Washington Post on GM

Even the Washington Post sees what is going on, article below, so it is not long before the true believers start to emerge from their stupor. Their propaganda gods are speaking.

Previously, the administration "bailed out" Chrysler, forced bond holders into swallowing a deal that removed protected status, a la Juan Peron, then killed the company destroying the bond holders, those evil capitalists. The Obama clan must think investors have a short memory.

Remember when normal businesspeople thought car companies should go bankrupt and get it over with some seven months ago? Let the market take care of the problem, as it does so well? Too bad the companies had no guts.

We were told that going bankrupt will never work. No one would buy a car thereafter and everything will collapse. Then, after the UAW and the state got control, Obama runs the companies into bankruptcy. With Chrysler the bond holders were forced into giving up their preferred status in order to save the manufacturer. Ha Ha.

I don't know how things can be more obvious. I don't imagine ENRON's leaders thoughy in such evil terms. I continue to be amazed at America's lack of critical thinking. Can you say third world? The again, one time shame on you; two times, shame on me. When things hit home, one tends to wake up.

People vote with their feet, in the end. We still have a market economy and there is only government interference, not control. Government trolls cannot fathom anything beyond taxing, let alone control intricate forces. American feet are moving now.

A mediocre car bought from the government/UAW company that has gone bankrupt and stolen investment money from retirees is not a good product placement. Chrysler's first quarter saw 48% few cars sold than the prior year. Hello? I haven't noticed it, but has the government taken on car warranties? They will as their playground collapses. A moron would think that would encourage buyers.

Just wait a quarter to see what happens to GM. Greg says there is a group already formed ready to buy Saturn, a sensible, economical, and cool car. So buy Ford, the last one standing. Of note, Ford has a new economy engine and the Fiesta is coming back - Europe's favorite car.

As an aside, I don't think the GM bond holders are playing nice as Chrysler's did (many being the same persons) with Obama and Chrysler, so GM will be much more of a mess. How that tug of war works will be a good indicator of things to come. Who knows, another Pyrric victory for change?

In the future, many unemployed auto workers will continue to think they were injured by George Bush and vote socialist. Though, the days of the stupid worker are long gone. Just look at union membership numbers. Sooner or later the poor carbon copy socialists will have to take responsibility, but look how long it took England to wake up. (Look for future scandals with the UAW and delf-dealing.)

Chrysler and GM are Obama's gambits. Bush would have let them fail or, perhaps, pulled a deal like the Iacocca one, but it looks like they were on their own as of January 20. The whining about the problems that were inherited is not relevant. The prior people understood government supported and regulated business, not take it over as a toy.

Then again, by the time it is clear who is screwing who, the government will have driven the last resistant voice from the radio. Oh, you are not up on that? Oh well, take another nap?

There is that old moral about the man who saw the gypsies taken away and who said, "I am not a Gypsy." When the Jews were taken away, "I am not a Jew." And so on until the time they came to take the man and their was no one left to complain.


Washington Post:

Editorial

Government Motors

GM's new owner (the Obama administration) should stop bullying the company's bondholders.

Tuesday, May 26, 2009

IN THEORY, a government bailout should provide a short-term infusion of cash to give a struggling company the chance to right itself. But in its aggressive dealings with U.S. automakers, most recently General Motors, the Obama administration is coming dangerously close to engaging in financial engineering that ignores basic principles of fairness and economic realities to further political goals.

It is now clear that there is no real difference between the government and the entity that identifies itself as GM. For all intents and purposes, the government, which is set to assume a 50 percent equity stake in the company, is GM, and it has been calling the shots in negotiations with creditors. While the Obama administration has been playing hardball with bondholders, it has been more than happy to play nice with the United Auto Workers. How else to explain why a retiree health-care fund controlled by the UAW is slated to get a 39 percent equity stake in GM for its remaining $10 billion in claims while bondholders are being pressured to take a 10 percent stake for their $27 billion? It's highly unlikely that the auto industry professionals at GM would have cut such a deal had the government not been standing over them -- or providing the steady stream of taxpayer dollars needed to keep the factory doors open.

GM is widely expected to file for bankruptcy before the end of this month. If this were a typical bankruptcy, the company would be allowed by law to tear up its UAW collective bargaining agreement and negotiate for drastically reduced wages and benefits. That's not going happen. Phrased another way: The government won't let that happen. Still, the threat of a contract abrogation probably played a role in the union's agreement to cost-cutting measures last week. (The details of the deal have not been made public; union members are scheduled to vote on the proposal early this week.) It's never easy for unions to make concessions, but the sting of handing back money is being softened by the government's desire to give the union a huge ownership stake in GM. Might bondholders be more willing to agree to the kind of quick restructuring the government hopes for if they had been treated more fairly from the outset?

The administration argues that it could not risk alienating the union for fear of triggering a walkout that could permanently cripple GM. It also posits that it had to agree to protect suppliers and fund warranties in order to preserve jobs and reassure prospective buyers that their cars would be serviced. These are legitimate concerns. But it's too bad that the Obama administration has not thought more deeply about how its bullying of bondholders could convince future investors that the last thing they want to do is put money into any company that the government has -- or could -- become involved in.

My take is the Obama administration has taken a long thought on what it is doing. It doesn't care about bondholders or the capitalist system except as a source of unearned income. No one in it ever had a job that produced anything. The poor confused Washington Post is conflicted because it retains its prejudices even in the light of contrary action. In the meantime, we can cheer for the new sensitive, woman jurist from Harvard, that bastion of the common man.