I don't understand why we don't treat this like bankruptcy, where that's exactly what happens. The assets roll over into the bankruptcy estate, they are no longer owned by the bankrupt. They are controlled by the trustee in bankruptcy, a representative of the court, that is, the United States Government. It's . . . socialism! And it's as 'Murican as apple pie.
The trustee makes the surviving management account for every nickle of expenditures. decides about asset sales and allocations, btw, voids at will all contracts -- union contracts too -- but all so any contracts guaranteeing bonuses.
The bailed out companies are insolvent. Technically they are bankrupt. They're just being kept afloat instead of being forced to file for bankruptcy. Treat Only reason it isn't bankruptcy is the USG is afraid people will be even more panicked if all these companies go bankrupt. They should be treated under bankruptcy like rules.
This isn't radical. It's totally 100% normal. Even in good years it happens every day. Why isn't this what the BHO admin is doing? Don't tell me, I know. I'm just saying.
--- On Wed, 3/18/09, Doug Henwood <dhenwood at panix.com> wrote:
> From: Doug Henwood <dhenwood at panix.com>
> Subject: [lbo-talk] no BS
> To: "lbo-talk" <lbo-talk at lbo-talk.org>
> Date: Wednesday, March 18, 2009, 10:38 AM
> [from a Financial Times piece on the Swedish bank bailout -
> how un-American!]
>
> Arne Berggren, the finance ministry official responsible
> for bank restructuring, is blunt about the approach he took.
> It was clear from the outset that the government would act
> as a commercial investor, demanding equity stakes in return
> for capital. "We were a no-bullshit investor - we were
> very brutal," he says. The authorities also insisted on
> control. "You take command. If you put in equity, you
> have to get into the management of the business, [otherwise]
> management is focused on saving the skins of the [remaining
> private] shareholders."
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