Topic > Corporate Rescue and the Law - 1277

The height of the 2008-2009 financial crisis, the largest since the Great Depression of the 1930s, saw the near collapse of multibillion-dollar industries in the United States. Concerns about the economic impact of the possible collapse of these industries forced the then-administration and members of Congress to seek legislative options to save them. As a result, two of the largest players in the automotive industry, General Motors and Chrysler, were offered financial support by the government and in exchange shareholders and other stakeholders had to make the necessary sacrifices to radically restructure their businesses and engage in the difficult decision of returning businesses to financial sustainability. In fact, nearly 700 companies, including banking firms, have been bailed out by the government, and the total amount of taxpayer money expected to be spent on bailouts is approximately $12.5 trillion (New York Times, 2011 ). ). So far, the US Treasury has spent at least $2.5 trillion (2011). In exchange, the government became the owner of significant shares of these companies. However, this move by the American government has sparked heated debates among ordinary citizens and politicians in the past. This is an issue that has so far led many to wonder whether, in doing so, the Bush government and the subsequent Obama administration have opened Pandora's box. Supporters argue that the government's decision to bail out the auto and financial sectors was more than just handing out taxpayers' hard-earned billions to these companies, but a better way to support millions of workers, businesses and communities. Furthermore, they don't seem to understand the real...half of the paper...of a struggling industry. Furthermore, from the numerous research documents and opinions generated by the 2008 bailout, one objection is that the diversion of TARP funds to help the auto industry clearly stands out, especially considering that these funds were specifically approved by Congress in 2008 to stabilize the ailing financial sector in a successful attempt to avoid an economic meltdown. Notably, legislators intentionally excluded the inclusion of the automotive industry from the program. So, did the Obama administration ignore the law by committing at least $50 billion to bail out GM and Chrysler? For some, such a move was costly to taxpayers, bearing in mind that there was a loss of at least $10 billion. But once again, the lessons learned from this dark chapter in American economic history highlight the real economic costs of government interventions..