I guess I attract a very narrow demo (oops). I saw that also – I’ll check in with Lookery since that clearly isn’t correct.

• 20 hours ago

I guess I attract a very narrow demo (oops). I saw that also – I’ll check in with Lookery since that clearly isn’t correct.

• 20 hours ago

I guess I attract a very narrow demo (oops). I saw that also – I’ll check in with Lookery since that clearly isn’t correct.

• 21 hours ago

Yeah – this one seems to be a polarizing issue, especially among the people who think Ayn Rand writes philosophy!

I think “bankruptcy” is misunderstood. There’s a huge difference between a liquidation (Chapter 7) and a controlled Chapter 11 where the US government provides the DIP financing, wipes out the value of the common stock, provides capital for a real restructuring, and preserves the appropriate pension liabilities. I’d never suggest that we should liquidate these companies. Nor do I really think I know the answer. However, I do believe that “just giving them $10 billion per company” isn’t likely to solve much of anything the way things have played out in the past.

That was what really prompted my “Take Responsibility For Your Actions” comment. I’ve been an investor and an entrepreneur in a number of companies that have failed. Whenever they failed, there was pain and I lost all the money I had invested in them. I recognize this is on a smaller scale, but I take every failure personally and try to learn from it. It doesn’t seem like any of the current leadership of these companies really understand this, especially when they are – in the words of someone I heard today – totally “tone deaf” about things like flying from Detroit to DC on private planes. It’s a picky detail, but a symbolic one.

• 2 days ago

I disagree with the whole thread on “national security.” I accept that the complete failure of the auto industry has deep negative implications for the US economy, but I’m not suggesting that the US auto industry should liquidate. It’s quite easy – assuming our leadership has real courage – to effect a “controlled restructuring” (call it pre-packaged Chapter 11, call it bankruptcy, call it whatever you want) of each of the major auto companies if desired. This is effectively what the government structured with AIG by taking control of 80% of the equity. Same drill here – if GM gets $10 billion from the US government, the common shares in GM should be diluted dramatically (or eliminated completely.) The union contracts, which appear to help support the non-competitive aspect of these companies – also need to be restructured. I’m sure there are lots of other unsecured creditor relationships that need to change. All of this can be done in a controlled way. And – done very quickly if the leaders really want that to happen.

The only real argument against this that I’ve heard is that people will stop buying GM (or Ford, or Chrysler) cars because they will be afraid they won’t have warranty service. This seems like an straightforward thing for the government to “underwrite” (or guarantee) for new cars that are bought during the restructuring process.

I’m no expert on this so I’m likely completely wrong on the specific solutions. However, my main point holds firm – the leaders of these companies (and the unions) need to take responsibility for their actions. Watching some of the coverage on TV tonight from the Congressional Hearing was remarkable (in a negative sense.) Separate private planes from Detroit to Washington (I would have symbolically flown coach.) Complete inability (or unwillingness) by Waggoner to answer the direct question “how much money – worst case – do you need to stay in business through March 31, 2009.”

• 2 days ago