Anybody else see a problem with 1) the government propping up companies that should be reorganized by bankruptcy 2) taking over these zombie corporations like head crabs 3) and then interfering in all kinds of business decisions?
Air travel post 9-11 is ridiculous in this country. How Citi spends Citi's money is between Citi and Citi's shareholders. Except when the government intervenes.
Now we have a giant mess. Now every interference can be made in the "public interest." Why do employees get free coffee? Why do employees get gym memberships. What about education reimbursement?
From my understanding, there certainly would have been huge crack in the system had some of the big ones gone down just like that. This is because of the incest-like inter-connection between the major players; if one fails, it reneges on its derivative obligations, leaving several others' "naked" to risk. Those affected by this would have either lower credit rating or may not be able to fulfill their derivative obligations and so on.. domino effect.
So, agreed, some of these biggies just had to be stopped from failing (AIG was the king of them)
But what I fail to understand is that why is the government supporting these on an on-going basis? I would expect the government to strictly save them on the terms that they eventually wind down the operations or at least break up and sell to interested parties.
It is very important for companies to fail every once in a while; in this special case the govt. should have helped soft-land their failure not prevented it!
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Anybody else see a problem with 1) the government propping up companies that should be reorganized by bankruptcy 2) taking over these zombie corporations like head crabs 3) and then interfering in all kinds of business decisions?
Air travel post 9-11 is ridiculous in this country. How Citi spends Citi's money is between Citi and Citi's shareholders. Except when the government intervenes.
Now we have a giant mess. Now every interference can be made in the "public interest." Why do employees get free coffee? Why do employees get gym memberships. What about education reimbursement?
What is in the "public interest" now?
I agree 100%, but supposedly the sky would have fallen if these companies would have gone bankrupt? (I have yet to be convinced of this)
From my understanding, there certainly would have been huge crack in the system had some of the big ones gone down just like that. This is because of the incest-like inter-connection between the major players; if one fails, it reneges on its derivative obligations, leaving several others' "naked" to risk. Those affected by this would have either lower credit rating or may not be able to fulfill their derivative obligations and so on.. domino effect. So, agreed, some of these biggies just had to be stopped from failing (AIG was the king of them) But what I fail to understand is that why is the government supporting these on an on-going basis? I would expect the government to strictly save them on the terms that they eventually wind down the operations or at least break up and sell to interested parties. It is very important for companies to fail every once in a while; in this special case the govt. should have helped soft-land their failure not prevented it!