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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (44806)	8/11/2010 2:32:23 PM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 71588

Re: [a collapse would have cost the taxpayers MUCH MORE MONEY (lost tax revenues, unemployment costs for 2 million plus, massive macro economic deleterious impacts, etc., etc.)] "In the short run, maybe (and only maybe not certainly since you said "MUCH MORE" (with the caps reinforcing that point and making it larger). In the long run probably not. That is a reasonable argument. (Although just that: an 'argument'. Yet to be proven.) It is POSSIBLE that the American auto market could be more efficient or more profitable in the long-run future if one of the "Big Three" domestic manufacturers were resigned to the scrap heap and their production taken from the market. Possible.... But I believe that it is also possible that if that were to happen the market space would simply be taken up by some collection of foreign manufacturers, and thus there would be no efficiency benefits accruing to speak of that would differ from the one possible future to the other. (It is also 'possible' that the American auto market is large enough to support three....) So... all of these (including your possibility) are simply conjectures at this point. Re: "In any case it assumes the company would have failed without the government intervention (beyond normal bankruptcy protection), which is itself questionable. ...but it could have survived." No. I do not regard that as 'questionable' AT ALL. The dealer network would have not been able to withstand a year of two of shutdown, nor the workforce, nor the company's business prospects themselves. Parts would have not been supplied to manufacturing operations, factories seized by creditors, financing unobtainable... the entirety of the business would sink beneath the waves and the parts sold off for scrap. Bondholders would have been lucky to recoup 5 cents on the dollar at the end of the process as the piecemeal liquidation there would have produced such massive loss in enterprise value. Re: #3 response.... [The government influenced, even pressured creditors to accept the idea] So what? ANY large new investor would have done exactly the same --- if not even MORE of that. Newly invested MONEY is not beholden to the old money. (Nor are the interests of new investors the 'same' as those of prior investors, such as the speculators who bought GM's junk-rated bonds within the year preceding the bankruptcy filing after it appeared inevitable. MOST OF THE TIME in the world of investing in fact interests such as those are at crossed swords. <GGG>) And the specific provisions of the "Debtor in Possession" provisions of American bankruptcy law encourage the injection of new money into failed enterprises by granting them EXACTLY THAT kind of a 'stick' they can use against older investors who refuse to pony-up to the bar and help out with new funding. It serves the purposes of the law: to produce viable businesses from the ashes of failures. Re: [MONEY TALKS and B-S walks.] "That's totally unresponsive to the point." Actually that IS THE 'POINT'... albeit put rather colloquially and basely. But that is a succinct description of exactly HOW the Debtor in Possession provision of American bankruptcy law is supposed to work.

To: TimF who wrote (44806)	8/13/2010 9:33:18 AM
From: Peter Dierks	Read Replies (1) \| Respond to of 71588

2.8 Million Uncounted Unemployed by Connie Hair 08/13/2010 Rep. Dave Camp (R-Mich.), top Republican on the House Ways and Means Committee yesterday released information revealing the undercounting scheme used by the Obama administration to mask true unemployment numbers in their latest 9.5% unemployment claims. Reports from the Associated Press on the U.S. Department of Labor data released Thursday on first-time claims for unemployment benefits, a key metric of the current health of the labor market, revealed the highest level of initial claims in six months. From the AP report: First-time claims for jobless benefits edged up by 2,000 to a seasonally adjusted 484,000, the Labor Department said Thursday. That's the highest total since February. Analysts had expected claims to fall. Initial claims have now risen in three of the last four weeks and are close to their high point for the year of 490,000, reached in late January. The four-week average, which smooths volatility, soared by 14,250 to 473,500, also the highest since late February. As the Ways and Means Republican staff pointed out: Last week, the July jobs report showed the official unemployment rate remaining stuck at 9.5% --the 15th consecutive month above 9%. But even those grim statistics mask the true depth of despair in the U.S. labor market. The reason involves how the government calculates the official unemployment rate -- by counting unemployment only among those currently looking for work. Consider the following seemingly contradictory official data for the last three months: * Total employment dropped by 495,000 -- or almost 4/10ths of 1 percent. * Yet the unemployment rate fell from 9.9% in April to 9.5% in July. How can employment and the unemployment rate both be falling at the same time? Because, in the last three months, 661,000 people stopped being counted as “officially” unemployed after they stopped looking for work and dropped out of the “official” labor force. They joined literally millions of others already standing on the sidelines of the U.S. labor market who are without jobs but are nonetheless ignored in official unemployment rate data. In fact, if the current total of 2.8 million uncounted unemployed were included in the labor force, the official unemployment rate would now be over 11%, as the chart below displays. -------------------------------------------------------------------------------- Connie Hair writes daily as HUMAN EVENTS' Congressional correspondent. She is a former speechwriter for Rep. Trent Franks (R-Ariz.) and a former media and coalitions advisor to the Senate Republican Conference. You can follow Connie on Twitter @ConnieHair. humanevents.com