The Gm Bailout
Table of Contents
1. Introduction 3 2. The Phenomenon 3 3. The theories / the literature 6 3.1 Different economic theories 6 3.2 How would Locke, Smith and Marx evaluate the various events in this case? 7 4. The Reality 8 5. Conclusions/Decisions 9
1. Introduction
The moon is an orbital albino, and it gets tons of sunlight, so I propose Operation Sunscreen, where astronauts coat the surface of the moon with a protective layer of sunscreen. If you care about albinos and the environment, you’ll see this is a good idea. And hey, it’s a better use of taxpayer funds than bailing out private banks.
― Jarod Kintz
Bailing out people who made ill-advised mortgages makes no more sense that bailing out people who lost their life savings in Las Vegas casinos.”
― Thomas Sowell
Those two, rather cynical, quotes on bail outs reflect how most American economists think of those. It’s not a bail out from prison they mean, it is the consciously directed spending of tax money to save a company that is about to go bankrupt because of reasons as bad governance or economic-misplaning.
It is easy to judge, it always was, but how ethical is the judgment? How ethical is the action itself? What moral right and justification does a company have to ask for money from the Government? And how should the Government reply?
We would like to discuss this issue in the following case – at the Example of the Bail out of General Motors by the US Government.
2. The Phenomenon
A bailout is a colloquial pejorative term for giving a loan to a company or country which faces serious financial difficulty or bankruptcy. It may also be used to allow a failing entity to fail gracefully without spreading contagion. A bailout could be done for mere profit, as when a predatory investor resurrects a floundering company by buying its shares at fire-sale prices, for social improvement, as when, a wealthy philanthropist reinvents an unprofitable fast food company into a
1. Introduction 3 2. The Phenomenon 3 3. The theories / the literature 6 3.1 Different economic theories 6 3.2 How would Locke, Smith and Marx evaluate the various events in this case? 7 4. The Reality 8 5. Conclusions/Decisions 9
1. Introduction
The moon is an orbital albino, and it gets tons of sunlight, so I propose Operation Sunscreen, where astronauts coat the surface of the moon with a protective layer of sunscreen. If you care about albinos and the environment, you’ll see this is a good idea. And hey, it’s a better use of taxpayer funds than bailing out private banks.
― Jarod Kintz
Bailing out people who made ill-advised mortgages makes no more sense that bailing out people who lost their life savings in Las Vegas casinos.”
― Thomas Sowell
Those two, rather cynical, quotes on bail outs reflect how most American economists think of those. It’s not a bail out from prison they mean, it is the consciously directed spending of tax money to save a company that is about to go bankrupt because of reasons as bad governance or economic-misplaning.
It is easy to judge, it always was, but how ethical is the judgment? How ethical is the action itself? What moral right and justification does a company have to ask for money from the Government? And how should the Government reply?
We would like to discuss this issue in the following case – at the Example of the Bail out of General Motors by the US Government.
2. The Phenomenon
A bailout is a colloquial pejorative term for giving a loan to a company or country which faces serious financial difficulty or bankruptcy. It may also be used to allow a failing entity to fail gracefully without spreading contagion. A bailout could be done for mere profit, as when a predatory investor resurrects a floundering company by buying its shares at fire-sale prices, for social improvement, as when, a wealthy philanthropist reinvents an unprofitable fast food company into a