Skip to comments.Ask GM Bondholders and Delphi Retirees About Obama's 'Economic Patriotism'
Posted on 10/04/2012 11:52:05 AM PDT by jazusamo
President Obama called for a "new economic patriotism" during last night's presidential debate. Well, hold on to your wallets as this new buzz phrase seems to be a euphemism for "wealth redistribution." Just ask old General Motors bondholders or non-unionized Delphi retirees about how Obama's so-called "shared sacrifices" are more about cronyism than patriotism.
President Obama is campaigning on a platform that constantly touts everyone "paying a fair share and having a fair shot." Unfortunately for those that do not belong to a politically-favored class, the Obama Administration gets to determine what is fair. This was evidenced during the GM bankruptcy process where groups that were supposed to have equal legal standing saw that some are considered far more equal than others. GM bondholders were moved to the bottom of the list as the Obama-friendly UAW had its claims given precedence. And, in perhaps the clearest and most egregious example of cronyism and political payback, non-unionized retirees at GM's bankrupted parts maker, Delphi, had their pensions sacrificed as the Obama Administration saw to it that UAW pensions were protected.
During the debate, Obama also complained about Exxon-Mobil benefiting from tax subsidies. Really? Perhaps a discussion should be had on how General Motors (one of the cornerstones of the Obama campaign) paid NO taxes in 2011 (they actually had a credit of $110 million) while Exxon-Mobil paid $31 billion in taxes. This was the result of a sweetheart deal whereby the Treasury Department granted GM billions of dollars in tax credits to offset future profitability. I have yet to hear the Mainstream Media present these elusive facts to counter the populist rhetoric of the President. It would seem like the call to have "everyone" paying their fair share doesn't exactly apply to "everyone."
At the heart of the Exxon-Mobil exchange were energy subsidies which apparently equal $2.8 billion a year to oil companies. I actually agree that the subsidies should be cut; along with all other energy subsidies, including the green energy subsidies that are costing billions of dollars and doing nothing to help end America's foreign oil dependence. Just look at the electric vehicle subsidies. Obama wants a million plug-in electric cars added to America's roads over the next few years. He also wants to subsidize this with $10,000 from taxpayers for every vehicle sold, or in the case of the Chevy Volt, leased.
The proposed cost to taxpayers for a million EVs would be $10 billion. The resultant benefit to America's oil consumption would be fractional, as there are 250 million vehicles registered in the country that account for less than half of all oil consumption. Specifically, we would reduce oil consumption by less than 0.2% percent at the cost of $10,000,000,000. With logic and agendas like this, is it any wonder that America has a debt crisis?
When Americans hear more talk of "economic patriotism," as I am sure they will, they should bear in mind that what some people feel is patriotic may not be considered so by others. Those that are the victims of wealth redistribution (by any name) may not agree that taking money from classes that are not politically popular to distribute it to more politically popular cronies is anything but patriotic. And those that condone the frightening vision for an "economically patriotic" America may regret their choice if they eventually end up being the ones that are giving, rather than receiving, their cut of the fair share.
Mark Modica is an NLPC Associate Fellow.
have the GM bondholders suid the government for the unlawful taking they endured?
I'm not up on all that took place. I believe bankruptcy law was changed for this bailout and that's what screwed the bondholders. There was a lawsuit or lawsuits connected to bondholders after bailout, don't know the results but I understand it basically ended up that lost bondholder dollars more less benefited the UAW pension fund.
Contract law was trampled as claims that were supposed to be equal received unequal treatment. GM and Team Obama chose a debtor-friendly venue of NY by starting an action against itself when GM-owned Saturn of Harlem initiated a claim against GM in that court.
Debtor-friendly Judge Gerber ruled against bondholder group that sought due process and a negotiated settlement. Treasury Department, through Auto Task Force member Harry Wilson threatened full liquidation of GM if the court did not agree to Task Force/Obama’s plan. The plan was enacted as sought and bondholders received a fraction of what the UAW got. Approximately 10 to 15 cents on the dollar compared to a typical negotiated bankruptcy which would have seen them get 40 to 50 cents on the dollar.
Thanks much, Mark. Bkmk for later use.
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