An Analysis of the 2009 Auto Bailout

An Analysis of the 2009 Auto Bailout Essay
I. Background
The three major Detroit–based manufacturers of the American automotive industry, General Motors, Chrysler and Ford, are jointly referred to as the
Big Three for distinguishing their operations from those of competitors in terms of size, sales, geography and profits. In early 2009, the Big Three
found themselves covered in debts and losses as the U.S. Government handed them an initial bailout package worth $25 billion to rescue them from
bankruptcy (Isidore).
Through an analysis of the ethics behind government bailouts and an evaluation of arguments for and against the decision to give out such a package
to the auto firms, I shall argue in this paper that, given the circumstances in which the decision had to be hastily made, ... Show more content on
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These loans and fiscal backings provided short–term operating cash for the firms and kept auto–loans available for future consumers.
Prior to the Federal Deposit Insurance Act (FDIA) of 1950, federal regulators could take only one of two approaches for dealing with an insolvent
corporation: force permanent closure of the firm, or encourage other firms to purchase the dissolved one. The FDIA made it possible for the
government to provide assistance to firms through loans and asset acquisition until they recovered and performed better. As this third option involves
the directing of public money into salvaging private corporations, its application has been a matter susceptible to great contention since the act's
creation.
Thus, ever since its approval, the auto bailout package has given rise to widespread debate concerning the ethics of governments aiding firms in
distress. Those who root for the government bailout argue on consequentialist grounds and bring to light the severe negative long–term effects of the
firms going bankrupt in the absence of external aid. A cost–benefit analysis of the effects of giving out aid versus letting the companies go bankrupt is
often a key element of such arguments. Those who argue against the bailouts base
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The Aig Bailout
The AIG Bailout William K. Sjostrom, Jr.в€
— Abstract On February 28, 2008, American International Group, Inc., the then largest insurance
company in the United States, announced 2007 earnings of $6.20 billion or $2.39 per share. Its stock closed that day at $50.15 per share. Less than
seven months later, however, AIG was on the verge of bankruptcy and had to be rescued by the United States government through an $85 billion loan.
Government aid has since grown to $182.5 billion, and AIG's stock recently traded at less than $1.00 per share. The Article explains why AIG, a
company with $1 trillion in assets and $95.8 billion in shareholders' equity, suddenly collapsed. It then details the terms of the government bailout,
explores why it was... Show more content on Helpwriting.net ...
Comm. on Banking, Housing & Urban Affairs, 111th Cong. 1–2 (2009) (statement of Donald L. Kohn, Vice Chairman, Board of Governors of the
Federal Reserve System) [hereinafter Kohn Statement], available at http://banking.senate.gov/ public/_files/KohnStmtMarch52009.pdf. 2. Press
Release, American International Group, Inc., AIG Reports Full Year and Fourth Quarter 2007 Results (Feb. 28, 2008), available at http:/
/idea.sec.gov/Archives/edgar/data/5272 /000095012308002282/y50505exv99w1.htm. 3. Yahoo! Finance, AIG: Historical Prices for American
International Group, Inc., http://finance.yahoo.com/q/hp?s=AIG (last visited Sept. 29, 2009) (on file with the Washington and Lee Law Review).
THE AIG BAILOUT 945 loan.4 Government aid has since grown to $182.5 billion,5 and as recently as June 2009 AIG's stock traded at less than
$1.00 per share.6 AIG's collapse was caused largely by its $526 billion portfolio of credit default swaps (CDSs), a type of credit derivative widely
used by financial institutions but, up until recently, largely unknown by the general public.7 AIG's troubles have been covered extensively by the
media but are difficult to comprehend fully because of the esoteric financial instruments involved. Thus, this Article weaves explanations of CDSs,
asset–backed securities, securitization, tranching, and collateralized debt obligations into a detailed and systematic account and analysis of

Why The Bailout Plan Has To Be Passed And Its Adjustments...
It is necessary to pass the bailout plan in order to help and stimulate the economy. Not only will it have an impact on the American economy but on
global markets as well. Instead of focusing on bailing out failed companies, the plan should center more on homeowners and help them to pay off
their debts. By doing this, the bill would help homeowners as well as companies who are in possession of these kinds of troubled assets. Politicians
should be less focused on their reelection and more focused on voting for what will be best for their country and the global community. The
government has to pass the bailout plan in order to free up banks and restore some liquidity back to the markets by taking on bad loans. The whole
global financial ... Show more content on Helpwriting.net ...
This way the government will collect most of its $700 billion investment back. In addition, not all assets will be purchased. As an alternative, some
companies could choose to purchase insurance instead. However, the bailout plan as of today needs some modifications. Instead of only concentrating
on buying bad assets from financial institutions and banks, it should pay more attention to homeowners. The assets that the government plans on
buying are mostly impaired mortgages –related assets that have fallen because of the housing sector and knocked holes in firms' balance sheets.
Therefore, if focused on homeowners, this problem can be dealt with from the beginning. It will reinstate up to 80% of the $500 billion already
written off by Wall Street as toxic loans. This way, the government will put in $500 billion and instantly get back the $500 billion. It will also
refinance 100% of loans, thereby giving banks 100% of value on corresponding securities instead of the 30% to 50% if securities would be sold to the
government. Furthermore, refinancing homeowners will stabilize the entire real estate market and create a 30% to 70% greater monetary return since
taxpayers now own these mortgages. Homeowner loans should be refinanced through the Hope of Homeownership program, due to start in October of
this year. Property holders who cannot meet their current mortgage terms will be able to modify their loans into more affordable fixed–rate loans.

Subtle Changes in Language Create Media Bias Essay
In the past few years, the news media has become more competitive, more extensive, and more globalized than ever before. Reporting occurs in near
real time from almost any location to the consumer's television or computer screen. With so many news agencies now vying for precious minutes of a
consumer's time, it is common for a story to undergo slight alterations that make it more emotional or sensational. Several consequent transformations
of the same story can lead to extreme misreporting on the actual content, and oftentimes it is difficult to ascertain what the original story was without
looking at multiple versions from different sources. The purpose of this paper is to trace the development of a news story across a 24–hour period,...
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The first piece of news is from NPR's Morning Edition. The writer intended it to be a short snippet of the need–to–know points of the bailout. The main
points presented are that the announcement of a bailout had a much greater effect on the Greek economy than the unveiling of a reform package
earlier in the week and that Germany is planning to offer unspecified aid to the country. The reporter also mentions that many oppose the bailout
because they feel it will set a precedent for "eurozone" nations who encounter a similar problem in the future. There are no sources cited for the
information in the piece, but the quotation is from someone who appears to be respectable. This piece makes the problem seem much simpler than
the other articles do. While no citations are present, NPR is such a respected institution on its own that none seem necessary. The reporter's work is
transparent, and all of the key questions are answered, to some degree of clarity. Context is well established, and the report represents both the pros
and cons of the bailout. Overall, this is a reliable piece of news. The second news piece is an article from the Guardian, a Great Britain–based
newspaper. Its main point is that a bailout plan has been reached, and, in contrast to the NPR piece, uses a quote from the EU's president to make that
point. It offers other information as well, most of it quoted from such figures as Germany's chancellor and France's president, including that the

Government Bailouts Are Beneficial To The Economy
In 2008 the U.S government spent 700 billion dollars in order to bail out the banks. This enough money to pay for a person and all of their siblings
to go to any college in the country, and still have money left over for for kids and grandkids. A government bailout is simply when the government
gives financial support to a company that is on the verge of collapse. Currently the U.S government is trillions of dollars in debt. Despite this, they still
spend billions of dollars bailing out failing companies. They are oblivious to their debt and the harm they are doing to the economy. Therefore,
government bailouts are very harmful to the economy. In 2008 the U.S in the midst of economic crisis. Several of the biggest banks were on the verge
... Show more content on Helpwriting.net ...
However, there are several reasons why they are wrong. The first reason is that the big companies stand to lose so much and cause such great harm
only because of the government's policy of bailout. John Tamny asserted, " if the mere notion of "government bailout" were cleansed from
Washington's unfortunate bag of policy tools, no bank would grow large enough such that its implosion would have any major market
impact"(Tamny). Another reason is that when the government gets involved in the banking industry they are just guaranteeing that the banks are
going to eventually fail. Tamny agreed "The banking system struggles, its struggles scare the daylights out of investors, but both wouldn't be factors
if the political class would simply get out of the way"(Tamny). Proponents of government bailouts would also argue that bailouts would help the
economy get back on its feet faster. In rebuttal, there is a great deal of evidence that goes against this claim. The biggest piece of evidence is that by
bailing out the banks they are simply being kept on life support and therefore the economy can not heal at all. Stephen Gandel and Leo Cendrowicz
attested, "All this would seem to justify some economists' fears about "zombie banks": financial firms kept on life support by government guarantees
but forever

The Global Crisis Of 2008 Essay
The Global Crisis of 2008 The 2008 financial crisis leaded the USA to one of the most important recession after the Great Recession of 1980. It
started in 2006 with the subprime crisis, and the proliferation of mortgage backed securities following by the estate crisis. The crisis was global ; it
affected the whole economy; the financial institutions as well as the households and investors, and caused a stock market crash in September 2008.
The government proposed several plans and packages to overcome the situation.
Since the end of 20th, the society has experienced an important increase in consumerism. The consumerism is an economic ideology that encourages
people to acquire and buy goods and services. The US economy is based on the fact that people should consume and possess to be happy. Along the
years, the US lauded materialistic values that led the country inevitably to a financial crisis. The global crisis of 2008 also called В« The Crash of 2008
В», started in reality in 2006. In fact, as suggested Kimberly Amadeo, В« there were warning signals as early as 2006 that the housing market was
starting to falter В» but politics did not react and probably thought this will not affect the economy as a whole. The crisis of 2008 was marked by
the stock market crash of 700 point drop in the Dow Jones on September 29 which was В« the largest point drop in the history В» (Amadeo). The
Crash of 2008 is a complex event with many factors and consequences involved. In the first part of

Case Study : The Auto Bailout
1. The Auto Bailout Daniel Levi, in his book, Group Dynamics for Teams, declares that "a team is a special type of group in which people work
interdependently to accomplish a goal" (1). Near the end of 2008, Chrysler and General Motors were in need of help because they confessed to the
world that they were in danger of financially collapsing, thus the US auto bailout was created. The task force was brought forth by the Obama
administration to help Chrysler and General Motors overcome their financial obstacles, in addition to implementing new ideas that would help them
develop. Although the US auto bailout was a temporary project, the task force was a fine example of the definition of a team. Due to their consensus
decision making and interdependently coordinated tasks, they are presented as a self–managed team. Although the auto bailout's leader, Steven Rattner,
was not selected by the team, he still carried out the characteristics of a team facilitator by overseeing the operations. Overall, the team had high
collective efficacy therefore setting higher performance goals, only leading to excellent performance (Levi 66). 2. Why This Team Was Selected
President Obama's task force is a considerable exemplar team based on their processes that lead to successful outputs. This team was also relatable, as
their processes pertained to group dynamics that were discussed in class. For example, the team had accomplished a SMART goal, a common method
utilized to achieve objectives.

Response Paper to "Betrayal of the American Dream"
I've always been an optimistic person, but while reading The Betrayal of the American Dream, I felt so much of that optimism drain out of me. Prior
to this, I had mistakenly believed there was a difference between the two political parties in that one of them actually had the people's best interests at
heart. I began to question that belief in recent years, and Barlett and Steele killed whatever faith I had remaining in it. The more I read the book, the
more I wanted to find something that wasn't true; something I could disagree with. Yet the authors did a very good job with their fact–checking, and I
found out I must be more of a liberal than I had thought, because they are making complete sense.
I am sad to admit I was surprised to ... Show more content on Helpwriting.net ...
The public outrage was far too short–lived, for we could have invested that money into making new jobs instead of it going into executive bank
accounts where it did no good.
The country recovered from the Great Depression through helping the workers directly. Jobs were created by the government, and people built
infrastructure to help this country grow. Now even those jobs have gone to China, and our politicians are sending them there. Once I read about that, I
was thinking about all the tax revenue the Federal Government was losing – and that is exactly where the authors went with their point. But was the
Federal Government contributing financially to the project? If so they could have required that California use domestic producers. If not, they could
have promised to contribute if California did use domestic producers, part of which would be paid by the tax revenue earned. Even if it cost more
than the tax revenue it would take in, that would be a better use of bailout money, and we have many more bridges that could use some work. One of
them randomly collapsed in Minnesota about ten years ago, making the people aware of how unsafe our infrastructure has gotten.
So after reading this book for nearly 300 pages, I'm left with the burning question of "What can I do to fix this?" The last couple pages mentions
supporting

Government And The Government Of The United States Government
How many people are involved in a government decision to help a large bank? On the surface, it is a simple answer. Some might think just the banks
and the government because that is who made the decision, and the banks are the ones that were helped by that decision. The United States government
is comprised of leaders elected by the citizens. The United States government also relies on the taxes generated by these same citizens which help fund
government programs, the military and many other things. A governmentbailout is "a situation in which the government pays or lends money to save a
company or industry from failing" (Cambridge Business English Dictionary). The governments decisions to bail out banks in 2008 re–energized
corporate ... Show more content on Helpwriting.net ...
Debt this high drove all crediting to collapse because people could not make payments on their loans, due to the fact that they simply did not have the
income to pay. This then created instability within the banks because the revenue necessary to continue was no longer there. All of things added
together equated to the largest market crash since the great depression and governments intervention. Government help was seen as the only way to
avoid a total economic collapse in the United States, although many thought it could result in a worldwide economic recession. On September 18, 2008
the 700 dollar bailout plan was proposed to congress. Fed Chairman Ben Bernake is quoted telling congress, "If we don't do this, we may not have an
economy on Monday" (The Housing Market Crash of 2007, 2011). This is when it became apparent that the government had a stake in this situation.
When people begin questioning whether the United States economy will still exist, the government then has a huge role in the survival of not just the
economy, but the entire country. The government is in a situation where it must decide how to protect the American economy, the citizens, the
businesses, and the future of the United States of America. On October 3, 2008 congress passed "Emergency Economic Stablization Act" (H.R. 1424–
110th Congress, 2008) which led to the lending of 700 billion dollars' to

The Crisis Of The Bailout ( S )
The Greek Bailout(s) submitted on Sunday, 26 June 2016, 10:51 AMmodified on Sunday, 26 June 2016, 3:48 PM
The International Monetary Fund's "main goal is to ensure the stability of the international monetary and financial system. It helps resolve crises, and
works with its member countries to promote growth and alleviate poverty" (Imforg, 2016). My research seems to point to the main failure of the IMF
policies as pointing to the same issues faced by any bank – math vs. people. While its goals may be to help alleviate poverty, those same policies are
what causes the patient to become sicker or possibly die from the cure. Economists attempt to apply the rigidity, demanding constraints, and unforgiving
answers of mathematics to human ... Show more content on Helpwriting.net ...
An example of this is when a country is caught in a death–spiral they are stuck in a taxes–spending–debt cycle. When a country spends more than it
takes in (tax revenue) debt is incurred. Debt can be a healthy sign, like a company that wants to buy another truck to be able to meet its requests for
more services. However, when a country takes on too much debt, investors start to lose trust in that country's ability to pay its debt, so in order to get
more funds, the creditors raise the interest rate, thereby increasing its debt; and higher debt leads to lack of investor trust which leads to higher interest
rates, increasing the debt. (Khanacademyorg, 2012) And the death–spiral begins.
As with an individual, when they get a pay raise, they can afford the new debt. With a country, they must raise the taxes. If the citizens are not growing
financially as a whole (Gross Domestic Product (GDP) – the broadest quantitative measure of a nation 's total economic activity (Investinganswerscom,
2016)), then the ability of the country to raise taxes safely becomes problematic. Thus, the well–being of the individuals of a society help that country
to grow. In other words, in 1776, Adam Smith called this being "led by an invisible hand" (Smith, Cannan, 1904). This invisible hand is the
self–interest of the individuals of society to better their lives through their own hard work which leads to the betterment of the country. However, when a

Disney Paris Bailout
The Disney Paris Bailout
The wonderful world of Disney is alive and well all over the world, in the United States, China, Japan and Paris, bringing in an impressive 2.2 billion
dollars and boasted a record number of nearly 134.4 million visitors worldwide, according to Themed Entertainment Association. (Themed
Entertainment Association, 2014) Disney Paris, unlike other Disney parks, has not seen the same kind of success, due to a variety of issues, including
cultural, financial, and business related decisions they did not factor well into the European market. It was not until Disney (US) bailed Disney Paris
out, not once, but many times, before profit was seen by the popular European attraction.
Euro Disney, opened in 1992, located just outside ... Show more content on Helpwriting.net ...
Unlike Americans who were known grazers, Parisians were less likely to eat in the same fashion, with most places closing down earlier, leaving many
without better food options, and still sans their wine. (Yue, 2009) A good description for Disney Paris was a "cultural Chernobyl" because of its odd
blending of American and French pairing, which did not quite work. It was not just about the marketing and cultural issues, finically they were
struggling from the beginning, after the first financial bailout and restructuring, another would soon follow. (Grant, 2003) Another park,Walt Disney
Studios was opened in hopes of bringing in more guests, however, yet again, failing to utilize any contingency plans or measures in case it was not
very lucrative, it was discovered that the cost of running two different attractions was too expensive. Without the projected attendance and revenue, it
was time for another bailout and restructuring. This time in the amount of 250 million and Prince Alwaleed putting up an additional 25 million of his
own money, which allowed for the park to add some much needed attractions which had been lacking for several years. (Sylt & Reid, 2008) Space
Mountain debuted in 1995 to help bolster sales, and later Ratatouille,

Greece : Greek Financial Crisis
On January 1st 1981 Greece joined the European Communities ushering in a period of sustained growth. The countries widespread investments on
infrastructure coupled with funds from the European Union led to a sharp increase in revenue from tourism and the service sector. This helped the
country reach historical highs in their standard of living. By 2001 Greece had adopted the Euro and in the proceeding 7 years the GDP per capita went
from $12,400 in 2001 to $31,700 in 2008, an increase of 156%. The Greek government was encouraged by the European Central Bank and other private
banking institutions to undertake loans to fund foreign infrastructure projects like those related to the Olympic Games of 2004. When the financial crisis
of ... Show more content on Helpwriting.net ...
(Pavlakis, 2013) With so much to lose we have seen European "bailout" agreements that mostly front the Greek government more money coupled
with crippling austerity in an effort to "rebuild" the economy. Austerity discourages growth as it cuts the spending of the government who is by far
the biggest spender in the economy. (Kentikelenis et al., 2011) The effects of austerity can be devastating, but the true effects are often hidden
beneath the messages we get from mainstream news sources. The stereotype of the Greek people as lazy and tax evading has desensitized the public
and has made austerity seem like more of a sensible option. The media messages have made strict austerity measures seem justified and in effect have
galvanized the Greek people.
Greece is no different than other countries who have been forced to accept IMF loans, the vast majority of these funds end up flowing back into the
multinational banks who made the risky loans. The Troika has made demands of increased privatization of national assets as collateral and the
destruction of labor rights. (Kentikelenis et al., 2011) All these policies are the exact opposite of what the Greek people voted for when electing the
Syriza party. The conditions attached to the bailout loans are the exact opposite views of the traditional leftist political parties like Syriza. Economic

Why Did The Citigroup Bailout
Citigroup had received funds in the past not as a bailout but more like financial assistance to promote a healthy economy but in 2008 after a series of
decline investment opportunities and stock purchases, they were in dire need of financial backing. The government provided $45 billion in loans and
a safety net for future investment of $300 billion dollars from TARP. Eventually, Citigroup will sell their stock to repay the funds received through
bailout The FDIC and Fed provided an limited loss from assets.
Bank of America (2009) has benefitted from the bailout, it received 45 million from TARP in large capital investments after the purchase of Merrill
Lynch, which resulted in a massive loss. The government, the feds and FDIC was willing

The Great Recession Of The United States
In the hyper competitive world of today's mega corporations controlled by the sway of the stock market, giant old industrial era companies rule over
the automobile market in the United States as well as large parts of the global automobile market. Companies such as General Motors, Chrysler, and
Ford were at the center of it until the economic crisis now known as the Great Recession of the late 2000s. The whole market was declining in sales
with General Motors and Chrysler taking the biggest hits while Ford only suffered decline comparable to foreign automakers', Honda and Toyota,
levels due to restructuring in prior years. However, the tipping point was edging closer to bankruptcy with General Motors and Chrysler that ultimately
... Show more content on Helpwriting.net ...
What are these values? They are specifically five principles: human dignity, common good, subsidiarity, solidarity, and universal destination of goods as
well as eight values: love, prayer, stability, conversation, obedience, discipline, humility, stewardship, hospitality, and community. They define the core
of the Christian faith's ethical code. The United States' government was founded on Christian principles that are at the heart of how it operates as an
entity in the world. Therefore, it should hopefully stay within the Christian ethical code. The other major player in this situation, the union, was
founded on similar beliefs as these, so it should also stay within the Christian ethical code. However, in this situation we will learn that the United
States government and the union both break this ethical code. First, the United States walks a line for their position in society. Many people turn to the
government as the place to fix the problem. Unfortunately, the government should not always use its power and ability especially with the power of
money, laws, and control. The government is supposed to look out for the public in ways that support the values of community, stability, and common
good. However, I do not believe that they were acting in the term specifically for the automaker

The Glass-Stiegel Act
As of December 2007, the United States fell into the worst economic recession seen in 60 years. This recession was caused by banks' risky
investments that were then were purchased and sold by investors without the customers knowing. This was a violation of the Glass –Stiegel Act. Even
though so many corporations were practicing these shady deals, none were punished even though laws were being broken. Loans were given to people
whether the bank thought they could pay it back or not. This became a huge problem for the banks because so many people were not able to repay the
money that they borrowed. Banks were losing more money than what was coming in at the time. As less and less money was coming into the banks,
they began struggling to stay ... Show more content on Helpwriting.net ...
That may seem like a big number, but the money has come from shareholders, not individual bankers. (Settlements were levied on corporations, not
specific employees, and paid out as corporate expenses–in some cases, tax–deductible ones) (Cohan 1)." The fines that the banks were forced to pay
did not affect or stop them from doing unsafe banking practices. Out of the many investors and banks that took part in these risky investments only one
was punished and sent to jail as said by Cohan."
The more meaningful number is how many Wall Street executives have gone to jail for playing a part in the crisis.
That number is one. (Kareem Serageldin, a senior trader at Credit Suisse, is serving a 30–month sentence for inflating the value of mortgage bonds in
his trading portfolio, allowing them to appear more valuable than they really were.) By way of contrast, following the savings–and–loan crisis of the
1980s, more than 1,000 bankers of all stripes were jailed for their transgressions.
These bankers and investors knowingly caused one of the worst economic recessions in American history and they were barely punished for

Risky Business : Corporate Governance And Risk Management
Risky business: Corporate governance and risk management in the wake of the global economic crisis.
Word Count: 1500 (+/– 10%) not including references and quotes
Introduction
"A Chicago teenager is looking for fun at home while his parents are away, but the situation quickly gets out of hand" (IMDB, 2014). This is the
logline for the Tom Cruise movie Risky Business. In the wake of the global economic crisis, questions are being asked if company's were just having
too much fun while the parents were away. Effective corporate governance and risk management are two systems that can help a company achieve
greater productivity, profitability and growth. If mismanaged, they can possibly cause said company to collapse or negatively affect all stakeholders.
Across the theoretical literature, there has been a shift in attitudes and now some question whether corporate governance was really at the core of the
fault of the global economic crisis. It is presented that despite these growing literary trends, both corporate governance and risk management are
causally linked and an imperative for the sme, new start up or global corporation. In addressing this issue, Risk management and corporate governance
will be examined in detail with reference to current literature, opinion and supported by a few key case studies.
Case Studies
Case studies are an effective measure in building theory, according to Eisenhardt (1989). It is a research strategy that

Bailouts Effect on Economy
Almost 1.2 trillion dollars were spent on bailing out the various banks in the 2008 financial crisis. First, what bailouts are is explained. Then, the
history of bailouts in the US is told. Finally, the effects of the recent bailouts are analyzed. Because billions of dollars are spent on bailouts, they
need to be understood by the public by knowing their history and their effects on the economy to ensure informed decisions in the future on
whether or not banks should be allowed to fail. A bailout is the process of offering money to a failing business, often in the form of a loan, in order
to prevent the consequences of that business going bankrupt. The most well known type of bailout is when the government bails out a company but
that is not the only kind of bailout. It can be an individual bailing out a company, a company bailing out another company or even a government
bailing out another government as has been happening in Greece for a few years. The reason that a company is bailed out is because of the "Too
big to fail" theory which states that some banks or other companies are so large and interconnected with the rest of the economy that if it failed there
would be disastrous effects in the rest of the economy, enough to cause another recession or even another great depression. For example in 2008, the
global financial services firm Lehman Brothers filed for bankruptcy, which was the largest bankruptcy in U.S history with over six hundred billion
dollars in assets. The

Ethics Paper--Bailout
Bailout Ethics
Americans are outraged. Billions of taxpayer dollars were committed last year to rescuing firms such as Citigroup and the American International
Group (AIG). Earlier this year, several companies who received Troubled Asset Relief Program (TARP) assistance were awarding top executives with
extravagant bonuses. According to the Wall Street Journal, the U.S. government lent $238 billion in TARP taxpayer funds to almost 700 banks; 44 of
these banks have repaid a $71 billion (Johnston, para 6). There remains $167 billion invested in banks. Some critics argue that a "mere" $167 billion is
not significant to warrant public indignation against bonuses. However, the issue is not about specific bonus amounts but the principle of ... Show more
content on Helpwriting.net ...
In another example of applying the Rights Approach to bailout bonuses, AIG tells a different story. In March 2010, AIG is scheduled to distribute yet
another $198 million in bonuses to its financial products employees– largely seen as responsible for the firm's failure (Collins, para 11). This will result
in almost $400 million in bonus payments since receiving government assistance (Collins, para 11). As mentioned previously, AIG does not have a
moral right to these bonuses. It would be similar to someone taking an elaborate vacation just before filing for bankruptcy and expecting the
government to finance his unnecessary expense.
Common Good Approach: Definition and Analysis
In a globalized world, the Common Good Approach has increased in relevance for judging ethical behavior. It presents "a vision of society as a
community whose members are joined in the shared pursuit of values and goals they hold in common" (Markkula, para 12). This Approach calls
attention to the conditions that are important to the common welfare of everyone. The principle states: "What is ethical is what advances the common
good" (Markkula, para 12). The common goal when considering the bailout is a stable economy. What remains unanswered is why some financial
institutions, such as JPMorgan Chase and Goldman Sachs, were helped with TARP funds while other banks, such as Bear Stearns and Lehman Brothers,
were allowed to

Essay on The Senate's Bailout of Automakers
Recently, we have all heard about the financial crisis. Many industries have suffered beginning from the banks, the first and worst hit industry. Since
many were retrenched, the consumer–based industries have suffered. This time, the auto industry was hit. Three big auto companies, General Motors,
Daimler Chrysler LLC and Ford, were in trouble this time. The $14 billion emergency loan for the companies was cancelled as the Senate failed to
approve of it. Why did they do so? What effects will it have?
The reason given by the Senate for their disapproval was that the conditions they gave to the UAW union were not met. Mr. McConnell, a Republican,
thought that the conditions set were not "tough enough". He felt that Republicans ought to ... Show more content on Helpwriting.net ...
It was over this proposal that the talks eventually reached a bottleneck. The Republicans had wanted the automakers to meet that requirement by 2009,
but the Democrats and the union insisted that the deadline should be 2011. When that happened, the Republicans had refused to back the bailout on
the grounds that the automakers can increase their competitiveness and survive the competition if their plan was taken. Therefore, the proposal did not
meet the required amount of votes and was rejected.
The effects were immediate– shares fell sharply around the world after the bailout was rejected. The automakers, naturally, were among the hardest hit.
The refusal of the bailout is sure to end with huge job losses. The automakers are likely to go bankrupt if they do not get the bailout. Millions of
Americans are going to be affected. Not only the auto workers will suffer retrenchment, but people who sell cars and car dealerships are going to feel
the impact. People who work in companies providing automakers with car parts are also going to suffer.
The people who are retrenched will be more cautious while spending their money, causing consumer–based industries to suffer The companies in those
industries will have to fire employees and apply for government help. If this goes on, they will soon close down. As they borrowed money from the
banks, those money becomes a bad loan and the weaker banks will also need to close down, adding to the number of unemployed

A Crisis so Severe, the World Financial System Is Affected
A Crisis So Severe, The World Financial System Is Affected Following a period of economic boom, a financial bubble
–global in scope–has now burst.
A collapse of the US sub–prime mortgage market and the reversal of the housing boom in other industrialized economies have had a ripple effect
around the world. Furthermore, other weaknesses in the global financial system have surfaced. Some financial products and instruments have become
so complex and twisted, that as things start to unravel, trust in the whole system started to fail. John Bird, John Fortune, Subprime Crisis, February 14,
2008 While there are many technical explanations of how the sub–prime mortgage crisis came about, the mainstream British comedians, John Bird and
John... Show more content on Helpwriting.net ...
Many banks were taking on huge risks increasing their exposure to problems. Perhaps it was ironic, as Evan Davies observed, that a financial
instrument to reduce risk and help lend more–securities–would backfire so much. When people did eventually start to see problems, confidence fell
quickly. Lending slowed, in some cases ceased for a while and even now, there is a crisis of confidence. Some investment banks were sitting on the
riskiest loans that other investors did not want. Assets were plummeting in value so lenders wanted to take their money back. But some investment
banks had little in deposits; no secure retail funding, so some collapsed quickly and dramatically. The problem was so large, banks even with large
capital reserves ran out, so they had to turn to governments for bail out. New capital was injected into banks to, in effect, allow them to lose more
money without going bust. That still wasn't enough and confidence was not restored. (Some think it may take years for confidence to return.)
Shrinking banks suck money out of the economy as they try to build their capital and are nervous about loaning. Meanwhile businesses and
individuals that rely on credit find it harder to get. A spiral of problems result. As Evan Davies described it, banks had somehow taken what seemed
to be a magic bullet of securitization and fired it on themselves. Creating More Risk By Trying To Manage Risk Securitization was

The Financial Crisis of 2007-2009
In the 1930s the United States was hit by far the worst financial crisis that it has ever encountered, which was called The Great Depression, but the
second worst was not that long ago. During the Financial Crisis of 2007–2009 the United States had a chain of banking failures and a tremendous
growth of liability in the federal budget. However, the government had stepped in to prevent some of these failures and through this the concept of
"Too Big To Fail" was created.
"Too Big To Fail" is a concept where a business or financial institution has become so large and embedded in the nations economy that it would cause
a tragic effect if it were to fail. However, a government will deliver support and guidance to prevent theses fine businesses and financial institutions
from failure. If one of these businesses or financial institutions were to fail it would cause a catastrophic ripple effect throughout the economy. If
company that is considered a "too big to fail" company has problems within the company or from outside the company the government will be lured
into saving it through a bailout or by a guarantee of specific loans or if a private company will arise and take over the company. Government bailouts
might help the company continue their services; however, various counterparties think that government bailouts or intervention with the failing
company is counterproductive and should simply be allowed to fail.
Along with the concept of "too big to fail" there are risks they

The Financial Crisis Of 2008 Essay
The 2008 financial meltdown resulted in the most treacherous investment landscape observed since the great depression. The most notorious issue was
the subprime mortgage crisis, which had a ripple effect felt through every market in the world. The banks, whose leverage rate should never have been
higher than two times capitalization, surged as high as thirty to forty times market cap. With this level of exposure, any unforeseen market fluctuations
could mean disaster. Lehman Brothers, the oldest investment bank on Wall Street, went bankrupt and thousands lost their jobs. Outside of finance,
thousands of companies in the United States and abroad had to fire significant portions of their workforce, thus furthering the economic decline and
plunging the US into an economic recession. In the late 1990s, Congress repealed the legislation separating commercial and investment banks, which
resulted in investment banks overreaching their bounds. The Emergency Economic Stabilization Act of 2008 was enacted due to the effects of the
subprime mortgage crisis, which allowed the US Treasury to spend billions of dollars to bail out the investment banks by purchasing distressed assets.
However, the bailout plan has created a debate over whether it was a good idea for the government to bailout the investment banks. Also, if the
government fared better or worse in the years following the bailout.
The financial crash of 2008 created two paradigms, bailout and bankruptcy and to this day it is

Essay on Corporate Bailout and the Law
The climax of the 2008–2009 financial crises, the largest ever since the Great Depression of the 1930s, witnessed the near collapse of
multibillion–dollar industries in the United States. Concerns over the economic impact of the possible collapse of these industries compelled the then
administration and Members of Congress to seek legislative options to salvage them. Consequently, two of the industry biggest players in the auto
industries, General Motors and Chrysler, were offered financial support by the government and in return, shareholders and other stakeholders had to
make necessary sacrifices in order to fundamentally restructure their businesses and commit to the tough decision of returning the companies to
financial viability. In... Show more content on Helpwriting.net ...
According to an analysis released by the Centre for Automotive Research (CAR) on December 9, 2013, the auto industry bailout generated an 8 to 1
savings. This means that for every dollar spent by the taxpayers, there was a return of close to eight dollars in savings. The reason for terming the
bailout as a success is that it was successful in averting a wave of massive Chapter 11 filings that could have led to the wipe out of at least $280
billion in household income and a further $105 billion drained from the federal coffers as a result of a hike in demand for services like unemployment
insurance (McAlinden and Menk, p.13). According to McAlinden and Menk, the authors of the research memo, the intervention of the government
should be viewed as one of the most successful ones in the economic history of the United States (McAlinden and Menk, p.12). Basing on the economic
modelling presented in the research memo, minus the bailout, it is clear that GM and Chrysler would have closed their operations permanently come
January 2009. The consequences would have been catastrophic, as it would have meant that almost 600,000 retirees from the two companies would
have seen a delay, a reduction in their pensions, and or a cancellation of their health benefits. Furthermore, many supporters of

Gm Bailout
GENERAL MOTORS BAILOUT PROBLEM
Introduction
Founded in 1908, General Motors has been one of the largest corporation and the second largest automaker in the world coming after Toyota. For
77 consecutive years from 1931 to 1908, GM has been a leading automaker and marketer as ranked by the total number of units sold yearly. General
motors have also been a leading employer not only in the United States but also in other parts of the world where it operates. However, the company
has been seriously affected by the current economic crisis. The Detroit Three, led by General Motors have been a backbone of the United States
economy and there eminent collapse in the current economy crisis is likely to have negative impacts on the United State's ... Show more content on
Helpwriting.net ...
Although it has reduced the number of acquisitions, GM has collaborated with other automakers in the world. It is a major shareholder in GM
Daewoo Auto company operation in South Korea. It has collaborated with Suzuki Motor Corp and Isuzu Motors Limited of Japan in production of
vehicle parts, power train and others. The company also collaborates with Toyota Corporation and BMW of Germany in areas of advanced auto
technology. GM collaborations also include other leading automakers like Shanghai Automotive Industry Corporation, Renault of France, Fiat S. p. A.,
Ford Motor Company, and others. It has various stakes in different companies in the world which reassert its global influence in the automotive industry.
Apart from directly employment, the company has created a global empire of the supply chain selling its vehicles or its spare pars. The company
accessories are sold branded GM Goodwranth and ACDelco which are retailed thorough GM Services which distributes the spare parts to various
distributors around the world.
In terms of market size, the largest market is in the United States which has remained one of the leading automotive markets in the world. However,
GM also sells a good number of its vehicles in China, Canada, United Kingdom, and Germany. In the early years of development of the automotive
industry, most auto manufacturers came up with Financial Services which

The Great Bailout
The Great Bailout of 2008 The Great Bailout of 2008 was also called The Wall Street Bailout of 2008 or global financial meltdown of 2008 and it
was ranked as the worst and most dangerous financial crisis after the great depression of the 1930s. It also reshaped the world of finance and
investment banking. Also according to researcher the 2008 financial crisis was the most disruptive political event yet experienced in the 21st Century,
and the effects are still being felt today.
It all started in 2007 when sky high home prices in the United States finally turned decisively downward, spread quickly, first to the entire U. S.
financial sector and then to financial markets overseas. There were also signs of the crisis in June of 2007 when the 5th largest investment bank in
the US, Bear Stearns, announced large losses in 2 of its hedge funds with exposure to subprime assets. Clients were prevented from withdrawing
money and the funds were eventually shut down at a $3 billion dollar loss. In October 2007 two of the largest banks in the world both lost their
CEOs. Stan O'Neal of Merrill Lynch and Charles Prince of Citigroup both resigned due to losses on their exposure to subprime debt. They were
replaced by John Thain and Vikram Pandit respectively.... Show more content on Helpwriting.net ...
It was in March 2008 however that things really started to get bad. At that point all banks were suffering but the worst banks hit were Lehman 5th
largest investment bank and Merrill Lynch was the 3rd biggest bank. According to research banks engage in risky behaviors because Wall Street
fosters a culture of profit ability over principles. Public companies on Wall Street were always under intense pressure from investors and analysts to
produce growth year over year and higher shareholder

Bank Bailout 2008
Bank Bailout Outline
I. Introduction
II. Background
III. Opposition's point 1, refute, 1st support for thesis.
a. Credit Card Act of 2009
b. No Change at all, Banks still operating the same way
IV. Opposition's point 2, refute, 2nd support for thesis.
a. Creation of TARP
b. $12.2 trillion dollars of tax dollars were spent wrong
c. TARP allowed many banks to allow credit again
d. A majority of banks have paid back TARPmoney
e. After TARP, Economy boosted
V. Opposition's point 3, refute, 3rd support for thesis
a. Toxic assets cannot be removed easily

b. Government takes more cost, then expects
c. Economy will decline with removal of assets
VI. 4th ... Show more content on Helpwriting.net ...
"In the United States, foreclosures were up 81% in 2008 and up 225% from 206", which equals out to 19 per 1,000 households (CBS News, 2008).
Due to there was a huge increase in foreclosures, instead of housing prices increasing; the houses values decreased in value very quickly and
resulted in more foreclosures. A $300 thousand dollar mortgages was now only worth $75 thousand dollars. So all the mortgages that was in the
investment banker CDO, now are worthless, and no one wants' to take the CDO, and now the CDO is acting like a bomb (Roney, 2007). The
investment banker is now panicking because he borrowed millions of dollars to buy the mortgage, and now he cannot get rid of it; however he is not
the only one. Thousands of investment bankers throughout the world have CDO's on their hand (Bailed out banks, 2010). In result the world's
financial system has become frozen, and everyone starts going bankrupt. As a result of the failure, the United States government rolls out a new
program called Troubled Asset Relief Program (TARP) to prevent another bank failure.
Under the bank bailout, creation of new legislation to protect the consumer has rapidly increased, and supporters of the bank bailout point to the Credit
Card Act of 209. Not only were subprime mortgages affected, but due to the freeze in the credit market in the United States government needed a way
to regulate the credit card industry, but also to stimulate

Taking a Look at the Turitea Aviation Company
SWOT analysis of Turitea Aviation
Strengths
Johnny Johnson
–From the beginning, the company has had a strong reputation for being an excellent Maintenance, Repair and Overhaul organisation. Johnny Johnson
who is credited to being an extremely efficient worker, and has the ability to thoroughly plan his next move is still an employee at Turitea Aviation.
He has twice served on the board and is a valuable employee to the company. Johnson can be considered a strength to the company for the following
reasons;
–He can be directly linked to the early success of the company. This indicates that he is a competent employee who may have the ability in aiding the
new CEO to bringing Turitea Aviation back to its former glory.
–He has been noted to have a 'consultative management style'. In a company that has just been through the stress associated with a resignation of an
undesirable leader, Johnsons' management will be extremely beneficial for repairing and adopting a new company culture. Employees will be
looking for someone to lead/someone to follow. Johnson, a senior employee, encourages staff to approach him for information and advice. This will
make staff fell as though he is one of the team not an individual that is above everyone else as Edgar may have been perceived.
Multiple maintenance bases
–Under the control of Edgar Kain, many maintenance bases where created in both New Zealand and Australian cities. Aircraft are always going to need
servicing and with bases

Auto Industry Bailout Essay
The Macroeconomics of the Auto Industry Bailout
[Type the author name]
[Pick the date]
The Auto Industry Bailout
Detroit, Michigan grew up around the automobile industry. At its peak, Detroit was the fifth–largest city in the United States, becoming the home to
over 1.8 million people by 1950 (Davey, Monica 2013). The prolific population was due greatly to the success of the auto industry in the city. At that
time, Detroit was flying high, its name coined "The Motor City" (americaslibrary.gov), and automobiles greatly impacted commercialization. From
transporting goods to hastening production, to selling parts, to manufacturing and selling new automobiles, the auto industry completely transformed
Detroit. Things seemed ... Show more content on Helpwriting.net ...
Bankruptcy discussions started immediately and centered on the prospect of Chapter 11 bankruptcy (Start Fresh Today 2012), commonly called
restructuring. It was generally used to provide a window of opportunity for a corporation to renegotiate contracts, sell assets or component businesses
for cash, obtain debt forgiveness, or otherwise reform itself as a viable business enterprise. On April 30, 2009, Chrysler filed for Chapter 11 bankruptcy
after talks with lenders broke down (Start Fresh Today 2012). On the May 14, 2009 Chrysler announced it was to close 25% of its US dealerships as
part of its restructuring process.
Then, on June 1, 2009, General Motors filed for Chapter 11 bankruptcy after failing to successfully negotiate deals with bond holders (Start Fresh
Today 2012).
The purposes of the loans were to provide operating cash for G.M. and Chrysler, and keep car loans available to buyers. GM earned $23 billion in
2010 and has invested $8.1 billion in thirty four U.S. plants and created or retained more than 23,000 jobs since 2009 (Shepardson, David 2013). GM
agreed to give the government warrants for common stock, preferred stock, and a promise to repay the loan in 2012. GM granted that union
health–care benefits would be paid to retirees in 2010; they would sell the Saab, Saturn, and Hummer divisions of their company, and reduce
employment from 96,000 to 45,000 in 2012 (Arnadeo 2013). Chrysler

Essay about The Current Economy is Based on Greed
The main reason that large corporations are in dire need of money is simple, greed. Financial institutions went out and found people who wanted to
purchase a house, but couldn't afford it, because of bad credit reports, debt, income, etc. So the banks went out on a limb with these risky people,
and loaned them "x" amount for the house. Banks were only trying to make some money off of the outrageous interest rates of the mortgages,
because that's what banks do, they make money. Now banks and other lenders did this type of business on a large scale. People loved the idea that
they could go out and get a mortgage on let's say a four hundred thousand dollar house, with a bad credit score and slightly above minimum wage
salary. Can you see... Show more content on Helpwriting.net ...
It is really sad that some people would rather be fashionable and in debt, than be unfashionable and without debt, just because of what society looks
like. People have to realize that somewhere along the lines one has to draw the line and decide whether or not this month they would rather eat have a
shelter or whether or not they would rather go out and buy that new pocketbook that is in style.
Patrick wrote an article "The 2008 Financial Crisis–Causes and Effects" that explains a little about how the economy works and why the economy is
where it is currently. "The American economy is built on credit" (Patrick). Now credit can be a good thing when it is used wisely, because that is
how people start a business or buy a vehicle. Its sort of like trust, I guess is how I would put it. Meaning that when you go purchase something on a
credit card or write a check, money is withdrawn from your account and now you have a deficit of sorts. So when you make your monthly payment
on the item that you bought, you get 'recognized' in the banking world as being a responsible person for paying your debt. "Recent Market instability
was caused by many factors, chief among them a dramatic change in the ability to create new lines of credit" (Patrick). New lines of credit include
remortgaging your house and refinancing your

GM Bailout Essay
Case Study: The GM Bailout Kimberly Covey September 1, 2016 Northeastern State University Introduction The case study details the financial crisis
that befell General Motors. The company had suffered a loss of $81 billion over the last four years. The C.E.O approached the U.S government for a
bailout using a fund enacted by the Senate dubbed TARP meant to bail out financial institutions that were on the verge of bankruptcy due to the
looming financial crisis. Many automakers were facing a financial crunch and kept having losses. The C.E.O, Wagner, managed to convince the
government to bail them out using funds from TARP fund. After a detailed plan from General Motors, the bailout was approved. The bailout stirred a
lot controversy... Show more content on Helpwriting.net ...
One is the fact that the bailout was saving many Americans their jobs by ensuring these companies stay afloat. GM had many employees and many
retirees that depended on the company, and if the company closed down, it would render so many people jobless and without a source of income. On
the other hand, according to the law of utilitarianism, it was ethical for the government to lend a helping hand to GM to keep the company afloat. The
initial agreement between GM and the government provided the option of the company redeeming its stake back from the government once they
achieved financial stability. Unfortunately, this never came to be. The government invested taxpayers' money in a collapsing company that was
experiencing losses year in year out. This was unethical; the company should have bailed itself out from this crisis since there were other automotive
companies still afloat. Justice dictates that since it is GM that got themselves into this mess, then the same company should figure out a way out of the
same mess. This is true since even when the government opted to bail out GM, it was the company that drew up a plan that would give them financial
stability. Therefore, one would argue that GM should have figured out a way to solve their financial crisis by selling out the non–profitable plants and
sections of the company and cutting costs to become profitable once more. They should also have invested in

A Note On The Bailout Crisis
The concept of a bailout is a loaded topic by itself, and its definition certainly does not give it any help. The words "failing," "save," and "collapse" are
usually not associated with a light–hearted idea. When a company or a country's economy is on the verge of collapse, chaos is not far behind. Job
loss, bank's individual trust, the stock market, and even each household's net. worth is at stake, all of which leads to economic decline. During this
time of panic, banks (commercial or central depending on the scale) must make a decision on whether or not they should save/bailout the company or
economy. In many instances, especially when a country's economy is about to collapse, other central banks are usually not seen to shy away... Show
more content on Helpwriting.net ...
Later that month, the U. S. House of Representatives passed legislation establishing the Troubled Asset Relief Program, or TARP. Congress then
passed, and President Bush signed, the Emergency Economic Stabilization Act of 2008, which established the $700 billion Troubled Asset Relief
Program (Investopedia). In November 2008, the Federal Reserve instituted quantitative easing programs following the 2007–2008 financial crisis; or
QE as it has become known. Quantitative easing is the act in which central banks buy government bonds in order to promote economic growth. In
November 2010, the Federal Reserve announced a second round of quantitative easing, referring to it as "QE2." A third round again was later
announced on September 13, 2013; which is now being referred to not as QE3; but "QE–Infinity." Quantitative easing can only be carried out if the
central bank controls the currency used in the country. Japan, the United Kingdom, Scandinavia and the Eurozone quickly followed, since enacting
quantitative easing programs of their own (Randow). A central bank, reserve bank or monetary authority are all institutions that manages a state's
currency, money supply and interest rates. A central bank also has the authority to print the national currency. Central banks within countries in the
Eurozone cannot unilaterally expand their money supply and therefore cannot directly employ quantitative easing. These countries must instead, rely

What Happened During The Financial Crisis Of 2007-09
Examination Number: B068878
Title of Course: Introduction to Business
The name of your teaching assistant: Yida Zhiu
The date of submission: 09/03/2016
Word count: 2477
Title of Essay: Briefly explain what happened during the financial crisis of 2007–09. Choose any one aspect or question about the crisis which has
attracted attention, and explain the findings of research on this question. Financial Crisis 2007–2009.
When analyzing causes of the global financial crisis and its specific symptoms, it is clear that the deepening of globalization processes and high level
of internationalization of the world economy determined the significant losses of national financial systems and slowed down their development.
The global financial crisis of 2007 – 2009 was a destructive phenomenon, which adversely affected development of the international financial system in
during globalization. This crisis has acquired a global status, as it started in one country (USA), gradually spreading to other countries, regions,
continents and eventually all the world space. According to Bloomberg, the financial crisis in 2007 – 2009 caused damage to banks shareholders worth
more than 690 billion US dollars. In contrast, the total losses in the banking sector worldwide during the crisis in the early 1990s amounted to 200
billion US dollars. The 2007–09 crisis is characterized by a decline in total value of national wealth of the world: from 107 trillion to 50 trillion US
dollars.
Since mid–2007, the

Essay On Government Bailout
A government bailout is a situation in which the government offers and gives money to a business that is failing so it can prevent the
consequences that can come from a business's downfall. Businesses that hire thousands of people tend to ask for these bailouts so there are not
massive layoffs of their workers. This way they can continue to operate their business until their profits go back up and they are able to pay the
entire bailout back. As a part of a case study I had to play the scenarios of a three different people with various backgrounds. The people had a different
Ideologies regarding their views on the use of government layoffs. The first scenario included a a self–made millionaire named Randall Hanson.
Randall started from the ... Show more content on Helpwriting.net ...
His whole family has worked in the hometown of ACME. He is active within his community and wouldn't do anything that will hurt it. James does
not support big government and believes that too much regulation and high taxes will be stop job creation. He recognizes that his hometown is
dependent on ACME. The priorities to James in the scenario is: 1 Protecting ACME and the jobs it provides, 2. Protecting ACME's hometown, 3.
Keeping the size of government in check and reducing the federal deficit, 4. Keeping the US from slipping into another Great Depression, 5.
Protecting capitalism and free enterprise. ACME needs a bailout or face closure. This would affect James hometown and will cause the residents to
be unemployed. James has the option to support the bailout, support it with compromise, or oppose the bailout. In this situation he wants a small
government, but to many people depend on ACME for jobs. The bailout for the good for his community and that is a big factor is his decision. This
goes against his ideology of small government because he supports the bailout of ACME. The only thing that is consistent on is his the support for his
hometown. Even though the company may go against his social and political believes, he is willing to compromise so he can save jobs in his

Troubled Asset Relief Program: A Case Study
Is it possible that two government bailouts paid less than a year apart could result in two drastically different results? As economics writer for the
Washington Post, Robert J. Samuelson, says, "Six years ago, it (the auto bailout) was wildly controversial, with the fate of General Motors and
Chrysler hanging in the balance. Now, it's clear that the bailout was a solid success.". The financial bailout, known as the Troubled Asset Relief
Program, has left the banks still reliant on the government in the event of a future crisis (Leonhardt). In 2008, two large industries were on the brink
of collapse. George W. Bush signed a bill to put money into the failing auto industry. Barack Obama signed the bill known as the Troubled Asset
Relief Program to save major U.S. banks from a financial meltdown (Barofsky). The lessons that we can learn from what went right and what went
wrong could ensure greater success of future bailouts. The two bills had different outcomes because of the differences in the oversight of each industry,
who the bailouts were supposed to protect, and if the fear of bankruptcy was present.
The main difference between the auto and finicial ... Show more content on Helpwriting.net ...
Banks continue to believe that if they fail again, they will get another batch of free government money to help them out. Credit agencies freely
admit this in their reports about major banks (Barofsky). As Samuelson simply states, "Fear is a great motivator". The fear of no longer having a job
or a company motivated the auto industry to change to be competitive. Wall Street faces no such fear. Decades and decades of bailouts have proven
that they can do what they want without the fear of losing their jobs (Barofsky). Fear is the great motivator of capitalism, and the lack of fear on Wall
Street has resulted in banks abusing their size to pressure the federal government into even more

Government Bailout for Corporate Failures Essay
Gup (2003) brings out that financial trouble is a periodical concern that occurs to banks, industrial companies and other organizations. Gup begins his
article by reviewing the history and importance of government bailouts for corporate failures. In his article on "What Does Too Big to Fail Mean?" he
uses rhetoric questions in order to engage the readers in his analysis of government bailouts. For instance, he poses the question, "what should
governments and government regulators do about it?" (Gup, 2003, p. 29). 'It' in this case referred to the periodical financial troubles of the above
mentioned institutions. By using the question, Gup engages the reader in trying to think about what the government can do in cases where businesses
face ... Show more content on Helpwriting.net ...
This organization was meant to deal with the widespread business failures, unemployment and municipalities in financial distress. The RFC was
however terminated in 1957 (Gup, 2003).
Gup presents a second option which governments can adopt in response to business failures by exploring extents to whicht governments can move to
protect companies from their competitors. He gives the example of how in 2002 George W. Bush imposed tariffs on imported steel so as to protect
selected ailing steel companies from foreign competition. Gup highlights the opinions of others who claimed that the move by the former US President
was not an action taken in national interest but was aimed at gaining West Virginia and Pennsylvania votes (Gup, 2003). Here Gup uses a skeptical
statement and attempts to make the reader aware that government action can be intended for political gain instead of the goodwill of the nation.
Gup also uses approaches aimed at narrowing down the scope of his article. He presents aspects of the wider topic about government bailouts and
states that his article would not be reviewing those aspects. Gup in his beginning chapters warns the reader that there are also cases where there is the
intervention of international bodies such as the International Monetary Fund, such as when the US Treasury and IMF aided Brazil, Mexico, Korea,
Brazil, Argentina and other

The Global Financial Crisis Of Broward College
Research Paper: The Global Financial Crisis
Michelle Beira
Broward College
There have been few financial crises in the United States. The Global Financial Crisis of 2008 to 2009 was the most recent and before that was The
Great Depression of the 1930s. The Global Financial Crisis actually began in 2007 when prices of homes tanked. It not only affected the U.S. but it
also affected economies overseas. The entire investment banking industry, some of the biggest insurance companies, enterprises government used for
mortgage lending, top mortgage lenders, the largest savings and loan companies, and two of the largest commercial banks were many of the financial
sectors affected by the crisis. "Banks stopped making loans, share prices plunged throughout the world and most of the world plummeted into a
recession" (The Financial Crisis of 2008: Year In Review 2008," 2009, para. 1). Globalization of financial markets began after the Depression and World
War II. After theGreat Depression and World War II there was much physical and economic ruin in Europe, Asia and parts of Africa which allowed
the U.S. to become a leader in the world financial system. Top world leaders like France, Germany, Britain and Japan were economically and
financially unstable. The U.S. was the only stable capitalist country which means it was capable of determining the terms of a new world economic
order ("The 2008 World Economic Crisis: Global Shifts and Faultlines," 2009, para. 34). The first task in

Bear Stearns Bailout
Bear Stearns Bailout "The Fed did not bailout Bear at taxpayer expense, but enabled – as it is mandated – the financial markets to continue to function.
History will call the Fed's action the right move at the right time", says Jeremy Siegel, Ph.D. The Bear Stearns Company began a financial meltdown
in July 2007. By March 2008, it was ready to file Chapter 11 bankruptcy. Some people believe that the Federal Reserve should not have stepped in to
bailout Bear Stearns because it was rewarding reckless business behavior and Bear should have been left to file bankruptcy. The deal of Bear Stearns
was not a government bailout; it was rather a loan to preserve jobs, homes, savings, the economy, the shareholders of Bear, and the financial... Show
more content on Helpwriting.net ...
In November 2007, Bear reported $288.5 billion in client accounts, and was selling the company for $30 billion to JPMorgan. The value of Bear
Stearns has yet to be determined. There is no real vauation of their assets; therefore, there are no buyers who are willing to purchase Bear for cash. As
of November 30, 2007, according to the New York Times, Stearns had $46 billion on its books that included mortgages, mortgage
–backed securities,
and asset backed securities. They announced that the annual report showed $29 billion of these assets were generated by a computer model. The other
$17 billion were determined by estimates from internal company developed models. The means by which Bear Stearns estimated their total assests
were calculated gobally, this means that their estimates may not be accurated due to the different financial and banking standards around the world .
This implies that hundreds of billions of dollars in asset–backed securities may be fabricated capital (The Ediorial Board 3).
Several factors could have affected our nation if the Federal Reserve did not step in and bail out Bear Stearns. One factor is our economy. If half of
the Bear Stearns' employees were laid off, the unemployment rate would increase and would affect the working class throughout the nation, and jobs
would become harder to

Global Effects Of Global Effects On The World Economy
Global Effects
The 2008 financial crisis consequences strongly affected the world, from strong economies in Europe to slow growth developing countries. The
world's economy suffered a downfall that took around 2 years to recover.
Europe was one of the most affected regions in the world. Government interventions, capital injections and bailouts surged in the region after the US
financial market crash. The European market has affected so hard that the impact of the US financial crisis developed into a Eurozone crisis.
One of the reasons the Eurozone was crushed is that the European banking system failed. Mainly because the European banks recklessly borrowed
money in American markets to buy risky securities, those risky securities defaulted ... Show more content on Helpwriting.net ...
Being oil producing countries, the Middle East region had a strong currency and a stable economy due to strong oil prices. Also, helped by direct
foreign investment and aid from other Arab countries, the Arab region was able to maintain strong during the crisis.
Asian countries economies suffered a slow economic growth during 2008 and 2009 mainly because being export economies, and the United States
netting almost 1/3 of world's consumption. East Asia was the most affected part of Asia, specifically Singapore and Japan. Singapore GDP's
dropped from a 14% annual growth rate in 2008 to a 1.1% in 2009 and Japan annual growth rate declined an astonishing 15.2% during the first quarter
of 2009. As in the USA, Asia economy have had a strong recovering road but has been positively affected by the USA uprising economy. (Adbi.org)
United States
The USA financial system suffered one if it's hardest crisis in 2008. According to specialists the average house hold in USA lost an average of
5,800$ in income during the recession peak. The cost to the Federal government to stop the crisis was around 2,000$ on average for every household
in America, and the combined of the decreasing costs of stock values and housing values was around 100,000$ average for every household in America.
(pewtrusts.org)
Gross Domestic Product: The USA gross domestic product suffered it highest decrease during the recession in the 4 quarter of

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