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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: thames_sider who wrote (94368)	11/6/2008 1:20:34 PM
From: TimF	Read Replies (2) \| Respond to of 541430

If the company is acquired and debt is held by it, that debt depreciates the value of the asset to the new owner. Its isn't a free lunch. "in any case such restructuring is overall beneficial to the economy." How is it 'beneficial'? Please indicate how taking on debt, shrinking the company and shedding staff is beneficial - don't rely on creative destruction as a useful analogy. Creating destruction isn't a useful analogy, its the actual act in progress. If the company is more profitable with fewer employees, then reducing the number of people it employs increases effeciency and frees up resources to be used in the rest of the economy. Maybe consider Chrysler as an example. Chrysler was bailed out. That bail out by the government was paid back, but it was probably still a negative thing. It helped delay the reorganization and improvements in efficiency in the auto industry. Having Chrysler go under may have been precisely what the American auto industry needed.