Government Bailouts Are Beneficial To The Economy

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
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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

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 TARP money
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

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

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, ... Show more content on
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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

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 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

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

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

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

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 government bailout 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
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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

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.

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

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,

The Aig Bailout
The AIG Bailout William K. Sjostrom, Jr.∗ 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
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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

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

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

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

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

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
Helpwriting.net ...
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

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

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

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

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

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
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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

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

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 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

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 « The Crash of 2008 », started in reality in 2006. In fact,
as suggested Kimberly Amadeo, « there were warning signals as early as 2006 that the housing
market was starting to falter » 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 « the largest point drop in the history » (Amadeo). The
Crash of 2008 is a complex event with many factors and consequences involved. In the first part of

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

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 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

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

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 the Great 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

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

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

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

Government Bailouts Are Beneficial To The Economy

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