too because both companies (as well as Chrysler and others) shared the same set of suppliers and without GMs' orders, their mutual suppliers wouldn't have had enough business to survive and thus would have had to shut down, depriving Ford (and the other carmakers who were not in trouble) of the parts the needed to make their vehicles. It's a very interconnected business and the loss of GM (as well as Chrysler) would have essentially caused a domino effect throughout the entire American auto industry.
Ken
So what?
They would have restructured and come back in a better position to compete globally.
"capital injections, Treasury lending, asset purchases, government guarantees, and unusual central bank support and liquidity provision"
Yep. The financial industry was given money, lent money at very low/no interest, able to sell their toxic and devalued assets for full price to the government (taxpayers) bag-holder so as to avoid realizing losses which the government (taxpayers) then has to take, were back-stopped by the government, etc., etc.
"$12.6 trillion in direct aidgiven to the financial sector"
Did you check out the footnote to determine how they calculated the number. It came from an estimate in an IMF report. Most of the 12.6 trillion is from guarantees or promises to provide liquidity if necessary.
"Direct government support for the U.S. financial sector totaled approximately $12.6 trillion, or more than 80 percent of 2007 GDP—a sum over and above what was provided via precrisis Federal Deposit Insurance Corp. deposit insurance limits and the Federal Reserve’s traditional monetary policy operations and lender-of-last-resort functions.[10]"
Then there is the additional $16 trillion that the US taxpayers are on the hook for, because the Federal Reserve loaned it out to US corporations and foreign banks; Google the Federal Reserve audit that was conducted in 2011.
They would have restructured and come back in a better position to compete globally.
WRONG!
They couldn't have restructured at the time because with the credit markets locked up there was no way in which capital would have been able to be infused into the restructured companies. That's WHY GM couldn't simply go into normal bankruptcy at the time. MONEY WAS FROZEN - that was the CORE of the problem to begin with. The entire US auto industry would have grounded to a halt - resulting in an even deeper recession and even HUGER US deficits. That's WHY both Bush AND Obama recognized that a bailout was the only acceptable solution.
You seem not to understand what is actually involved in a restructured bankruptcy. Such bankruptcies require cash infusion from SOMEWHERE and at the time there was no way for that happen.
Yeah, because saving the American auto industry wasn't important. That was millions of jobs plus the supply chain. And even today, the govt's ahead.
I'm completely shocked at the ignorance of americans who think bankruptcy = they were going to go away.. Honestly, dumbfounded that companies like Hershey, Ford, Disney etc would be shocked to hear that you think that when they filed bankruptcy, they arent around anymore.
Thats news to me, but hey, you always provided us with non stop news, cough,... humor.
WRONG!
They couldn't have restructured at the time because with the credit markets locked up there was no way in which capital would have been able to be infused into the restructured companies. That's WHY GM couldn't simply go into normal bankruptcy at the time. MONEY WAS FROZEN - that was the CORE of the problem to begin with. The entire US auto industry would have grounded to a halt - resulting in an even deeper recession and even HUGER US deficits. That's WHY both Bush AND Obama recognized that a bailout was the only acceptable solution.
You seem not to understand what is actually involved in a restructured bankruptcy. Such bankruptcies require cash infusion from SOMEWHERE and at the time there was no way for that happen.
Ken
Weird how Ford managed to restructure..
OVERNIGHT borrowing was locked up, but only a fool, cough, lefties, would suggest that they use overnight borrowing to restructure..
Wow. Since when does capital injections, Treasury lending, asset purchases, and liquidity provision require no money?
From the IMF report that the calculation was based on only 7.5% of the support required money upfront. That would mean only 1.2 trillion upfront. The rest represented potential expenditures from guarantees and liquidity provisions.
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