Automobiles

Harshing the Government Motors Buzz

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People totally forgot about the "illegal" part. But it was totally illegal.

Over at The Atlantic, Megan McArdle dismantles the notion that taxpayers should consider the carmaker's return to profitability as vindication for the bailout. Read the whole link-rich piece for reasons why; here is a conclusiony chunk:

What lesson, exactly, are we supposed to learn from this "success"?  What question did it answer? "Can the government keep companies operating if it is willing to give them a virtually interest free loan of $50 billion, and a tax-free gift of $20 billion or so?"  I don't think that this was really in dispute. When all is said and done, we will probably have given them a sum equal to its 2007 market cap and roughly four times GM's 2008 market capitalization.

No, the question was not whether GM could make a profit after a bankruptcy that stiffed most of its creditors and shed the most grotesque burdens of its legacy costs, nor whether giving companies money will make them more profitable.  The question is whether it was worth it to the taxpayer to burn $10-20 billion in order to give the company another shot at life. To put that in perspective, GM had about 75,000 hourly workers before the bankruptcy.  We could have given each of them a cool $250,000 and still come out well ahead compared to the ultimate cost of the bailout including the tax breaks–and over $100,000 a piece if we just wanted to break even against our losses on the common stock. 

And if we'd done that, we'd have saved ourselves in other ways.  We would have reduced some of the overcapacity that plagues the global industry.  We would not have seen the government throwing its weight into a bankruptcy proceeding in order to redistribute money from creditors to pensioners, which isn't a good precedent.

But even if you still think that the bailout was a good idea, there's something you should consider before we start celebrating the administration's Solomonic wisdom: the Obama administration's rush to dispose of its GM stake before the 2012 election is probably costing us billions.  No one I interviewed for my piece on GM was exactly enthusiastic about an early IPO; doing it so quickly meant that the company had very little to show in the way of earnings and stability.  Now the government may rush to sell all its remaining shares this summer even though this means locking in a substantial loss.

Whole thing worth a read.

Uncool at any speed

A chronological sampling of Reason's tracking of premature Government Motors triumphalism:

* Just How Much Will the GM Bailout Cost Taxpayers?, Nick Gillespie, June 30, 2009

* Gov't Panel: GM/Chrysler Bailout a Loser Before It Leaves The Showroom Edit, Nick Gillespie, Sept. 9, 2009

* GM's Phony Bailout Payback, Shikha Dalmia, April 27, 2010

* How The Hell Did GM Pay Back Its Loans "in Full And Ahead of Schedule"? Well, It Didn't, by ReasonTV, April 30, 2010

* GM's Bailout Payback Claims: Untrue at Any Speed!, Nick Gillespie, May 4, 2010

* Obama Motors' Ill-Timed IPO, Shikha Dalmia, Sept. 7, 2010

* Think Twice About Buying GM Stock as a Private Citizen! (Or as a Taxpayer!), Nick Gillespie, Nov. 18, 2010

And heeeeeeeeerrrrre's Nick!

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169 responses to “Harshing the Government Motors Buzz

  1. At least we saved the Chevy Volt

    1. The dance is better than they car.

      1. Help, Barack ran me into a ditch next to that Vega and I can’t get out!

  2. GM had about 75,000 hourly workers before the bankruptcy. We could have given each of them a cool $250,000 and still come out well ahead…

    The thing to remember is that if GE/Chrysler both went under then thousands of other businesses would have followed…parts makers, mechanics, dealers, etc.

    1. Creative destruction.
      You have to let poorly utilized assets be released to allow them to be used in better ways for the economy to grow.

      1. Yes, but until unemployed workers are willing to starve to death peacefully you can’t be too cavilier about it.

        1. Boring troll is boring. Again.

          1. “Free Minds, as long as you think in lockstep”

            Now drink!

            1. talking about starving workers is a great way to kick off a serious conversation. clear troll indicator.

        2. Dying in the streets has to be the anti-libertarian Godwin.

        3. So, you’re saying the UAW workers are so incompetent and unmotivated that they will starve rather than finding another job?

          1. I wouldn’t rule it completely out. . . .

        4. “The bigger and more complex a society is, the bigger and more complex its government should be” – Meta_Man

          wedge:tool::Meta_Man:troll

        5. Why do GM workers starve worse than other workers? You know how many people have been laid off in my industry?

          Oh yeah, those workers don’t make heavy contributions to the Democratic political machine.

    2. Mechanics? Because without GM people would stop driving cars? Or because people would drive more reliable cars?

      The clock on car dealers is running out anyway. Thank the internet for that.

      1. More reliable cars? No… Ford is still on the road, and a lot of people drive those POS vehicles.

        1. I hear they’re changing their name to FORM now that you don’t have to Fix Or Repair Daily in the last 5 years.

          1. Found On Road Dead

      2. A little tear is running down my cheek right now for the GM car dealer.

        THANK GOD we bailed out his company.

    3. but the assumption of all those disappearing is incorrect. There is still a market demand fr a quantity fo cars. Ford, Toyota or some other compnay would have bought up GM real assets, or they would have expanded capacity crating demand upstream. There would have been a shock and probably not smooth, but in the end they wouldn’t all disappear.

    4. Yeah, right, all of GM’s assets would have instantaneously vanished under normal bankruptcy proceedings. There would be absolutely no one interested in buying their brands, their plants, their offices, their blueprints, their patents, and so on. Nope, poof, all up in smoke.

    5. Is someone using the broken window fallacy included in our drinking rules? I sure hope not, because I would end up blacked out every day by about 9:00 am.

    6. Seems kind of arbitrary to me. GM gets bailed out because they have suppliers. Other companies have suppliers too and we could have bailed them out for far less. Where does it stop? At the bottom of the political donor list?

  3. Several of my early cars were GM. A Corvair, Vega Camback and Skylark.
    After the bailout, I’ll never buy another GM. That’s one car company I’ve given too much money to, and not by buying three used cars.

    1. My first car was a ’71 Camaro Rally Sport. I LOVED that car.

      Nothing but Fords since…except for the used Jeep Wrangler and beater Jeep Cherokee I just bought to go offroading.

      Gm? I can’t see ever driving a new one…but I’d love to have another 70 1/2 – 73 Camaro. Best looking car ever next to the Cord and the Jag E Type.

      1. Drove UAW built cars, them bought a Toyota Camry … then a Toyota minivan … and then a Toyota Avalon.

        No more crappy UAW cars for me, ever. I’ve gotten used to reliability, thanks.

        1. That’s pretty much where I am, too. Mrs. Dean drives German, and I can’t see her going back (finances permitting, of course). I drive Japanese.

          To be perfectly honest, I will be surprised if either of us gets a new car in the next 10 years.

        2. Six Subarus and five Nissans since college 25 years ago (currently have a Forrester, Exterra, and 350Z).

        3. Also note how easily the UAW gave up Saturn, the least unionized shop in the GM arsenal.

    2. Same here. Every car I had from the 16 until today has been a GM vehicle… ’77 Impala, ’81 Cutlass Supreme, ’91 Regal, ’00 Bonneville… still have the Bonneville and just got a ’11 Camry. Decided I would not by GM or Chrysler because of the bailouts. But I will never buy a Ford just because their vehicles are terrible. So, I went to get a Toyota and got yelled at by some of my family.

  4. “The question is whether it was worth it to the taxpayer to burn $10-20 billion in order to give the company another shot at life.”

    I think the most disturbing question about GM is what they’ve done to make sure the same thing won’t happen again.

    Ultimately, the reason GM couldn’t compete on low margin economy cars was because of its union contracts–especially because of its legacy workers.

    You can’t cover fat legacy costs by selling thin margin economy cars! Once they piled up all those legacy liabilities to UAW workers–all the rest of their decisions were made for them. They couldn’t have changed their product mix much if they’d wanted to.

    So, the most disturbing question to me is whether they’ve done anything permanent to make sure this never happens again.

    GM went broke because of the UAW. What’s to stop the UAW from gouging GM again now that they’re profitable? How do we know the same thing won’t happen all over again?

    What has made the UAW fundamentally different so that it won’t ever drive GM back into insolvency again?

    The answer appears to be “nothing”.

    1. That’s why a Chap 11 reorg was the best thing GM could have done. this would have let them void their contracts with the unions, and shed some of the legacy costs.

      And that’s exactly why that option wasn’t permitted under the bailout.

      1. Obama bailed out the UAW, not GM.

    2. Of course it’s the Union’s fault! They held the gun to GM’s head and made them sign all those labor agreements.

      Or do you mean how dare workers have the gall to join together and work for their capitalist masters for free?

      1. unions are nothing but cartels – but even if you say unhions are nothing but free market mechanisms (which in this case they are not due to the NLRA), then they need to be allowed to fail. Bailing them out is not a free market.

        1. Of course unions are not free market mechanisms. They are creatures of collectivism.

          However, I would not lay the entirety, or even the majority of the blame on the unions. Sure, they did not help and they deserve to perish. What we can’t forget are the shitty products GM sold.

          GM is a brand of shoddy quality. Not excellence.

          1. Of course unions are not free market mechanisms. They are creatures of collectivism.

            As are corporations…

            1. As are corporations…

              Negative. SOME corporations.

              As opposed to ALL unions.

              1. No, all corporations are charted by the government and given special considerations.

                1. Ah, that one again.

                  “Limited liability” does not mean nearly as much as you and many other people think it does.

          2. i’m not blaming it all on the unions – i’m just saying it’s their fault too. The fact that they are not only overpaid but also overpaid to make shitty products was part of the problem too. Ford survived with its unions in part because it already remade their products and downsized.

          3. and i wouldnt argue a union is necessarily not free market – it is a cartel, but those can exists naturally. The problem with them now is that the federal government explicitly promotes them and ives them special legal priveledges. That’s what makes unions as they stand not not free market.

            1. Again, same with corporations.

              1. You keep using that word, but I don’t think it means what you think.

      2. I think if the workers had joined together and worked for free, this never would have been an issue. Free is a hard labor cost to beat.

      3. “Of course it’s the Union’s fault! They held the gun to GM’s head and made them sign all those labor agreements.”

        Honestly, I wouldn’t care what GM and the UAW did–so long as I’m not the one that has to pay for it!

        But I do have to pay for it!

        So excuse me for hating the disgusting UAW and the disgusting thieves who continue to steal the money they make out of the paychecks of Americans who make a lot less money than they do!

        As long as they keep stealing money out of working taxpayers’ paychecks, they’re the enemy of every working American.

        1. You reap what you sow. I don’t fault anyone for going whatever they can. But if in the process you also bankrupt the company, how does that have anything to do with me?

      4. Of course it’s the Union’s fault! They held the gun to GM’s head and made them sign all those labor agreements.

        No, they held the gun to everyone else’s head. GM management got a pretty sweet deal when all’s said and done.

      5. Of course it’s the Union’s fault! They held the gun to GM’s head and made them sign all those labor agreements.

        What do you think backs up laws that force a “closed shop”? Because the government says “pretty please” or because they have the power of force, ie the gun?

        Yes, Unions did hold a gun to the head of GM.

        1. Believe it or not, most adults understand that laws are needed for a functional society and follow them for that reason. I understand this is probably a new concept for many of you self-centered children.

          1. Funny you mention children. One thing that unions have brought to America is the concept of a day off on your birthday. Paid holiday. We don’t even give children the day off from school on their birthday.

            I don’t begrudge anybody asking for their birthday off, or 3 hour lunches with a free massage. Just give me the option of paying the prices that such waste entail.

            1. It is also funny to this that the group most f’d by unions in this country is Teh Children. Gotta love public schools.

          2. ” most adults understand …”

            Claiming that you are the adult in an argument signals (to me at least) that you’ve got no argument.

            Oh..and STFU

          3. No, most adults follow laws so that they don’t go to jail. Incidentally, the threat of punishment is also the reason children obey their parents. You have no way of knowing the age of anyone here, or their political past, or how self-centered they are. All you know of us are our positions and our arguments: rebut them or shut the fuck up you smug, self-assured, closed-minded fraction of a human being.

      6. Of course it’s the Union’s fault! They held the gun to GM’s head and made them sign all those labor agreements.

        Well, it was the NLRB that held the gun, but there is kernel of truth to this none-the-less.

      7. Of course it’s the Union’s fault! They held the gun to GM’s head and made them sign all those labor agreements.

        You do realize that GM was the Union, and the Union was GM, right?

        This notion that over here, you have this capitalist organization called GM, and over here you have this Union… is bullshit, right?

  5. The free market is a pipe dream – it has failed too many times to be tried again.

    One might say that the government bails out the free market more than anything. Had the Feds not bailed out the banks the entire market would have collapsed.

    Sometimes you have to put practicality over ideology.

    1. Are you claiming that banking is a free market?

      1. Not exactly, but it does illustrate what happens when you deregulate and allow the foxes to guard the henhouse.

        Remember, if you let a handful of people collect all the power, they will use that power to their own benefit…the libertarian catch 22.

        1. Which handful are you talking about ? The one’s who enforce their will with guns ?

          1. The ones who buy their power with money.

            1. So your solution is to make the government even more powerful. I’m sure that will stop those with money from trying to buy influence.

            2. From whom do they buy that power with their money ?

              1. From our elected officials, unfortunately. That’s the catch-22, again…democracy eventually becomes oilgarchy.

                1. Socratic method fails…you are hopeless.

                2. Once again, the U.S. is not a democracy. It never has been, and it (hopefully) never will be. The U.S. is a constitutional republic. If you cannot even grasp the basic determination of our form of government, then how could you possibly believe you grasp any of the complex issues which it must address?

        2. Tell me what exactly was deregulated in banking and then explain to me how such deregulation led to the collapse.

          And don’t say scrapping glass seagle – that bill had nothing to do with countrywide, wamu, indymac, bear stearns, lehman etc.

          1. Scrapping Glass Seagal was a big one…it meant that when investment banks went down it was going to take consumer banks with them.

            The lack of regulation over credit default swaps and the fact that shorting stocks is legal are two other biggies.

            1. Not only can you not spell Glass-Steagall correctly, you have no idea why it was repealed.

              Contrary to your ideology, banks in other countries are actually less regulated than American ones.

              Glass-Steagall was repealed to bring American banking practices more in line with international ones.

            2. Scrapping Glass Seagal was a big one…

              Uh huh.

              http://theworldaccordingtotass…..seagal.gif

            3. What regulation of credit default swaps dou need, other than letting those who took bad risks suffer the consequences?

              And, why should shorting stocks not be legal?

            4. how where commercial banks “brought down”? Every major banjk that failed was either a S&L like countrywide and WaMu or was an indepednent investment bank like Bear stearns and Lehman. In addition the thing that brought down some of the investment banjs where the holding of mortgage securities which are and where perfectly legal for commercial banks to hold prior to getting rid of glass steagle.

              Second before even going into the merits of the other claims – the lack of regulation is not deregulation. You told me deregulation caused this – so you have to show me the removal of regulations.

              1. Dude…Wachovia failed…Bank of America, Wells Fargo, Citibank…all bailed out.

                1. Wachovia did not fail – it was bought out be bear stearnes. Wells fargo was fine – all of the big banks were forced to take TARP – Wells was not happy at teh time. BOA was fine except they bought Morgan Stanley which they were pressured to do by the government – more importantly which you would like to have made that illegal – so that would have been another investment bank failure. Of the major financial holding companies – BOA, Wells Fargo, Wachovia, Citi, JPMorgan, the onyl one that was legit in trouble was Citi, and they have alreayd been bailed out twice and shouldnt have existed. Other than them, allt he major institutions that failed where either S&Ls; or investment banks. Bear stearns and countrywide didn’t fail because glass steagle was repealled. So you still have not show that deregulation was the cause of this crsis.

                  1. * wachovia was bought out by wells fargo

                  2. *and it was merrill not morgan stanley

                  3. BofA bought Merrill. Morgan Stanley’s still independent-ish (I can’t remember what their deal is with Mitsubishi UFJ other than how stupid it is to partner with Japanese bankers).

                2. WFC was bailed out in the same way JPM was: to try and hide the fact that BAC and C were on the ropes, even the healthy banks were expected to take money.

                  Wachovia did not fail, though. They were acquired by Wells for $7/share and never entered bankruptcy, receivership, or anything like that, and the government did not give Wells any money to do it.

              2. Note: Wachovia was only part thrift (via their Golden West acquisition, which was the largest ARM lender and a portfolio lender at that) and would have failed without Wells buying it. Which was, by the way, nice because they didn’t use federal money to do it.

                Also, the broker-dealer model itself was broken. Absent the Fed’s permission to convert to a bank holding company Goldman and Morgan would have gone under, and BofA would have let go of Merrill for it to die. NTTAWWT, in case you noticed the bonus round just after.

                Citi also was right on the edge.

                Still, the vast majority of banks were fine. JPMorgan, Wells Fargo, pretty much every mid-sized regional bank out there (BB&T, Citizens)…

                1. exactly – so without glass steagle being repealed, three more mahjor institutions would have failed.

                2. Trust me, Wachovia did fail…it did not have enough liquidity to meet obligations and nobody was lending at the time…it was out of money. Wells Fargo bought Wachovia for $14B and immediately received $25B in TARP money…

                  1. Yeah, Wells Fargo bought them for $14 billion and then immediately wrote down the portfolio by over $70 billion. And then they turned a profit (on one of the highest net interest margins in the world) every quarter since and paid back TARP. TARP money was a loan, moreover, and the net subsidy to WFC was minimal because of how they priced the warrants (based on average stock price over a year or so).

                    And no, Wachovia didn’t fail. They did not file for bankruptcy or reorganization, and they were not taken into FDIC receivership.

            5. The lack of regulation over credit default swaps and the fact that shorting stocks is legal are two other biggies.

              What on earth makes you think short positions had anything to do with the financial crisis?

              1. the same source that told him banks arent regulated

              2. Because shorting gives people an incentive to ruin businesses. It is crazy that this sort of thing is legal but hey, we don’t want to make the government too powerful…

                1. Which businesses were ruined by shorting? Short interest for most of the failed banks was only a few percentage points.

                  For every malicious shorter out there, there’s a buyer trying to force him to buy shares back by pumping up the price anyway. It’s so difficult to short — cost to borrow shares, risk of a short squeeze, unlimited downside, etc. — that stocks almost universally err on the side of overvaluation.

                2. Because shorting gives people an incentive to ruin businesses.

                  How?

                  It is now obvious that you don’t know very much about how any of this stuff works.

                3. I got news for you. In the business world everybody is trying to destroy each other. While you’re focusing on eating someone else’s lunch there are three businesses looking at yours. And these competitor businesses: they actually have some power to back up their intentions, unlike a speculator who is going to, what, bad mouth the company on an internet chat board?

                4. Because shorting gives people an incentive to ruin businesses.

                  You do realize that shorting only works when there aren’t enough people with confidence in the business to long it, right?

            6. Scrapping Glass Seagal was a big one…it meant that when investment banks went down it was going to take consumer banks with them.

              Tell the Kos Kidz “Hey” for me.

        3. Anyone who thinks the banking market was deregulated is a fucking moron and not worthy of consideration.

          You can’t even be taken seriously as a troll with a piss-poor performance like that.

          1. But but but, George Bush fired all the regulators! What, the number of regulators increased under his administration? Then, then, then… they were stooges who conspired with teh evulll corporashuns!!!

          2. it is amazing how that meme can remain so powerful despite it being so factually incorrect.

    2. So then you are suggesting that the government takes over all means of production.

    3. Oh my, Meta_Man, you have such novel and original ideas. We’ve never heard any of these things before. please tell us more.

      1. I don’t claim them to be novel and original…more like obivous to those who are not idealogues.

        1. Oh, I get your point now…once you pointed out that it’s obvious. The scales fell from my eyes.

        2. Fuckin’ A but you’re stupid. Come back when you’re not reading from Tony’s Big Book of Economics.

          It is very clear already that you’re out of your league here. Go away, come back with some game, and you may save further embarrassment to yourself.

          Seriously.

          1. I know this is completely OT (however I promise to be civil) – this just reminded me of one clusterfuck of a comment thread where someone kept writing about getting some game and cool Levi’s jeans. That was worth a laugh.

            Now what the hell was the thread about?

          2. Meta_man is like Tony-‘lite’. He comes off as a college student who’s never even taken an econ 101 level course. He gets his econ education from people of similar caliber of Naomi Klein.

            Tony, at least, is a little more ‘expressive’, but that probably comes from the fact that he has a degree in english lit.

        3. “more like obivous to those who are not idealogues”

          Short meta: “the collapse of a highly regulated industry proves we need more regulation.”

          1. Yes, again this should be obvious…a lot of things happened that should not have been allowed to happen.

            1. It is so simple. We just need a law to outlaw a bad things.

              1. That would be the FABS law: Fix All Bad Stuff.

              2. More important: we need a benevolent, omniscient and omnipotent governement to make us all do the right things. And, by omniscient, I mean that it has the know the known knowns, the known unknowns, unknown unknowns, and most importantly the unknowable.

        4. I don’t claim them to be novel and original…more like obivous to those who are not idealogues.

          Says the guy who has spouted socialist big-government ideology in this thread.

          “obivous” doesn’t mean what you think it means.

    4. Well, you sure said a bunch of stuff there.

    5. waffles?

  6. Had the Feds not bailed out the banks the entire market would have collapsed.

    This is probably what some high level management douche at AIG would like to have you think.

    Would there have been a correction? Hell yeah. But it would have been the economy picking the winners and losers based on the soundness of their respective business models, not whether they have congressman on speed dial

    1. Would that congressman be one of the handful of people collecting all the power ?

      1. Don’t you understand, Mainer? The more power we give to government, the less money people will spend to have access to that power.

        1. As long as the right people are in charge, of course.

          1. But you want the ultrarich to be in charge, and then you complain when they somehow don’t share your libertarian principles.

            1. “But you want the ultrarich to be in charge”

              I do ?

              1. You may not literally but you favor policies that allow a handful of people to accumulate the majority of weath and thus power.

                1. It’s not so much that Meta_Man minds a small ultra-rich group being in charge. It’s just that they need to be legitimized by calling them “the government”.

                  1. Who cares what you call them, really…you guys are so obsessed with the word “government” that you miss the bigger picture.

                    1. Don’t think of government as guns and laws. Think of it as unicorns and soft, fluffy pillows.

                      Until a Republican is running the show that is. Then it’s guns and laws and hypocrisy and Palin/Bush is an idiot.

                2. Um, the policies that we already have (which are not very free market in any way) have already got us into a situation where a handful of people have a lot of power and wealth. And you want to fix it with more of the same?

            2. We do?

            3. Well, one more to ignore. Thanks Reasonable!

            4. “But you want the ultrarich to be in charge, and then you complain when they somehow don’t share your libertarian principles.”

              I want to be in charge of myself.

              I’m not real fond of politicians being in charge of how my paycheck is spent.

              I don’t want corporations being in charge of how my paycheck is spent.

              I don’t want the UAW being in charge of how my paycheck is spent either.

              When you say the “ultrarich” are in charge, do you mean the UAW? They’re the “ultrarich” ones in this context.

              It’s the UAW–they’re the ones savaging the paychecks of working Americans to enrich themselves.

              I want to be in charge of my own paycheck–not the UAW.

              How did the UAW end up holding such a large chunk of GM’s shares? The “ultrarich” you’re talking about? In this context–that’s the UAW!

            5. But you want the ultrarich to be in charge, and then you complain when they somehow don’t share your libertarian principles.

              Why does Obama keep bailing the rich out?

    2. Trust me, when suddenly no business in the country can borrow money short-term you are going to have a lot of very quick failures, which lead to more business failure because businesses depend on one another. Perhaps the market would have eventually sorted it out but in the meantime people have to eat…

      1. The Galactic Economy will collapse if we don’t give some tax money to the corporatist masters/partners


        for the children.

      2. sounds like a good reason not to cultivate the kind of malinvestment that has been cultivated through the years.

        And continues to be.

      3. What you don’t know about business is alot. Banks are businesses too. They make money lending. When the shit hit the fan in 2008, our company suffered but our bankers didn’t suddenly call our LOC. That would be like us suddenly ceasing sales of our product. The fact that GM’s day of reckoning finally arrived didn’t mean economic activity everywhere was going to screech to a complete halt.

        1. That’s because the government kept the banks in business!

          1. Not our regional bank.

            1. It probably would have as the economy collapsed into depression.

              1. Just F- trolling across the board. Worst thread ever, what is this 2008 again? jesus…

          2. That’s because the government kept the banks in business!

            Wow, you are about 150lbs of awesome.

            Meta_man #1: Evil rich corporashuns are ruling our lives!!11!

            Meta_man #2: The Obama administration must funnel billions into the corporashuns otherwise we’ll collapse.

            What a strange love-hate relationship you have with rich, corporate oligarchs.

      4. This whole people have to eat strawman is not nearly as convincing as you think it is. Starvation is not really a big problem in America.

        Likewise with the whole no business can borrow short term money line, there is no reason to believe that all lending in the US would go away completly in the absence of a bailout, or even that lending would become more difficult. You are just repeating what all the other corporatists have spouted, that in the absence of any real fact or data, we must assume that the only correct course of action is to shower favored banks with capitol. What a total crock.

        1. Also, I thought the US was suffering from an obesity epidemic? I certainly see a lot of fat shits, and Seattle is supposed to be one of the healthier cities in the country. Bring on the starvation!

      5. The idea that the economy is just one big house of cards is just bullshit. Somehow, I just can’t shed a tear for some upper eastside shitbag losing his porsche and having to move to Queens to 4th floor walkup.

      6. I drank too much last night honoring J Sub D. I couldn’t think of anything sufficiently snarky to say.

      7. Soylent Green!

      8. Soylent Green

        1. D’oh!

  7. They [the unions] held the gun to GM’s head and made them sign all those labor agreements.

    Well not their own gun. They rented a few thousand of the federal government’s guns.

  8. Yes, unions these days are so powerful, what with 12% of the workforce being unionized.

    1. 12% of the workforce is a pretty darn big lobby…

    2. And amazingly enough, the other ? of the workforce isnt starving and chained to their desks. How can that be? I have it on good authority that the only thing keeping the evil corperashuns from literally eating us alive is the unions, but how is it that the ? of the workforce that isnt unionized arent soulless slaves???

    3. http://www.opensecrets.org/orgs/list.php

      And yet they make up over half of the top 20 political donors over the last decade or so:

      2. American Fedn of State, County & Municipal Employees
      5. National Education Assn
      6. Service Employees International Union
      8. Intl Brotherhood of Electrical Workers
      9. Laborers Union
      10. American Federation of Teachers
      11. Teamsters Union
      12. Carpenters & Joiners Union
      13. Communications Workers of America
      15. United Auto Workers
      16. United Food & Commercial Workers Union
      18. Machinists & Aerospace Workers Union

      You think they don’t have any political influence? Really?

    4. “Yes, unions these days are so powerful, what with 12% of the workforce being unionized.”

      How’s it feel being a powerful minority with the ability to inflict your will on the majority?

      With impunity!

      You must feel like Moammar Gaddafi or something…

      And when people complain about you stealing money out of their paychecks, somehow you’ll seem to think you’re the ones under siege!

      The problem isn’t that the minority are dictating how the dictator squanders working people’s paychecks on his cronies–it’s that working people are complaining about it?!

    5. Yes, billionaires, bankers, and CEOs these days are so powerful, what with < 1% of the country being billionaires, bankers, and CEOs.

  9. So why, if unions are so powerful, are fewer and fewer workers unionized? Why can’t they use their power to attract new members, and thus more power?

    Instead just the opposite is happening…go figure.

    1. They all have their own reasons, I’m sure, but it all boils down to one:

      Americans workers aren’t unionized as much as they used to be because American workers don’t want to be unionized as much as they used to be.

      1. Not necessarily, many companies engage in very active union-busting…

        1. Not nearly as many as there ought to be.

        2. Same say union-busting and others say defending against extrotion, violence and sabotage.

          1. Yes, I’m sure that’s corporate American’s motivation for working so hard against unions…man you guys live in a bizarro world over here.

            1. Give me an example of this work against unions?

              1. When a shop is approached by a union, management is allowed to rebut the unions pitch and make their own pitch to not bring in the union. Then they vote in secret to prevent repurcussions based on how a worker voted.

                This is unfair because the workers are allowed to vote instead of Meta-Man voting on their behalf.

            2. Are you suggesting that the labor movement doesn’t use violence and vandalism to supplement its legal protests? Because you’re either a liar or painfully naive.

            3. Meta_Man, from the level of your comments I’m assuming your a Soc/Psych major taking his first course from a marxist professor and have never seen how unions operate in the real world. That would make you ignorant and naive which is generally excusable.

              If on the other hand you’ve ever had any experiemce with a union workplace, you’re a liar.

              Because intimidation, extortion, violence and sabotage are the standard tools of the union operative.

    2. Private sector unions are declining but not government sector unions, and those are the ones with more power. Go figure!

      1. It seems based on recent events in Wisconsin they are not so powerful.

        1. Yeah, they only made a dozen State Senators flee the state, leaving their families behind. I have no idea if they made them eat Fear Factor food in Illinois but I’m thinking they could have.

          Can the Koch brothers get politicians to flee their state and families? Maybe they need to hire some union bosses to run their political operation. Get some bang for their buck.

    3. Back when titans of industry were paying people 2 cents a day to grind up child laborers and raw sewage to make sausage, people tolerated a lot of shit out of unions because they were seen as the lesser evil. But like many groups formed to fight a specific evil, they won and didn’t know when to hold a victory party and go home — instead, they had to pursue pettier and pettier aims, but with the same zeal (and ethically questionable tactics) that animated their earlier fights. At some point, it was no longer even clear that they were the lesser evil. That’s when they started going to shit.

  10. Meta Man is The Truth?

    He’s just as stupid and boring.

    1. He’s not stupid and boring. He’s talkin’ some damn exciting stuff!

      Where else will you hear in one breath:

      Down with corporations!

      and

      But if we don’t give the corporations every billion they ask for, the workers will starve!

      It’s like watching a whirling dervish of differing opinions, all from one guy!

  11. Great article! The only thing that was missing, and it’s pretty small, is the ending to one of the early sentences:

    “Megan McCardle Dismantles…”

    There’s actually a lot of ways that could’ve ended:

    “… the credibility of those that agree with her.”
    “… the notion that going to a good college means you have the vaguest idea of what you’re talking about.”
    “… the fervently held belief that Glenn Reynolds is the least self-aware person online calling themself “libertarian.”
    “… the idea that the ridiculous thing she said yesterday is the dumbest thing she’s written online.”

    — any of those would suffice. Keep up the good work!

  12. +a lot

  13. “the Obama administration’s rush to dispose of its GM stake before the 2012 election is probably costing us billions. No one I interviewed for my piece on GM was exactly enthusiastic about an early IPO; doing it so quickly meant that the company had very little to show in the way of earnings and stability. Now the government may rush to sell all its remaining shares this summer even though this means locking in a substantial loss.”

    So, yet again, politicians do something that, if it happened in the private sector, would be probably be criminal.

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