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Message Subject Good Bye Obama
Poster Handle No Dhimmi
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The GM Bailout

Destroyed some of the most important laws and precedents. In order to "save" GM and Chrysler without benefiting wealthy investors, the Obama administration broke the law. It abridged the clear contracts of Chrysler's secured creditors (stealing their collateral and repaying them pennies on the dollar) and broke bankruptcy laws by awarding far more benefits ($17.8 billion) to GM's unionized creditors than it did to the company's bondholders ($8.1 billion). The inequities of these grants have gotten far worse over time, thanks to the privileged status of the union's GM-preferred stock, which pays a 9% annual dividend and consumes the lion's share of the company's operating profit.

The government wasted hundreds of billions of dollars in capital to save a company whose products are mostly sold in other markets and aren't competitive in the U.S. And in doing so, it destroyed several hundred years of legal precedent that provides the foundation of capitalism in America.

No matter what else you believe about the importance of GM or its workers, that wasn't a good decision. That $200 billion could have (and should have) been spent in a far more productive way. In time, the profound consequences of these poor choices will become abundantly clear.

GM will go bankrupt again, that's almost certain. It is, even as I write this, heading straight back down the path of borrowing enormous sums from Wall Street. It has re-launched its financial division and is, once again, making loans and leases to people who can't afford its cars. It is, once again, selling huge quantities of poorly made vehicles to rental-car companies, which wipes out the resale value of its automobiles and makes consumers far less likely to pay full price for them. It is, once again, "stuffing" the channel – forcing dealers to buy too many cars that they can't sell. It is doing all of the same things that drove it into bankruptcy the first time… the very same things.

One last point to ponder… all of the information above is public information. It is all part of the public record. How many of the candidates or members of the media are willing to discuss the plain facts of this situation? What does that mean for the future of our country… where even public investments of this size and magnitude are not understood or discussed openly by all serious media outlets? If we can't figure out what to do with our carmakers… how will we ever figure out what to do with the world's most powerful army… with the world's largest debts?
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