The Instigator
crackofdawn
Pro (for)
Losing
21 Points
The Contender
askbob
Con (against)
Winning
57 Points

The Bailout of Car Companies

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Voting Style: Open Point System: 7 Point
Started: 11/24/2008 Category: Politics
Updated: 8 years ago Status: Voting Period
Viewed: 2,048 times Debate No: 6037
Debate Rounds (3)
Comments (10)
Votes (13)

 

crackofdawn

Pro

We live in a capitalist society which means that the individual is responsible for his own mistakes. If we give out money a company everytime we screw up many companies will take stupid risks and lose money on them because they know they'll get backed up the government and tax payer dollars. Some of the companies (like GM) were to specialized in their business and that's why they're doing poorly. That's unfortunate for the workers who had nothing to do with it but that's capitatlism. Another company will buy them out or they'll have to restart from scrap. This is how our system has worked (and quite well I might add) for over 200 years. To defeat my argument you'll have to explain why we shouldn't be capitalist and what type of government we should change towards.
askbob

Con

By challenging me to this debate my opponent has agreed to follow the new TOS as listed and explained in this forum thread: http://www.debate.org...

I would like to thank my opponent for such a relevant and current topic.

I surmise from my opponents introductory round that the resolution at which he is attempting to resolve is this:

1. Our country (system) has operated under the laizze faire (let do) economic system for the past 200 years.
2. By bailing out car companies we are not capitalist.
3. Laissez-Faire type capitalism is superior to all other forms of government.

[Definitions]
Laizze Faire - The government does not interfere in the economic system.
http://www.google.com...

capitalist mixed economy - is the main capitalistic system, where the state intervenes in market activity and provides some services.
>>(Scott, John (2005). Industrialism: A Dictionary of Sociology. Oxford University Press.)<<

1. First off I would like to rebut my opponent's first main point that our country has operated under the laizze faire economic system for the past two hundred years.

As should be obvious to the bulk of economists and anyone with a clear understanding of economics, our country has not operated under a Laissez-Faire economic system for the past two hundred years.

Numerous examples include The First Bank of the United States (1791) and the Second Bank of the United States (1816) as well as the Tariff of 1828. All of which do not need sources as they are historically known facts of establishment. The legality of the Bank was upheld in the U.S. Supreme Court case McCulloch v. Maryland 17 U.S. 316 (1818)

>>(Report on the Bank, in Syrett, ed., Papers, 7:326-28)<<

For further proof that the United States has not operated under the Laissez-Faire economic system observe the following:

The Pacific Railway Acts provided the development of the First Transcontinental Railroad
(see the McKinley Tariff and Dingley Tariff). Moreover, with the enactment of the Interstate Commerce Act of 1887, the Sherman Anti-trust Act.

2. Laissez-Faire economic system is a type of capitalism, however it is not equivalent of capitalism. All things capitalist are not laissez faire.

Example: A poodle is a type of dog but all dogs aren't poodles.

In fact, a capitalistic mixed economy is the main type of capitalism present today. And it has been existent in the United States for the past two hundred years.

3. First, Laissez-Faire economic system is not a form of government, it is an economic form.

Secondly there is a larger importance beyond bailing out companies especially financial institutions than just saving jobs. This is to restore consumer confidence in the banking system. If every average Joe were to withdraw there money from banks thinking the entire industry was going up in flames and they would lose their money. More banks and industries that were otherwise excellent productive financial institutions would fail for no other reason than just sheer panic from the uneducated masses. As you can see this would cause severe devastation to our economy. In short, shoring up a few businesses saves many businesses. It isn't a question of whether things would return to normal under a Laissez-Faire economic system, but how fast things would take to improve. By restoring consumer confidence (which is 3/4 of all economic activity) we are essentially speeding up the recovery.

Example: Think of the current situation as a fire in a forest. If a small group of trees are burning reason dictates to put them out. While letting the forest burn would ultimately recover. Its about how fast the forest would recover.

While I have successfully provided refutations to my opponents resolution, I would like to remind voters and my opponent that it is he that must prove all three of his implied resolutions that he clearly implied in his resolution.

I would like to thank my opponent for this debate and look forward to his proofs of his resolution.
Debate Round No. 1
crackofdawn

Pro

I thank my opponent for some good points and for accepting my challenge.

<>

<>

These cases are true but you can't not criticize something just because it has been done before. If you kick someone in the foot and you hurt someone does that make it okay for someone to kick you in the foot? No. My opponent makes the Laissez-Faire economic system look like a bad thing. This debate is about principle.

<>

This is true but all Laissez-Faire things are capitalistic.

Example: Not all dogs are poodles, but all poodles are dogs. (Converse of his example)

First of all, the bailout MIGHT NOT EVEN WORK. In that case it was a waste of tax payer dollars. I believe that people should have to deal with their own mistakes.

Example: If someone opens up a drink store and sells lemonade really well, theythen they change to just selling lemonade, then winter falls. They don't sell anymore and you end up making more money off of selling hot chocolate. This would normally lead to them just going out of business and you would gain all their customers. However, lets say someone pays them off and they come back next summer and this time they do better than you. More money is poored from the government to your companies as you each compete, which in a sense defeats the purpose of competition. Competition is the basis of anything capitalist.

Some would say it wouldn't be fair that some of the person's employees of the lemonade stand would lose their job. Well I say that's when the company who did well comes in and scoops up the companies losses and buys them out. This saves the jobs and also profits the company that made good business decisions.

1) People should have to deal with their own mistakes.

2)Those who are affected by the mistakes of others, are also affected by the success of others (i.e. another company buys them out and keeps their jobs)

3) No requirement for success because of "Big Brother" government leads to risky investments and canceled loans.

4) Banks putting out risky loans out of greed because the government would pay them back any losses on it was a major cause of the mortgage crisis.

I look forward to your response and I'm thrilled by the level of detail by which you deliver your points.
askbob

Con

I would like to thank my opponent for his polite and well structured response.

Let us now return to my opponents implied resolution and his corrections of it.

1. Our country (system) has operated under the laizze faire (let do) economic system for the past 200 years.

"This is how our system has worked (and quite well I might add) for over 200 years."

My opponent has conceded that our system has not operated under the Laissez-Faire economic system for the past 200 years when he declared in R3 "These cases are true"

My opponent then goes onto state that this debate is one not on facts but on principle. While this may have been acceptable if my opponent stated "This was how our system should have worked or was designed to work for over 200 years" this logic would have been perfectly acceptable, however my opponent clearly has stated in his resolution that "our system

>>>has worked for the past 200 years<<<

Implying that we have operated under the Laissez-Faire economic system which it clearly has not as has been highlighted and explained by me in R2 and conceded by my opponent in R3.

Then my opponent goes onto say that I have attempted to make the Laissez Faire economic system look like "a bad thing.

Nowhere in my argument have I critiqued the Laissez-Faire economic system in anyway. I have merely denoted that our system has indeed not operated under it for the past 200 years but rather the contrary. I have then gone onto state the current benefits of the "capitalist mixed economy" which we currently now and have previously operated under.

2. By bailing out car companies we are not capitalist.

My opponent to back up this resolution simply states that Laissez Faire principles ("things") are capitalistic and gives an accurate converse statement of my previous example.

I would like to state for the record that I not once in my previous argument made any declaration that the Laissez Faire principles were anything but capitalistic. In fact I myself denoted them as being a form of capitalism when I stated:

"2. Laissez-Faire economic system is a type of capitalism, however it is not equivalent of capitalism."

Therefore I do not correctly see my opponents reasoning in attempting to refute a point I affirmed in my opening argument.

Since my opponent has not offered any coherent logic on how the United States is not capitalistic if they do indeed bail out the auto industry (as the capitalistic mixed economy is the most common type of capitalism present today), then I do have to find that my opponent has conceded this point in his resolution by not addressing it.

3. Laissez-Faire type capitalism is superior to all other forms of government.
My opponent has offered no proof (as the burden of proving the resolution rests upon him) of how the Laissez-Faire type capitalism is a form of government.

My opponent has also offered no proof on how the Laissez-Faire type capitalism is superior to all economic forms especially the current form we have today.

My opponent does offer a notion that the bailout of the auto industry might not work.
:First of all, the bailout MIGHT NOT EVEN WORK.

He offers no proof as to how it might not work nor what the bailout essentially is. The bailout which my opponent has been touting as a waste of tax dollars and a reward for screwing up is essentially a loan to the industry (that must be paid back in full) in exchange for a large chunk of preferred stock.
http://www.cnbc.com...

This loan is only given out if the company has a strong business plan highlighting how they plan on getting out of this mess.

My opponent then essentially details a large example which essentially loses its effect on me. I do surmise that his main point is that bailouts defeat the sense of competition. However no sources are used to back up this premise. And the financial and auto industries are certainly far more complex than a lemonade stand.

Essentially the global economy is in one of the greatest de leveraging periods that we may see in our lifetime. Additionally my opponent has not refuted the point I have made about how the financial bailout essentially quelled fears about the financial industry. For a clear example simply study this graph of the LIBOR Rate, which is essentially an idea of how frozen the credit industry is.

The London Interbank Offered Rate (or LIBOR) is a daily reference rate based on the interest rates at which banks borrow unsecured funds from banks in the London wholesale money market (or interbank market). It is roughly comparable to the U.S. Federal funds rate.
http://en.wikipedia.org...

Here is the graph
http://www.contrahour.com...

As you can notice the credit crunch is slowly coming to a halt (at the very end of the chart) as the bailout is taking effect detailing how the bailout has essentially prevented one of the largest credit freezes in the history of the United States.

My opponent then essentially resorts to one - liners that provide no real substance nor provide any credible sources.

Since I do have extra room in this debate I will address one of my opponents points in his one-liner category.

"4) Banks putting out risky loans out of greed because the government would pay them back any losses on it was a major cause of the mortgage crisis."

First off there was relatively no precedent for the government for backing these loans.
Secondly the sub-prime mortgage crisis was not do to bankers being greedy but the notion of variable rates whereas the people accepting the loans took low variables rates when the economy was at its best, but were simply unprepared for when the rates changed when the economy worsened. It is not the bank's nor the governments responsibility to prevent stupidity of its citizens. At least that is not a capitalistic idea.

Additionally the current credit freeze is not because of a few bad loans. It is due to the Fed pouring too much liquidity into the market during the .Com crash and not mopping it up afterwards which made it extremely difficult for banks to pay their profits which led to the sub prime mortgage crisis. If a finger must be pointed, point to Allen Greenspan the former Federal Reserve chairman. Additionally the bane of the current mess is due to the unregulated derivatives on derivative trading that occurred throughout several financial institutions such as the Lehman Brothers and AIG which in turn triggered the global freeze we are in.

However I digress. Since my opponent has conceded two parts of his resolution and did not defend the other notion with any logic or facts, I will ask him politely to provide logic for his resolution in the final round.

I would like to thank my opponent for such an interesting debate and appreciate his kind and thoughtful remarks. I look forward to his final round.
Debate Round No. 2
crackofdawn

Pro

I like to debate but to debate just for the sake of debating when I have had my mind changed by the opposition and no longer believe in my former clause is pointless. I thank my opponent for a good debate and hope you all vote for him as he has clearly beaten me.
askbob

Con

I would like to thank my opponent for the great complements he gives me. I would like to thank him for challenging me to this debate, and I hope that it has given him all he wished to take away from this debate. I would like to extend my hand in friendship and welcome him to this debate site.

I humbly thank my opponent for his excellent points and his polite attitude throughout this debate. It is a rare thing when someone not only remains polite throughout the proceedings of a debate, but also reply with such promptness and extend such great complements. For this I graciously thank my opponent.

If my opponent would like to discuss the matter of the current financial situation further, I implore him to join a topic I have made on the forums part of this site.

Votes that are not explained in the comments section as per the TOS I have made will not be counted. Therefore I request that all voters seeking to cast their vote to do so in the comments section with written explanation for each vote.
Debate Round No. 3
10 comments have been posted on this debate. Showing 1 through 10 records.
Posted by Dumbchic 6 years ago
Dumbchic
I like the other guy's argument better.
Posted by TheSkeptic 8 years ago
TheSkeptic
Conduct - TIE: Both sides were very courteous.

Spelling&Grammar - TIE: No major mistakes on either side.

Convincing Arguments - CON: PRO forfeited and told voters to vote for CON.

Reliable Sources - CON: He had the sources.
Posted by askbob 8 years ago
askbob
Its because a member of this site has made fake accounts to vote bomb me. Contact me by personal message or on the forums
Posted by crackofdawn 8 years ago
crackofdawn
How come I'm winning? It's obvious you won and that I lost. I ask people reading this to not vote for me in the convincing arguments part... at the very least.
Posted by askbob 8 years ago
askbob
Tally:

Con: 13 points by the users: Logical Master (6) JBlake (7)
Pro: 0 points
Posted by JBlake 8 years ago
JBlake
All points go to Con, since Pro conceded.

Even Pro was convinced by Con's argument.
Posted by askbob 8 years ago
askbob
Tally:

Con 6 points by the users: Logical Master (6)
Pro: 0 points
Posted by Logical-Master 8 years ago
Logical-Master
VOTING AS A CLEANER!

CONDUCT: PRO conceded and insisted that CON be the winner. Giving up is not good conduct to me, thus, scissorhands wins this.

SPELLING AND GRAMMAR: Mostly comma problems here and there for both parties. Tie.

Convincing arguments: I could go into more details if needed, but for the most part, PRO dropped his entire case and conceded to CON, thus I automatically give CON the vote here.

Reliable Sources: CON is the only party to use links to cite his information, thus this point goes to CON.
Posted by crackofdawn 8 years ago
crackofdawn
I'm new to debate.org and I wanted to try and talk about a current event which hasn't been completely decided yet.
Posted by askbob 8 years ago
askbob
Why specifically did you challenge me to this debate?
13 votes have been placed for this debate. Showing 1 through 10 records.
Vote Placed by Atheism 6 years ago
Atheism
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Vote Placed by DiablosChaosBroker 8 years ago
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Vote Placed by jamielynn 8 years ago
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