GM bailout: The sequel

GM bailout: The sequel http://tinyurl.com/2bslf35
The new General Motors Corp. is trying to heighten interest in its sale of about $10 billion in stock held by its rescuers - the United Auto
Workers health care trust fund and the governments of Canada, the United States and the province of Ontario.
Buyers will get an unusual bonus: the little-noticed forgiveness of about $45 billion in future federal income tax obligations to offset past losses and expenses of various kinds - a second bite of the bailout apple.
Such tax loss carry-forwards are usually routine. Every company that loses money may apply those losses against future income. Ford Motor Co. has about $17 billion in tax assets.
But that treatment is normally banned for companies that go through a bankruptcy as GM did. Bankruptcy normally gives other large advantages such as debt cancellation, which for GM was billions of dollars. The Internal Revenue Service, however, decided that companies that got money under the Troubled Asset Relief Program such as GM (and Chrysler, now owned by Italys Fiat) could apply the normal rule.
If the government kept its 61 percent stake in GM, 61 percent of the second bite of the apple would not matter. But all the stock is to be sold in installments and buyers will own the advantage.
The IRS ruling gives GM extra cash - an advantage that bankruptcy-avoiding competitors could not have foreseen - in addition to its $40-plus billion in debt reduction via bankruptcy. Ford, which did not enter bankruptcy, borrowed heavily and now carries $27 billion in debt on its books.
Ford and 15 or more other competitors cannot be happy with this sly tilt of the playing field.
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friends respect me. The others can do whatever the hell they please."
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On 07/11/2010 3:23 PM, Jim_Higgins wrote:

Not the sequel. Screwing taxpayers worked once, why not tray it again?
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Socialism is a great ideal as long as someone else pays for it. And when
no one is left to pay for it, they all can share nothing.
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Both pure Capitalism and pure Socialism have failed.
Both lead to extremes and if you think the former Soviet or China are Socialistic countries as well as many corrupt states in Africa then you are wrong because they are ultra Capitalistic and very few people own everything.
The best is to have a combination of and get the best out of both.
Each have their merits and each have their shortcomings.
The countries that do realize this are faring much better than those trying to do one or the other to extreme and how much of each is best is the real question.
What is abundantly clear is that one without the other is a recipe for disaster.
Most countries in Europe are getting quite good at the mix.
GM was very good for many years and the socialism inside was not what killed it but rather a confusing management structure and nobody knew what was really going on.
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On 29/11/2010 1:29 AM, Bjorn wrote:

I don't see it so much as either has failed. Canada is a little of socialism and capitalism. Probably more socialist though.
But in either case, corruption is what brings it down. I couldn't care less if it be capitalistic or socialistic if it want 100% honest it would be great by me.
Any system will decay when theft, entitlement, academic idealism theft of resources is too great for producers and providers to support.

My point is shown in Africa. They have every kind of government going and they all fail in corruption.
It houldn't be the workers in the streets looking for jobs, it should be the wasteful civil servants, politicians and non value added lawyers. Part of why North America is failing is the system is supporting far too much non-producing activities and dead weight.

Yep, GM is part of the problem. Sure as hell isn't the solution.
--
Socialism is a great ideal as long as someone else pays for it. And when
no one is left to pay for it, they all can share nothing.
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On 29/11/2010 1:29 AM, Bjorn wrote:

I don't see it so much as either has failed. Canada is a little of socialism and capitalism. Probably more socialist though.
But in either case, corruption is what brings it down. I couldn't care less if it be capitalistic or socialistic if it want 100% honest it would be great by me.
Any system will decay when theft, entitlement, academic idealism theft of resources is too great for producers and providers to support.

My point is shown in Africa. They have every kind of government going and they all fail in corruption.
It houldn't be the workers in the streets looking for jobs, it should be the wasteful civil servants, politicians and non value added lawyers. Part of why North America is failing is the system is supporting far too much non-producing activities and dead weight.

Yep, GM is part of the problem. Sure as hell isn't the solution.
--
Socialism is a great ideal as long as someone else pays for it. And when
no one is left to pay for it, they all can share nothing.
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And as in so many criminal activities by big corporations there were criminals involved in performing the crimes.
One thing is really interesting:
"where are the criminals?"
They are surely not in prison.
Some/most of them got away with the crimes and have money in taxshelters and they also got rewarded for all their criminal works.
A lot of people have lost their jobs/houses/money because of criminal activity but a certain few got away with ruining/robbing everything.
Have we learnt anything from all of this?
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On 30/11/2010 12:53 AM, Bjorn wrote:

I fear our society hasn't learned a darned thing over this.
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I think many people have learned that crime can be lucrative. If you steal enough you get to keep the loot. If you want to rob a bank you buy and/or run one and you can take what you want. Big companies can do anything they never fail because the government will bail them out. Have offices all over the world and you do not have to pay tax anywhere.
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