Originally Posted by Adjuster
I think it has much less to do with greed, and more to do with companies trying to just survive global competition.
The reality is, 150 years ago, Red Wing could make boots here, and sell them here. Global markets were limited by the ability to ship products, and still compete.
But today, you can ship a container from China to a Pacific port in North America for less tahn 1000.00 per container.
If that container has 500k in products, shipping becomes a very small amount of the "cost" that is reality in all companies.
Say it's full of Flat Screen TV's.
Could we build those some TV's in SanJose, CA?
Sure, but the taxes, regulations and labor rates are all higher than in Singapore, where they are made by a Japanese company that located the factory there, because Japan's own taxes and labor rates had risen to where they had to move out of the country.
The USA has the worlds highest corportate taxes folks, and we wonder why our jobs continue to evaporate, only to be filled by lower paying, service industry jobs?
IT IS NO MYSTERY.
And it's not greed, it's economics.
Want more USA jobs?
Lower the corporate tax rate to 10 or 15% and watch the USA grown at 5 to 10% per year again. (Or more.)
Think about it, would you rather live and workin the USA or China? No brainer folks, the USA wins out. Companies need employees, and happy, content employees work better, make better stuff, and that's profitable for the companies.
Why does KIA/Hyundai, BMW, Mercedes Benz and others build vehicles in the USA? (And why did they locate those factories in the "south" right to work states?)
Obama has done EVERYTHING he can to attack companies, and it's shown in our labor costs, and number of companies that have moved from the USA to greener pastures elsewhere.
Let's stop pointing fingers, and while I agree the banks should have been left TO FAIL, as that would have cleaned out the over-expensive leadership at the top, and resulted in many options for home owners to resolve their individual situations with what's left over.
Your house example would have been a good one. Had TARP not been done, and your big bank failed, those who bought up the "toxic" assets would have wanted to work with you to make payments, ones that were based on the new reality of the value of the house.
And since the banks would no longer be around, the new buyers of those assets would have the ability to re-draw up contracts/lending agreements to solve much of the problems.
THe flip side is letting everyone default and nobody wins that way.
I'm over 54k upside down on my house, and the bank is not willing to work with me on this reality.
Why should I pay my payments, even if I could? That would be bad business practices, and any investors would be right to fire me as CEO if I made choices that lost money like that.
Yet, Americans all over this nation make the choice to throw their good hard earned money at bad investments every month as they pay their mortage.
Sit down, write it out, and if you are losing money on your house, stop paying your mortage folks.
Banks will take them back, but YOU earn the difference in a very real way. Business does this all the time. They re-organize, and start over again, and become more profitable as a result.
When that bank employee says you failed to plan? Point out with a smile on your face that no, YOU failed to plan buddy, and you just forclosed on a house worth xx,xxx.xx less than I owed you. Pretty dumb choice there "smart guy."
Meanwhile, in short order, yet another "smart guy" bank will want to lend me money again, since it's what they do, and I can buy a cheap, forclosed on house in a few years, as the market corrects, and get in at the bottem, while all those fools who pay their mortages on upside down homes now, get hosed each and every month.
Guess what folks?
TARP only works if those "fools" keep paying on their upside down loans.
Want to get your bank's attention? It would only take say 50% of those upside down in their loans, who can still make the payments, to say "NOPE, I'm not going to throw my good money after bad, and you can have my house at the price you want me to pay you."
Bye bye big banks.