Talk of The Villages Florida - View Single Post - This Really Tells You How Bad It Is
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Old 11-23-2008, 11:18 AM
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Originally Posted by Villages Kahuna View Post
As of close of markets on Friday, the market capitalization (the value of all the common stock) of General Motors and Citigroup combined is only about the same as Costco or WalMart of Mexico. The value of both of them is only about a quarter of the value of Apple. In fact, the market cap of GM and C combined is only about 10% of WalMart.

To put that in the perspective of the request put forth by the auto companies last week in Washington, the government could buy both GM and Citigroup and own them outright for $20 Billion, about 20% less than the car companies asked for just to keep going.
Considering that "We, the People" are "the government," do "we" want to throw our money into companies which are dry holes?

If the government buys up the companies, and thus "nationalizes" the industries, we will become what was tried throughout most of the 20th Century by the USSR and failed.

If we allow our elected representatives acting as the government to take via taxation and redistribute it to the control of a select few, whose personal greed indicates they will take it for themselves and not have any "trickle down" in the idyllic belief that they "know better than us" and "it's for our own good," then we have become lobotomized sheep.

Companies have come and gone, either through bad management and greed, or just because the technological changes in the world have rendered them obsolete. I have seen American Motors, Studebaker, and several other car companies disappear because of the marketplace. I've seen Eastern Airlines, TWA, and many other fold, and there are still planes flying and airports have expanded. The buggy whip industry is gone, television antennae manufacturing is fraction of what it was 40 years ago, and the list goes on and on.

What happens to GM, Ford and the others is nothing new, nor will throwing money at them change or deter the inevitable. There was a time in America when there was one major car company and dozens of smaller ones. Business finds its way to cycle, unless we as government try to help its evolution, and we always make it worse by interfering. Our "success" in the shipping industry, ship manufacture, energy production and precision machining in general is best evidenced by the fact that once thriving industries have all but died in the US, but are growing very well and profitable elsewhere on this planet.

This "campaign contributions and votes for money" charade is wearing thin. If the Big 3 consolidate and become the "Big One," that's fine, too.

I have very little empathy for folks who have bet their future on the success of one industry or company because they don't want to learn new skills, don't want to move, or don't want change. During my lifetime I've had to morph myself (including move) several times in order to feed my family and keep it solvent, and I am not alone in having to have done this. That's life. It's a gamble every day, and sometimes you win, and sometimes the dealer removes your chips from the table.

Everywhere in the US there is a city or town almost totally dependent on the success or continuity of a single plant, company or industry, and this issue of "government bailout" will raise its head in every one of them at some time during the life cycle of the product being made there. If "we" give financial CPR to the Big 3 now, will the patients survive or are we delaying the undertaker because the illness has not been treated? If we give to the Big 3, who is next - which vacuum cleaner company? which refridgerator manufacturer? which snack food maker? which telephone company? which distillery? The list is endless....