GM Bailout? Not After Giving Millionaire Athlete a Free Camaro
Detroit carmakers are seeking a taxpayer bailout. In exchange, General Motors donates a new Camaro to a wealthy athlete. Welcome to America.
Lawmakers are discussing a multi-billion dollar bailout plan for the American auto industry. General Motors, one of America’s largest corporations, would benefit directly from taxpayer funding.
Having failed in gaining your money in exchange for a car, they will now take it directly from your checkbook – with you receiving nothing in return.
The US Congress is getting good at giving out your money to companies whose pockets are already overflowing with excess cash, aka, the AIG debacle. These bailouts are prime examples of capitalistic excess.
College economics taught me twenty years ago that some companies will fail due to adverse market conditions. These failures are limited in scope because the market will adjust to difficult conditions, resources will reallocate, new jobs will replace old ones, and fresh markets will emerge. A free market system benefits a nation by giving corporations freedom to operate and workers an ultimate safety net. Pain is inevitable, but from trouble will be born new opportunity.
Today’s economy is not going as the textbooks had planned. The US government is bailing out institutions to halt the panic in American households. Where is the government getting the cash? Don’t ask, don’t tell. Don’t even worry about. Our kids will take care of everything.
Does GM really need bailout money? I’m skeptical. If they need extra cash, they can go to their friends. Enter Cole Hamels.
Hamels, stud pitcher for the 2008 World Series Champion Philadelphia Phillies, pitched two great games to take the MVP award last month. Hamel’s reward? Joy, satisfaction, marketing opportunities, a forthcoming new contract, and…a brand new 2010 Chevrolet Camaro courtesy of General Motors.
How screwed up is America? One of our best companies, General Motors, is giving away a free and brand new car to a wealthy man. Welcome to America: land of the rich-get-richer and home to an economic system that is baffling the economists.
Investors are dropping GM stock fast. Today’s share price was just under $3. One year ago it was hovering near $30. GM’s value is one-tenth what it was last year. The decision to give away a free car to a rich athlete is about 10% smart as well.
There is no doubt that Detroit is in trouble. So is GM’s rusty image.
18 Comments
Nice write.
well, it’s one of the realities of life,
Of course, you know how it works, always take care of the rich first. Irony. Another engaging well written article. Nice job, Brian.
Thanks for writing what so many people have been afraid to even think about. We have this strange thing now where there is this tug-of-war between capitalism and socialism, and I don’t like it at all. Personally I would love to see purely free markets, without the Government stepping in to finance the stupidity of corporations (or intelligent corporations who won’t say no to a handout).
Yes, lets reward those that already surpass what we make in a lifetime with a valuable gift, and then the companies can file bankruptcy and save even more money. After all, its just another tax write off…. Thanks for a great read!
you are right. That’s what my husband thought too. I think that’s the reality. Anyway, let’s hope that the new administration now will change it.
Thanks guys for taking your economic frustrations out by reading about this proposed bailout and leaving your comments. Lindalulu and Nobert, I appreciate it.
Debra, thanks for your continued encouragement.
Brian, what a great way to put our current situation. Do you see that people…”tug of war between capitalism and socialism.” Yikes!
Countrymom, thanks for your friendship and for feeling it in this article.
Asiaellis, we can always hope.
Thanks again guys.
Brian
If the country can be compared to a family: perhaps a family that tells 90% of its children – sorry, we can’t afford to feed and clothe you, and then gives 10% of its children extravagant gifts, I think that the 90% would have reason for righteous indignation. Then to add insult to injury, the family asks the 90% to please work harder, we are family and need you to contribute more – I don’t know – my analogy breaks down there.
Great info. Well done article. I hate the bailouts of today and dread the ones of tomorrow. There will be many.
Karen and gsm, thanks for interacting with the material. Brian
I like your voice in this article. You are speaking for many many people..bravo!
I don’t know about all the economic stuff…frankly I don’t think anybody does. But I love the picture of stud Phillies pitcher and proud Camaro owner Cole Hamels. By the way, how do get a 2010 car in 2008?
Dalan, great question! But maybe that’s one of the problems with having an upper crust society! Brian
Nice article.
Our automakers have made no attempt to be competitive with foreign automakers. They keep making these gas guslers when gas prices soared to $4.00 a gallon. Then they wonder why their vehicles aren’t selling, and want American tax payers to bail them out when the general public has to pay an arm and leg for their product. duh!
What an excellent analysis. May I tell you that I know another country where such things happen…Your eyes are wide open, Bravo my friend !
Best regards,
François
Darla and hfj and Francois, thanks for reading and for your input. It is amazing that these bailouts are continuing to gain prominence. Who is going to bail us out of the bailouts?
First off GM is looking for a loan that will be paid back once sales pick-up not a hand full of cash that the government will never see again like they gave to the banks.
Secondly GM did not give the car to Cole Hamels to be nice and help him out, it’s called marketing people. Think about all of the exposure they just got for the 2010 Camaro by giving away one car. How many people at the stadium saw it, one top of the press around it, and yes even articles like this put the Camaro in front of people. The exposure of that one car probably sold another 15 in Philadelphia over the weekend.