It is, of course, the goal of everyone involved to shift businesses with large government stakes back into the private sector quickly. The question is, how do we define “quickly,” exactly. How about almost two decades?
GMAC LLC, which is giving the U.S. Treasury Department a 35.4 percent equity stake, said on Friday it might take 17 years for the government to shed its investment if the auto and mortgage lender were to go public.
The timetable suggests that federal involvement in GMAC’s affairs could persist long after troubles plaguing the economy and the auto industry end.
The reality is that if time lines like this are the only realistic alternative, we should consider another option:
Punt.
Directly related to this issue is a missive on credit penned by Megan McArdle recently. She closes with:
But maybe it’s worth remembering that the tyranny that credit scores exercise over our imagination have everything to do with the fact that we’ve built a society so utterly dependent on credit. If you didn’t need a credit card, an auto loan, and probably a mortgage to be considered middle class in this society, these opaque and unresponsive bureaus wouldn’t be the most important source of information about us.
Of course, we recognize that to save UAW jobs you have to save car companies and that means boosting car company revenue and that means getting consumers to buy more cars than the situation would generally warrant and that means providing them (all of them) with loads of cheap debt to finance their purchases and that means subsidizing loans and that means saving GMAC no matter what the cost and even if it takes 18 years, $750,000 per UAW job and hundreds of lives. We also recognize that this is supposed to be the brilliant “new way” to reform crony capitalism.
We repeat: Punt.
U.S. could take 17 years to exit GMAC after an IPO [Reuters]
EP,
Why do you hate America? Everyone deserves a rocket popsicle.
@2 – You are not allowed to say that.
PCD right there!
Next up, a series of adverse WTO trade rulings against the US.
This is big deal stuff. So let’s hear it all.
I am interested, tell me more.
EP – you left out the best part. GMAC is now Ally Bank. Sanjay Gupta, the bank’s chief marketing officer, said the company wanted a name that would help it shed the baggage that many Americans now associate with banks.
If there are jobs saved in this bailout the number of jobs involved is much greater than the number of UAW jobs. So the $750,000 per UAW job is fallacious.
Lets be real here: this BS is hypocritical not for the reasons given/implied, but because all the while chastising financial services companies (and their employees), so many Gov’t actions have subsidized and rendered us even more dependent upon their services.
17 dog years at least
New Ally bank ads have children AND ponies in them. This crew is shameless.
“… need a mortgage to be considered middle-class..” Seriously? How are you gonna buy a house? With cash? Give me a break, that’s just plain stupid.
@12
I believe that whatshername is saying is that it should be OK to be considered middle class even if you only pay cash, use public transit, and rent instead of buying a home. That would magically make the credit reporting agencies go away. But it’s stupid to say that. For example, she forgets that your landlord will not rent to you unless they check with those agencies. So follow her guidance and be prepared to live under the freeway bridge, hardly a middle class life. IF she has a beef with the credit reporting agencies, why doesn’t she push for tighter regulations, laws, etc.? Or is whatshername another “free-market” ideologue with unrestrained masochistic tendencies?
Ron Gettelfinger @9:
So what IS the number? It ain’t zero.
An itnelilnget point of view, well expressed! Thanks!
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