Reply to I miss this kind of Democrat

Forum Index » Political Discussion

Reply to "I miss this kind of Democrat"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=jsteele][quote=Anonymous]http://www.nytimes.com/2012/08/10/business/ben-heineman-railroad-executive-and-johnson-adviser-dies-at-98.html?_r=1&partner=rss&emc=rss

Obama could learn a thing or 2 from this guy's life. Not to demonize business and business people and try and create class warfare. [/quote]

Can you point out an example of Obama demonizing business and business people?
[/quote]

hmm..he ran roughshod over bondholders in the GM bankruptcy, favoring unions over bankruptcy law.
Whenever he needs a convenient bad guy to demonize there's always the oil companies (yeah..the ones who are increasing US production and their gas cousins who found our newest bonanza--shale gas)
and the closely-related class warfare of claiming asking "millionaires and billionaires" to pay a bit more solves anything when he (and everyone who knows the numbers) understands there's no real revenue there---you have to go to the middle class to get the numbers to work.

shall i go on?[/quote]

For a guy always fretting about groups sucking at the government teat, you sure seem unable to recognize a suit with a boob in his mouth.

The bondholders didn't want their fair share of the bankruptcy.  They wanted government money, the new money meant to get the auto industry back on its feet.  The bondholders didn't get a dime for the simple fact that new money never goes to anyone not part of the future post-bankruptcy company.  This is true in private equity, and the government didn't do anything different.  I have been on both sides of these in my investing life, so I know personally.  The bond holders had the ability to dissolve the company and sell the assets, but they didn't.  And the reason is that there was no market in 2008 for a bunch of idle auto manufacturing plants.  The breakup value was crap, and they knew it.  The court knew it, and the court is the arbiter of the law you said they violated.

If your oil company logic is that the most profitable companies should get subsidies, then I guess you are really arguing that government needs to get as big as possible.  What kind of sense does it make to subsidize a mature industry, with record profits due to high prices?  Do you think they are doing us favors?  They are rational capitalists.  They don't give America an "American Price" for gas.  They are exporting gas right now.  And who could blame them, that's just market economics.  But actually giving them tax breaks (and yes many are specific to oil and gas) is the worst use of tax breaks possible.  It doesn't change the price of gas, doesn't get us into a new industry, doesn't support a struggling industry in hard times.  It just gives more money to the investors of a profitable industry.  Worst use of a financial incentive I can think of.   BTW Paul Ryan wanted to end these subsidies.  I suggest you talk to him about your concerns.
[/quote]

yeah I am a suit.  does that mean I can stay w/o being insulted?  I'll stick around until you get personal--i have no patience for that level of debate--let the politicians and talking heads live in the gutter.

re: gm (and chrysler) bailouts--senior bondholders were subordinated to union pension obligations--so a senior lien fell below unsecured.  here's a decent explanation:  http://www.nationalaffairs.com/publications/detail/the-auto-bailout-and-the-rule-of-law  oh please--don't just skip to the bottom and pronounce it biased--really take the time to read it.  yep, can always find a judge to affirm; that's a pretty weak defense to justify overriding 100 years of settled and pretty well-functioning bankruptcy law which somehow worked ok for railroads, airlines, and other big businesses subject to schrumpeter's creative destruction.
...
[/quote]

You may be a suit, but it doesn't sound like you have done many bankruptcies.  They do have a superior position in bankruptcy, but the government was not obligated to contribute cash to any and every deal offered.  And this is why it went down the way it did.  Let's pretend the bailout was by private equity.  Here is how it would work:

Hedge Fund: We're going to pull this thing out of bankruptcy and recapitalize it.  
Debtors:  We want you to make us whole.
Hedge Fund:  No.  we'll pay you some cash but this thing is in bankruptcy and we don't have to pay more than fair value.
Debtors: No way.  You are putting a lower tier of debt ahead of us.  Unfair!   We want our money.
Hedge Fund: We need them and not you.  If you don't like it,  go tell the bankruptcy court what you think this company is worth without us.  Find a buyer for the company or the pieces.
Debtors (to themselves):  Gee, there are no buyers for idle car factories.  Honda, Toyota, Mitsubishi, Daimler - none of them want to buy factories and they certainly don't want the GM brand.  
Debtors to Hedge Fund:  Let's talk

And so that's the way bankruptcies work.  Now replace hedge fund with "US Government".    And if you really think this is illegal, go read the bankruptcy court proceedings, check out the breakup value numbers.  They had no choice but to take a deal, and they took one.

[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics