Science Forums 2

[Moadib]

The solution is an old one but a good one. Companies with bad business policies or unworkable structure should go bankrupt.
AIG is the easiest. If its "too big to fail...its too big. In my opinion, if AIG totally failed and didnt even try to restructure or downsize, 500 smaller companies or new companies would expand to snatch up market share within a year. Bankruptcy and a good downsizing would be my more appealling. As a sidebar stockholders should pay more attention to the pay structure of the companies they buy.
The lesson - Companies should not spend, invest, or pay CEOs above their means
The auto industry is a case of you made the bed now you lie in it. For far too long auto unions have been over payed and under worked.No comany can pay its labor 3 times as much and have 3 times the downtime and continue to pay its employees 3/4 of their salary after they retire and expect to compete. Every cent a union workers make over nonunion workers, is a cent less competetive the product the union produces becomes. The auto industry is best served claim bankruptcy and restructuring their labor agreements and business model
The lesson - Union should not bite the hand that feeds them.
The housing issues is the only one of these 3 that govt should give loans or bailout money.The govt all but forced banks to make high risk loans to low income people with questionable credit. Throw on top of that the feds slamming the interest rate to the bottom of the basement, further inflating housing prices and you get lots and lots of high risk lower reward loans on overpriced houses. If a govt promted banks to make risky loans. govt (and politicians) should be held accountable. If a bank bought a bad loan from another bank, on the otherhand, that bank should share responsiblity for the loan. Prehaps a govt program to aid homebuyers in house values considering that the seller, bank, and even the buyers own agent have vested interest in that sale priceof a house being as high as possible. I havent thought this one out all the way but possibly govt could absorb some of the forclosures for public housing and cancel some building projects(not that im for public housing but if they are gunna do it at least dont spend so much of my money on it).If banks slow lending for a year or so is that really all that bad? ive always heard Americans dont save enough and have too much credit...
The lesson - Beware politicians bearing gifts. or when government gets involved in a industry, that indusrty becomes an economic drain and usually faulters or fails.
For some its time to reap what they sow and some its time to tighten their belts and for other its time to access values but for all 3 their is a chapter of bankruptcy that can make the transition easier.