Talk:Economics Lecture Six
Occasionally a major company will suddenly declare itself to be broke and will ask the government for a “bailout” to save its jobs. The car maker Chrysler did this about 25 years ago. The federal government, despite substantial criticism, provided cheap loans to Chrysler to keep it out of bankruptcy. So many jobs were at stake that there was political benefit to some officials for doing this.
You might want to update this to add the April 2009 Chrysler bankruptcy, and last week's GM filing. In the case of the 1979 Chrysler bailout, when the US Government's shares were sold in 1983, the US made a profit of about $350m on the investment.
But don’t expect the government ever to save a company you work for from going bankrupt.
This flatly contradicts the prior sentence regarding the government bailout of Chrysler. Chrysler survived its 1979 bankruptcy so that it could go bankrupt again in 2009! Also, since Oct 2008, you could add Bear Stearns, Fannie Mae, Freddie Mac, AIG, Chrysler, GM, all the major US banks and many regional banks (taken over by the FDIC) to the list of organizations who were wholly taken over or assisted by the Government to save them from going bankrupt? TadghOB 11:02, 11 June 2009 (EDT)
Hi, just wanted to make a quick correction to your example about NBA teams and the number of employees they have. First of all, the example seems to conflate players who play basketball with other staff employees (see  for an example of the various sorts of management positions that an NBA franchise has), of which there very well may be thousands. Further, the size of NBA rosters is limited by the NBA's collective bargaining agreement (to 13 players, source), and not by economies of scale. GregG 19:32, 1 April 2013 (EDT)
- Good points, but the 13-player limit has sound justification in economies of scale. Players need to have playing time to remain sharp, and it is impossible to give playing time to more than 13 players in a 5-player game.--Andy Schlafly 20:01, 1 April 2013 (EDT)
- I do think that the players/employees distinction needs to be clarified; as I mentioned above, there are numerous non-player employees who make the franchise run. Further, if the limit were merely a reflection of economic reality, we would expect that most teams would still have 12 players on their roster (which was the limit until a few years ago). I think there's another factor in that the limit prevents teams from buying up players primarily to keep them from playing elsewhere. GregG 06:41, 2 April 2013 (EDT)
- EDIT After further research, I may be wrong on a few points (teams may be required to have exactly 13 on the roster by the CBA). But I think that the NBA CBA has so many nuances and limitations on franchises' freedom to set the number of players on their roster that it's really not a good example for teaching high school students. GregG 06:46, 2 April 2013 (EDT)
- In most professional sports, exclusivity clauses (meaning one franchise cannot negotiate or talk to or attempt to steal someone under contract to another franchise) does not apply to players alone. Couches, training staff, some management and PR people cannot speak with other franchises until they reach free agent status. Violations of these agreements usually ends up the aggrieved party being compensated. And the compensation is not necessarily monetary. Hence you've heard of deals where one franchises is awarded draft choices for a coach (Bill Parcells going from NE to the Jets, for example). OscarO 16:41, 2 April 2013 (EDT)