Do Not Bail Out the Big Three

I couldn't have said it better myself, so I won't. If you agree with this position, you should send a similar message by email to your Congressmen, Senators and the White House.

From: Guerin McClure 
To: comments@whitehouse.gov
Sent: Saturday, December 13, 2008 10:31:09 AM
Subject: Please DO NOT bail out the Big Three

Dear Mr. President:

I voted for you twice and have supported you through all of your very low moments. Your steadfastness in face of adversity and your willingness to challenge conventional wisdom are admirable and will ensure your legacy. However, your desire to "save" the Big Three, circumventing Congress by using TARP money to bail them out, is a mistake.

The bankruptcy system is well designed to handle the problems these companies face. It is counter-intuitive, but a bankruptcy process offers a far greater chance of fixing these companies for long-term survival; a bailout will keep them alive until the next President comes, but not much longer. Problems that went unsolved when these companies enjoyed significant SUV/minivan profits will not be effectively addressed until and unless the companies face a credible threat of liquidation.

In addition to ensuring the long-term survival of these companies, an effective bankruptcy process without government funds will:

a) Prevent the spread of moral hazard. Too many people have learned they can gain from risk-taking while the government covers the downside. Making industrial companies "too big to fail" will only spread this behavior.

b) Save taxpayer money.

c) Help accelerate the economic turnaround. To get out of this recession, the US needs markets to clear. Worthless equity and debt needs to be wiped out; non-economic contracts need to be re-worked; in short, failures need to occur, so good money can pursue good risks. The longer the government tries to prevent the "band aid from being ripped off," the longer the recession will last.

Thank you for your time and consideration of this point of view.
I wish you and your family a Merry Christmas and a happy and healthy 2009.

Guerin McClure
Cincinnati, OH

Do Not Bail Out the Big Three

I couldn't have said it better myself, so I won't try. Anyone who reads this and concurs should send a version of it as an email to your Congressmen, Senators and the White House.

From: Guerin McClure 
To: comments@whitehouse.gov
Sent: Saturday, December 13, 2008 10:31:09 AM
Subject: Please DO NOT bail out the Big Three

Dear Mr. President:

I voted for you twice and have supported you through all of your very low moments. Your steadfastness in face of adversity and your willingness to challenge conventional wisdom are admirable and will ensure your legacy. However, your desire to "save" the Big Three by circumventing Congress to use TARP money to bail them out is a mistake.

The bankruptcy system is well designed to handle the problems these companies face. It is counter-intuitive, but a bankruptcy process offers a far greater chance of fixing these companies for long-term survival; a bailout will keep them alive until the next President comes, but not much longer. Problems that were unsolved when these companies enjoyed significant SUV/minivan profits will not be effectively addressed until and unless the companies face a credible threat of liquidation.

In addition to ensuring the long-term survival of these companies, an effective bankruptcy process without government funds will:

a) Prevent the spread of moral hazard. Too many people have learned they can gain from risk-taking while the government covers the downside. Making industrial companies "too big to fail" will only spread this behavior.

b) Save taxpayer money.

c) Help accelerate the economic turnaround. To get out of this recession, the US needs markets to clear. Worthless equity and debt needs to be wiped out; non-economic contracts need to be re-worked; in short, failures need to occur, so good money can pursue good risks. The longer the government tries to prevent the "band aid from being ripped off," the longer the recession will last.

Thank you for your time and consideration of this point of view.
I wish you and your family a Merry Christmas and a happy and healthy 2009.

Guerin McClure
Cincinnati, OH