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View Diary: David Brooks on GM Bailout (60 comments)

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  •  Someone riddle me this: (0+ / 0-)

    Why can't we spend the money we'd spend on a bailout in buying GM stock?  

    Then the public has some ownership, and we can influence the company's direction.   Not forever, hopefully, but enough to make things right and get a good return on it for the American public.

    •  Well, you can't just buy stock: (3+ / 0-)
      Recommended by:
      chumley, arodb, Justanothernyer

      You'd buy preferred shares or warrants.  Buying shares already outstanding doesn't help the corporation with its outstanding debt (unless they issue new shares, which would be highly dilutive and is unlikely.)

      And the tendency in this country is to give the federal government no voting rights if they buy equity in a flagging corporation.

      It all depends on the structure of the deal -- the federal government may well be able to make MORE demands on the automakers in terms of product lines, fuel efficiency, executive pay, etc if it issues a large, below market rate loan than if it simply buys equity.

      Yes, Santa Claus, there is a Virginia. And it went Democratic.

      by Anarchofascist on Fri Nov 14, 2008 at 03:29:42 PM PST

      [ Parent ]

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