Friday, December 19, 2008

Auto Bailout? Hell NO!

As you are aware this current economic crises has been looming for a long time. In my opinion it was driving by not only the liberal media with their disdain for the Bush administration but also by the super large corporations which have been permitted to grow beyond their abilities to operate efficiently. I hear it said referring to the likes of General Motors, AIG & several banking institutions that they are “too big to fail” thus need government to bail them out;. I say if they are that big they should not exist!

This applies particularly to GM whose stockholders deficit grew 40 billion in 2007 after realizing, that their recognition of future tax obligations on profits would be offset with past losses, was in fact a mirage! This principal of accounting was also enabled by the AICPA’s who allowed this violation of sound accounting principles.

These super large corporations become too bureaucratic and no different than governmental bureaucracies. Innovation and imagination is stymied. Very few patents come out of their research departments as they wait for small start ups to prove the value of new products, then like vultures buy them out. The consumers see little if no benefit from this kind of growth.

The solution to this auto fiasco is Chapter 11 bankruptcy, but let the federal government guarantee warranties until they are solvent. At that time they should be required to establish a fund or insurance program that would back up their warranty commitment.

All readers should call their congressional reps and ask them to vote against any further bailout plans.

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