To Bail Out Or Die.

Bailouts?
Is it morally wrong to want the government to stop saving companies? I think i would be a little more empathetic if the people we were saving were really struggling, i.e. homegrown shops and restaurants. I would guess 8 out of 10 people would support bailing out their local flairs if they were truly hurting, but to bail out multi-million dollar companies who failed to re-invent their business model, to me that seems wrong. These companies have made MILLIONs of dollars? Why would WE be saving them. Shouldn’t they have some type of business model that would allow for trying economic times?

Who am I talking about?

I don’t get as angry when we talk about protecting banks from a colossal collapse as i do when i hear that yet another multi-billion dollar bailout is being tossed toward the car companies (General Motors, Chrysler) . 

So what should we do?

American Car Companies?

If you can turn a profit, your business model is tragically flawed.  You are in business to make money right?  So if you are not making money why would you even want to stay in business?  How do you make an argument… if you give me more money i can change my business model and turn a profit.  Are you going to buy some new equipment?  Why do you need money?  ‘ you need to maybe work on re-inventing your product so customers want to buy your products?  I don’t understand what money brings?  Besides maybe allowing a company to continue to employee people.  Why not just give more money to the unemployment office?  I really think we let them fail.  Another, hopefully better organized company will form with an idea that will re-invent the way we think of automobiles.  It’s the American way, won company fails, and another sprouts. 

 

 

 

 

Banks?

We devise a strategy to reassure that Checking and Savings (FDIC Insured accounts) are safe.  They have done this by guaranteeing 250k in investments.  Anything else i.e. investment and boring…… better luck next time.  We are treating financial contracts like NFL contracts, they mean nothing.  What good is a written agreement if either side can get out whenever they please?  The government can’t force banks to lend to people that are in good financial status.   The government can’t tell a person that you can only borrow x amount of money if you are making Y, but  a bank can choose not to loan someone money especially if they think they wont abide by the terms of the lease(borrowing way too much money).  People make money by managing risk, if you dont do it correctly there is always chance of failure.    Banks chose to lend to high risk customers, they now need to learn from their mistakes and move on.  A contract is a contract, people were buying in over their head  in hopes to turn a profit on a house.  The only way to teach responsibility is to hold people accountable, and giving a judge the right to re-write mortgages is not the right way to go.  If you are in over your head, you need to talk to your bank, and if they let you re-structure your lease.  If that fails… its time to sell your house or declare bankruptcy.

 

 

Before you go…

Unlike most American reality TV show viewers, i do not like to see people fail.  If you don’t allow people to fail no one can succeed…. it is a painful thought, but the economy is only going to move after the toxic clears.  The faster we can clean up the faster we will rebuild.  Propping up banks and companies only delay the process and we just need to grit and bear it.  So if you agree with what i say… write your congressman and express your concerns….

 

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Posted in Bailout, General, Government

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