Posted on 05/28/2011 4:06:57 PM PDT by Hojczyk
President Obama and two of his biggest union allies -- the United Auto Workers and the United Steelworkers -- plan to make the automotive bailout "a central issue" in the 2012 election, Politico reports. Republicans should view this as an opportunity. No issue better illustrates the deception, cronyism, disregard for the rule of law, and bad economic decisions of this White House than the auto bailouts. On Tuesday, Obama announced that Chrysler had paid back all "outstanding loans to the U.S. Treasury and American taxpayers." This is highly misleading. American taxpayers still own a 6.6 percent stake in Chrysler, which cost them nearly $2 billion. Chrysler would have to be worth six times its current value ($5 billion) for the government to break even.
Obama's statement also conveniently forgets the $1.9 billion loan that was erased when Chrysler declared bankruptcy in 2009, and the additional $1.5 billion loaned to Chrysler's suppliers. And don't forget that the only way Chrysler could secure the money to pay off the Treasury loan was by getting Obama Energy Secretary Steven Chu to promise the company an additional $3.5 billion for energy-efficient vehicles. In reality, Chrysler is simply in the process of substituting one government loan for another.
The story is no better at General Motors, which supposedly just posted its biggest profit in a decade this quarter. But GM did not make that money selling cars -- rather, it came from the one-time sale of a subsidiary company. GM had bought Delphi, one of its troubled suppliers, for $2.5 billion in 2009. Then Delphi dumped $6.25 billion worth of its pension obligations onto the federal government's Pension Benefit Guaranty Corp. With those debts gone, GM sold Delphi for $3.8 billion this quarter. Voila -- huge profits for GM, all at the expense of the pensioners who fund and could someday depend on the PBGC (and possibly the taxpayers, too).
Despite these shady deals and accounting shell games, and despite the effective suspension of the rule of law that made the auto bailout possible, the Obama administration still hasn't made this deal worth the investment. According to the Government Accountability Office, U.S. taxpayers have spent $49.5 billion bailing out GM. They will likely never recoup the full $27 billion still tied up in the deal, especially considering that the entire company is only worth $46 billion. And the Chrysler situation is far worse: The government has spent $12.5 billion so far to bail out a $5 billion company. To whatever extent Americans understand the real story behind the auto bailouts, they will be an albatross around the neck of Obama's re-election prospects, not a political asset.
Have the bond holders been made whole, or did we witness “distribution of wealth” to the Unions?
Bond holders will never get anything..
Was it business insider about a year ago that noted that if all parties were to be made whole GM would have to be about $134 a share if my memory is correct.
This thing is only working by the Grace of God, it is so messed up, from an accounting standpoint and contract law, the only think I can think of is the Lord is extending grace to those who are still in these companies, I can find no other reason, logic of business and accounting do not work here.
Not even an offer to join the UAW?
Half of the population doesn’t pay taxes, aren’t on the hook for anything, and don’t care that the other half is.
I doubt it, a majority of Americans are retards who have no business voting, which is the reason the Founders didn't put a right to vote in the Constitution.
Read “The Creature from Jekyll Island.”
The name of the game is bailout!
http://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/0912986395
This book scare the hell out of me.
(I am not a paid spokes man for this book, but I once stayed at a Holiday Inn!)
It SCARED the hell out of me too.
This is like paying off your Visa bill with your MasterCard...and it only works for a little while!
DEFUND corporate collectives. Let them live or die on their own. It’s 2011. Wake up.
Note what it (socialism) has done/is doing to us on its own and inside corporations (unions). Defund ALL socialist collectives. The U.S.A. becomes financially solvent and we become very low-taxed prosperous/productive citizens in a country which acts as a beacon for individual liberty.
In lieu of the other option, hang this albatross around the neck of every spineless POS politician.
“Half of the population doesn’t pay taxes, aren’t on the hook for anything, and don’t care that the other half is.”
“I doubt it, a majority of Americans are retards who have no business voting, which is the reason the Founders didn’t put a right to vote in the Constitution.”
Frederic Bastiat 1801-1850...The Law...
Men naturally rebel against the injustice of which they are victims. Thus, when plunder is organized by law for the profit of those who make the law, all the plundered classes try somehow to enter — by peaceful or revolutionary means — into the making of laws. According to their degree of enlightenment, these plundered classes may propose one of two entirely different purposes when they attempt to attain political power: Either they may wish to stop lawful plunder, or they may wish to share in it.
Woe to the nation when this latter purpose prevails among the mass victims of lawful plunder when they, in turn, seize the power to make laws! Until that happens, the few practice lawful plunder upon the many, a common practice where the right to participate in the making of law is limited to a few persons. But then, participation in the making of law becomes universal. And then, men seek to balance their conflicting interests by universal plunder. Instead of rooting out the injustices found in society, they make these injustices general. As soon as the plundered classes gain political power, they establish a system of reprisals against other classes. They do not abolish legal plunder. (This objective would demand more enlightenment than they possess.) Instead, they emulate their evil predecessors by participating in this legal plunder, even though it is against their own interests.
It is as if it were necessary, before a reign of justice appears, for everyone to suffer a cruel retribution — some for their evilness, and some for their lack of understanding.
It is impossible to introduce into society a greater change and a greater evil than this: the conversion of the law into an instrument of plunder.
GRRRREAT post Hojczyk! Thanks to you and the Washington Examiner editorial board.
FORGET THE SPIN - TAX PAYERS ARE ON THE HOOK FOR ALL OF THE SPENDING BY THE SOCIALIST USA GOVERNMENT! Not just this one. ALL of it.
I vowed never to buy a GM vehicle again and I won’t.
” I like that. I like that a lot! You should have to be over 40 and a land owner to vote. “
So, by your lights, then, a 30-year-old Congressional Medal of Honor recipient, living in Base Housing, has no business having a ‘right’ to vote....
Or, if you decide he (or she) should be given ‘special dispensation’ of some kind, then (”You should get multiple votes based on the amount of taxes you pay.”) some lard-a## corporate exec who has never worn a uniform gets *more* of a say than he will....
BRAAAAKKK - Thanks for playing — please insert another quarter, and try again....
Gee...wonder how our dual citizen (Canadian/US), GM bond LOSING friends will VOTE THIS TIME - they voted for Obomba last time....and they are retired....
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.