The US Auto industry.

The American auto companies were bailed out at the US taxpayer's expense. Then the US government let Chrysler fail, and forgave the debt. Now GM is on the verge of collapse and the same thing is going to happen and more taxpayer debt is going to be forgiven. This is a total outrage!

Why lend them money and then let them fail and forgive the debt. It is better to just let them file for bankruptcy and then give them a restructuring loan.

I am all for saving the US auto industry and saving jobs. The US should lend the auto industry whatever money is necessary and put huge constraints on the union, salaries, capacity, nameplates etc. to make them more competitive. Then when the economy turns, they will emerge stronger and viable. It is NOT the auto industry’s fault that they are in trouble. It’s the economy stupid.

　

Electric cars.

Why is Obama pushing the US auto industry to make electric cars? I saw GM’s Puma car and I think it sucks. Who would buy such a crappy car? Gasoline is cheap now. The oil bubble burst. Nobody will ever buy such junk cars and forcing the auto industry will waste billions of dollars making these junk electric cars is absurd.

　

Salary caps.

Why are unrealistic salary caps being placed on TARP recipients. If a top exec gets paid an exorbitant amount of $10 million a year and you cap his salary to $250k, what is the incentive for that exec to stay. If $10 million is too much, then set the cap at $5 million or just fire the exec and try to hire a replacement. If you cut all the top execs to $250k, they will all leave and all the best talent will leave. There is even talk now about capping all exec salaries, even non-TARP recipients. This is totally crazy. Why not cap baseball players, or actors? They make way more money and they are not essential to the economy.

　

Breaking contracts

Why are contracts being broken? The execs at AIG had signed contracts for compensation. Some of the execs were working for $1.00 a year and were counting on their bonuses. Then when the public found out that the bonuses totaled $165 million, there was public outrage and the contracts were voided. Many of the execs quit. The bonuses are less than 1/1000^th of the government bailout of $170billion. The government just totally nixed any chance of ever getting that money back. Who is going to run the company now? Would you work for a dollar a year and a worthless bonus contract?

　

Why is senior secured debt in Chrysler/GM being placed behind non-secure debt?

That is like declaring bankruptcy, and selling your house to pay off credit cards before paying off the mortgage. This is totally absurd. Obama is stating that the debt holders on GM/Chrysler are evil and unwilling to compromise. Of course they are willing to compromise, but why give the UAW more money than the debt holders?

　

Overall, I don’t like the way things are going with salary caps, breaking contracts, raising taxes, spreading the wealth, bailing out companies and then forgiving the debt. Seems like the US will be downhill for many years to come.