| Rath said: Dammit. I go without internet for two days and the thread blows up =P
Ok, the reason why I believe that in some cases the stimulus was healthy was because it pushed companies to the edge of bankruptcy without letting them actually topple. This forced them to slim down and actually become strong companies again, the best example of this is GM. Ideally a recession should trim the fat off of companies, strong companies should weather it without government help (as Ford did) but with government help weaker companies can come out strong. There is no question that without government help companies such as GM would have failed - would that have left the US economy in a better state than it is now? While an argument could be made that it would allow new stronger companies to come through I personally don't believe it would have done much other than left more people unemployed and the US with fewer exports.
In some cases the stimulus wasn't as such healthy as necessary. Fannie Mae and Freddie Mac are possibly the only examples of this. The god-awful overblown companies that are too big to fail. If those two went under at that time there is simply no denying that the US economy would be in the shit even more at the moment. |
I have to disagree. Government bailouts of big companies is not capitalism. It reeks more of socialism with fascist tendencies.
If a company cannot survive without tax payer dollars, then it should fail because it is failing to put out a product consumers will buy. The consumers voted with their wallet, while Government said, "Oh noes you have 2 million union employees, we Democrats don't want to lose your union votes, so we will bail you out because we don't want to lose an election!"
All of these epitomize "too big to fail:"
Fannie Mae, Freddie Mac, GM, and Chrysler were bailed out because the employees of those companies can be counted on to vote Democrat. The blue collar union boys especially, but it gets a little bit murkier with the quasi public/private corporations of Fannie Mae and Freddie Mac.
AIG on the other hand is another beast. If the US Government let AIG fail, then it would have wreaked absolute HELL on the international banking system. AIG in many cases was as big if not bigger in Europe than in the US. AIG had to be bailed out to save globalization.
If AIG failed, you would see conservative Democrats like myself saying, "I told ya so! Globalization is nothing but cheaper goods at Wal-Mart and a year round produce department at Safeway, while the American worker sees his/her living wage blue collar/white collar/manufacturing job exported to third world countries such as China, India, the Philippines, and on. Now that AIG has failed, lets bring those jobs back home."
Then again, this never happened as all were bailed out, while the US housing market continues to see record lows and an intolerable unemployment rate of 10%.
