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Obama Team Said to Explore `Prepack' Auto Bankruptcy

Discussion in 'Political Discussion' started by Real World, Nov 21, 2008.

  1. Real World

    Real World Moderator Staff Member

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    Without knowing what he's going to do, since he's not the president yet, and I believe it will be left to his adminstration to decide on this issue, I like that he's considering a prepacakaged bankruptcy option. I've been watching a lot of CNBC since I got my HDTV back in March (that channel looks amazing in HD!), and this option is one that most economists, or people in the know, seem to recomend as a remedy. The fact that he hasn't dismissed this like Pelosi & Company have, encourages me about Obama. I personally think that bankrupcty is the best option for the Big 3. I'm not entirely opposed to the gubmit getting involved in some financial capacity (as with the TARP). What I'm opposed to is the gubmit signing blank checks without allocating our cash intelligently, or with an actual purpose (as with the TARP). Simply handing them a check to continue their pitfall is an absolute no in my book, as is handing them a check while telling them to build specific types of cars. These companies need to fry themselves from top to bottom, and restructure.


    Obama Team Said to Explore `Prepack' Auto Bankruptcy

    By Linda Sandler and Jeff Green

    Nov. 21 (Bloomberg) -- President-Elect Barack Obama's transition team is exploring a swift, prepackaged bankruptcy for automakers as a possible solution to the industry's financial crisis, according to a person familiar with the matter.

    Obama's team has already contacted at least one bankruptcy- law firm to say that Daniel Tarullo, a professor at Georgetown University's law school who heads Obama's economic policy working group, would call to discuss the workings of a so-called prepack, according to this person.

    U.S. lawmakers yesterday postponed until December a vote on whether to give General Motors Corp., Ford Motor Co. and Chrysler LLC a $25 billion bailout as an alternative solution. Automakers such as GM could use court protection to reduce debt and reject unfavorable contracts.


    Bloomberg.com: Worldwide
  2. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey

    Despite all the hysteria from the Right about Obama somehow being a Marxist or a Socialist, people will learn that this guy has always been a PRAGMATIST. He adheres to no economic ideology except competence and efficiency.

    We need competence and efficiency.

    Post note: Ed Henry of CNN reports that Obama has been in phone contact on several occasions over the past week with Brent Scowcroft. Along with the very real possibility that he will be keeping Bob Gates at Defense, this guy is supposed to be some left-wing Marxist loon?
    Last edited: Nov 21, 2008
  3. Stokes

    Stokes Rookie

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    Romney advocated a managed bankruptcy as well, good for Obama.
  4. Real World

    Real World Moderator Staff Member

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    I have my doubts about that Shmess. I think he's an ideologue personally. We'll see though. Obviously we don't know yet. As for Gates, GW kept Tenet IIRC.
  5. PatriotsReign

    PatriotsReign Rookie

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    I heard Romney on Fox & CNN Tuesday night discuss this. CNN seems to be too "spend whatever it takes" for me. I think CNN had Campbell Brown interviewing Peter Schiff who was advocating "let them fail" and Campbell had a conniption.

    I lean somewhere between bankruptcy and let them fail.
  6. PatriotsReign

    PatriotsReign Rookie

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    One can have an idealist strategy and also be tactically competent and efficient....so you and shmessy could both be right.
  7. sdaniels7114

    sdaniels7114 Rookie

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    Seems to me that the place to start is getting rid of all the top people, including the union heads. They're the ones who got us in this mess. Then find replacements to hold in reserve, that's assuming competent people actually exist. We need to know that these companies have viable cars going forward and will be able to deliver them to the public at a profit before we spend anything.

    Why not call up Honda and Toyota and tell them that if they expand to the tune of 3 million more jobs here in the USA over the next few years, then the first 25 billion* in taxes due on the profits from that expansion will be excused? Or just guarantee that much in loans? At least in that case we'd be working with corporations that don't appear to be run by a bunch of morons. Not to mention the fact that we wouldn't be rewarding disastrous failure.

    *or whatever amount is currently being promoted in the bailout package.
  8. scout

    scout Rookie

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    #15 Jersey

    Funny how Romney advocated bankruptcy which is a totall reversal of what he was preaching to Michigan during the primaries. He'll do well there next time, lol.
    Obama might be exploring bankruptcy, but he's leaning the other way.
    I too started watching CNBC, and like that panel, tho they tend to talk over each other. Galbraith had a good view on the Detroit situation, pro bailout.
  9. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey

    Waxman's defeat of Dingell for the Chair of the Energy Committe is huge.

    That was a clear statement to the Big Three and the UAW that whether they like it or not, they are going to have to leave their beloved 19th century if they want to survive.

    Everyone expected Dingell to beat back the challenge.......until the CEO and UAW President fiasco on Capitol Hill this week. Waxman was considered to be a threat to Dingell's leadership, but a containable one. That was the straw that broke the camel's back.
  10. Stokes

    Stokes Rookie

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    And in fact he called out McCain on saying basically exactly what he is saying now. This is why I wish Mitt would stop pandering for votes and just say what he really thinks. Until he does that he'll never get anywhere.

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