We shouldn’t read too much into meetings such as those of the G20. Even G8 confabs usually produce nothing other than nice announcements. Finance ministers of Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the U.S., the U.K. and the European Union met this weekend in Horsham, England.
According to Bloomberg, the meeting produced the not too unexpected pledges of a sustained effort to end the global recession. The U.S. called for more spending. The Europeans called for restraint. The usual solution was a joint decision to monitor further developments closely. But there were undertones that could signal the end of wholesale bailouts.
The G-20 set a dozen principles. Among them:
Shareholders should be exposed by the “maximum possible” to losses or risks prior to a government intervening. Cerberus won’t like to hear that principle.
Companies that receive help should be run “according to business principles” and impose conditions on executive pay. That principle, if taken seriously, would mean the end of GM.
Authorities should give only temporary assistance and explain how they will end it. That principle, if taken seriously, would mean the end of GM.
Forget a single village. Sometimes it takes a whole world to say NO to GM.
The money itself has no value. Money just reflects the purchasing power within society and is a means of transfering created values through monetary system that is agreed upon.When will US understand that wallstreet creates nothing just increases amount of money supply without creating any consumable value? Any additional money created without creting a product in its value, is inflation. Wallstreet is inflation.ANd if Gm creates money by stock price fluctuations but not real products, it is the same- inflation.And inflation is devaluation of the currency. When the fuck your ubersmart economists will understand that?Any money earned without creating actual product that has a consumable value whether short term or long term,is devaluation of the currency.And devaluation of the currency is measured by very simple means- labour hours needed to earn the due item.If yoy double the price of your house, someone will need to double his amount of labour hours to earn it.What do you think a bailout is?
@ jurisb:
Exactly.
Without tangible goods being produced, wealth is not created.
The leeches on society have always been the bankers, and lately stock marketeers. Both can “create” money. Or “destroy” it. Lately, the hordes of non-productive government workers have added to the burden being carried by those who work to actually create things.
This is basic economics 101, apparently forgotten by nearly everyone.
You cannot eat money, nor drive to work in it.
This is a perfect example of non-news. The reality is: Japs will/are give(ing) their makers money; French will/are give(ing) their makers money; Italians will/are give(ing) their makers money; US will/are give(ing) their makers money; the Germans are pretending not to but if push caomes to shove, guess what? will/are give(ing) their makers money.
Unfortunately all the governments are forced to do the bailout shuffle as long as the US keeps ponying up the cash. Until the tap is shutoff by Obama, this will contiue. Germany, like Canada, is playing for time, hoping the situation changes before the cash is disbursed.
I’m sure everyone is waiting for Chrysler to hit the skids before they can get the money to save a ton.
Any of you guys above read Peter Egan’s article at the beginning of this month’s Road & Track, “The Retreat of People Who Make Things”?
@ Edmond Dantes:
Here’s the article you are referring to from Road & Track
http://www.roadandtrack.com/article.asp?section_id=26&article_id=7716
Excellent point of view.
Quote Peter Egan of R&T: “ After all, assembly line workers with high seniority were dragging down $71 an hour, if you included medical insurance and all their other benefits. Why should a person who never even graduated from law school or sold a single junk bond get to own a house or send a kid to college? It was baffling.”
Uh…would someone please inform Mr. Egan that the vaunted ‘$71 per hour’ figure is not a compensation amount paid to assembly line workers. The ‘$71 per hour’ figure is the total cost per hour when you divide the total costs of retirees, wages, salaries and benefits by the number of active worker’s work hours today.
While I do feel empathy for anyone living in the same region as the Janesville plants, it is kind of scary when even a well-respected superb writer such as Peter Egan gets the figures wrong.
Stu: read the paragraph again. Egan is merely echoing the argument of a commentator on the radio program to which he was listening. He was clearly not presenting it as his own.
That said, Egan is still deluding himself that the problems are a result of the banking industry collapse. No doubt that has made the situation worse, but he fails to acknowledge the dire straits that GM, Chrysler, and Ford have been in for several years.