** Private ** wrote: > Moreover, the legacy cost that is killing GM and F is benefits being paid > out to ppl who no longer work for the company. Look, these ppl earned > those pension rights and they deserve it. But at the same time, that was > a decision between F/GM and its workers. > > The banking system needed a bailout because a) it was a very healthy > system before this collapse b) it's the most important system that can > cripple the economy if it fails c) they have correctable problems.
The underlying problem you are referring to here is actually the same between the automotive and financial industry: huge liabilities that were never properly factored into the balance sheet of the companies that issued them. Just like GM and Ford never set aside the money they needed to pay out the pension / health care rights the financial industry never set aside the money for the CDS'es they sold. > For whatever reason, fair or not, the automotive industry has problems > that cannot be fixed without major changes. It took the automotive industry about 40 years to come to the point where they may not be able to meet their obligations. It took the financial industry 8 years to blow up spectacularly. Compared to the changes the financial industry needs, the automotive industry really only needs very minor changes. It is just that when the Wall Street stops, society collapses within a week and when Detroit stops, society at large won't notice for a year or so. That is the ultimate reason why they won't get a bailout like Wall Street got. Jochem ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Adobe® ColdFusion® 8 software 8 is the most important and dramatic release to date Get the Free Trial http://ad.doubleclick.net/clk;207172674;29440083;f Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:279729 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5
