One thing that we DO know. If Obama in fact, did have the socialist agenda that
so many claimed, he would have expanded, rather than relinquish, government
ownership of GM. I expect that all the right wing talk show hosts
will come out and admit they were wrong.Or not.
Wow, you really thing it was a bad idea to save millions of jobs and the entire
infrastructure of the American auto industry?
President Bush's loan actually saving our economy. This was only a bad idea
to Romney. Cost him Ohio and several states.
If you look closely at the bankruptcy proceedings, this was more a UAW bailout
than a GM bailout. Buying votes can get pretty expensive.
Nothing like Monday morning quarterbacking. This editorial opinion reminds me of
all those who say that FDR should not have intervened in the Great Depression
and actually made it worse with programs like the CCC and TVA. All of those who
weren't starving at the time have plenty of good ideas in retrospect based
on ideology.Just one quick point: There were no companies that had
the money in 2008 to buy GM and loan to Chrysler--only the US govt was in that
position. The editorial board needs to get their foundational arguments at least
a little closer to the truth before building towards a conclusion.
@Nate – “Buying votes can get pretty expensive.”Since the bailout was started under Bush and finalized under Obama, who was
buying which votes?We should also note that this short (slightly
biased) article does what good opinion pieces are supposed to do – states
some facts, raise a few questions and prompt readers to think (use your own
brain) rather than just give them an algorithm which tells them what to
think.See Fox/AM radio patrons – this is what it looks
like… I know, strange huh?PS – good comment JoeBlow.
Facts like these should cause most reasonable people to question their own
assumption, but that would require an ability towards self-reflection and even
self-criticism that is sorely lacking on the Right.
President Obama: Worst Socialist Ever. First he let the banks pay off their
loans and now this. Any good socialist would have used the looming threat of
another Great Depression to nationalize both the banking and the auto
If the GM and Chrysler bailouts were necessary (highly likely) and if the
ongoing bank bailouts are necessary (even more likely), then some brand of
socialism is inevitable for the United States. Get used to it. But since we
can't discuss these things we will make this critical decision under great
duress and stress and extreme conflict.In the D-News' mind does
"no Government Motors" mean no socialism (again highly likely)? But you
will not get your way. You could do much to ease the transition.
@Nate.... Obama already had those votes, with our without the buyout. The idea of having a foreign company come in and buy up the American
manufacturing infrastructure just was not a palatable option - even if anyone
did have the money to pull off such a deal. But that was the second part of the
problem, capital liquidity was non-existent. The normal players who would have
funded a buyout were also taking money from the government to get their books in
order. There was no one that had the capital to spend.Add to that,
if GM had gone upside down, all those pensions and retirement funds would have
fallen on tax payers to bail out. So it was an ugly deal in an ugly
situation... that served a valuable purpose. It was a hold your nose and take
your medicine time in our economy.
@Tyler D "Since the bailout was started under Bush and finalized under
Obama, who was buying which votes?"Since the bankruptcy
proceedings which I suggested you examine more closely occurred in April and
June of 2009...who do you think was buying votes? The bondholders were paid
cents on the dollar, the shareholders were all but wiped out, and and the UAW
came out with 12% ownership. Union votes don't come cheap.
@Nate – “The bondholders were paid cents on the dollar, the
shareholders were all but wiped out…”When a company goes
under shareholders should be wiped out. I know of no self-respecting free market
capitalist who would find this disturbing.As for bondholders, their
investments were not risk free either. Further, given the choice between making
them whole and us taxpayers taking on the failed pensions of GM’s
retirees, paying the bondholders pennies on the dollar seems the better
choice.That said, had GM gone under in normal economic times I would
have been against a bailout. Stock & bond prices would have been trading at
prices that would reflect this possibility probably long before any bankruptcy
occurred – again, little reason to feel sorry for investors here.However, given the unprecedented circumstances in 2008, I’m not sure the
bailout was not a net positive (although Ford & Toyota may have justifiable
cause to be unhappy about it).But I would prefer to decide the
merits based on facts and careful analysis rather than plugging in a right-wing
algorithm and seeing this as a cynical ploy to buy votes.
Just like in the Book of Mormon, when God wanted to emphasis a point: "And it came to pass..."The older I get, and more history
I witness be written...The more obvious and completely WRONG Republicans
have become.---Roland Kayser, blue ribbon winnner for
Greatest line -- "President Obama: Worst Socialist Ever. First he let
the banks pay off their loans and now this."beautiful, just
What the article does not address is how many policemen, teachers and other
public sector workers lost their retirement funds (which consisted of GM and
Chrysler stock) when Obama paid off the Unions and gave a large share of those
companies to Canada. Those who held shares in GM and Chrysler were put at the
bottom of the "heap" instead of at the top, where they belonged. Those
who owned the company had first claim on any money coming in. GM's and
Chrysler's unions funds had no more right to that money than Detroit's
unions have the right to be paid at the expense of Detroit's creditors.
Many of us will never buy another GM or Chrysler product.
Ford's products work just fine for me and for my family. We will never
purchase another product from GM or Chrysler until every share holder has been
paid the full fair price for his stock and until the Unions hand back all funds
that they received at the expense of the owners.
Mike RichardsSouth Jordan, UtahMany of us will never buy
another GM or Chrysler product. ====== So then, We
can all safely assume you don't drive an evil sin-filled
"socialist" made German, Japanese, British, Italian or Korean product
either -- Fords and only Fords?I'm fine by that, if it's
true...but your comments do tend to waffle and lack a rock solid-core of
hose who held shares in GM and Chrysler were put at the bottom of the
"heap" instead of at the top, where they belonged."Mike,
for one who professes to know the law so well, I am surprised to see you write
this… that is not how it works…… ever… under any
circumstances. Shareholders are "owners"… and owners are always
paid or made whole after creditors.The Unions were creditors by
virtue of the fact that GM owed the pension funds of the unions large amounts of
money. GM had been underfunding these escrow accounts. It really is not
discretionary like you make it sound.So this begs the question, are
you saying the government should have broken the law, gone around existing
bankruptcy laws, to put owners ahead of creditors in these proceedings? I guess
you will be driving only Fords from here on out… because what you are
asking for is… frankly … illegal.
I too think Bush should've let GM fail. They created their own mess by
building lousy products. Now they seem to have learned their lesson, but things
might have been even better had a smart group of investors taken over those
Mike RichardsSouth Jordan, Utah Many of us will never buy
another GM or Chrysler product. 11:40 a.m. Dec. 11, 2013======== Two can play at this game Mike,I'm never
EVER going to buy another Hostess product again in my life.or shop at
WalMart or eat at McDonalds.so there, hrrumpf!
airnaut,Unless you are a citizen of Japan, Germany, or of any other
country that you mentioned, your point is nullified. We are citizens of the
United States of America. You have stated that you have taken an oath to defend
the Constitution of the United States. You have stated that you work for the
Department of Defense. As a citizen, you and I are obligated to uphold the
Constitution as written and amended, not as wished. The 5th Amendment states,
in part: ";nor shall private property be taken for public use, without just
compensation." Obama broke his oath when he took private property
(stockholder's equity) and gave that equity to unions and to foreign
governments without paying those stockholders "just compensation".Every citizen in America has the right to demand that all federal
officials uphold the Constitution. No American can ever ask a federal official
to ignore the Constitution as he carries out his duties as a temporary worker
who serves us.Obama ignored the Constitution. What he did was far
more than a "misdemeanor". He seized hundreds of millions of dollars and
redistributed that money without giving just compensation.
UtahBlueDevil,Thanks, you made me read what the experts say about
who should be paid first. I'm afraid that the experts do not agree with
you. Here's a quote National Affairs, written by Todd Zywicki about
Chrysler (but it shows the ranking of debtors):"Chrysler had
been unable to acquire routine financing and so had been forced to turn to
so-called secured debt in order to fund its operations. Secured debt takes first
priority in payment; it is also typically preserved during bankruptcy under what
is referred to as the "absolute priority" rule — since the lender
of secured debt offers a loan to a troubled borrower only because he is
guaranteed first repayment when the loan is up. In the Chrysler case, however,
creditors who held the company's secured bonds were steamrolled into
accepting 29 cents on the dollar for their loans. Meanwhile, the underfunded
pension plans of the United Auto Workers — unsecured creditors, but
possessed of better political connections — received more than 40 cents on
The Government continues to bail out large companies each and every day through
corporate welfare programs. Republican's are in fact socialists when it
comes to using taxpayer monies to subsidize business expenses and pad already
heavy profit margins for some of America's largest corporations. They just
wont promote their socialist policies to directly help the poor and needy. So,
anyone who claims Republican's are true market capitalists are in fact
Mike - You have no clue about how the law works. Again, as owners -
shareholders by law are the last in line. There is not negotiating. The
pension funds that were underfunded by GM were a liability. By law, they must
be in line before equity owners. Obama broke no law… the law
was executed as written. What you are asking to have been done would be
criminal. I was a GM share holder. I lost my equity. I have also been on
the side where debt owed by others to me have been cancelled by the courts
because of scenarios like this. Talk to a real lawyer… not your political
buddies. That LAW is really clear on this.If what you ask were
actually put in action, it would turn the entire bankruptcy process on its head.
Shareholders/owners are always last in line… always.
Nice dodge -- Now, answer the question, please.Do you own or
drive a vehicle made in a "Socialist" country?BTW -- How can you possible show an ounce of integrity or lecture me and my
"oath" of defending America, while you go around buying products from
Communist Red China?
"Those are interesting numbers, but no one knows for sure. And so the
questions linger."Way to cast doubt on two data-driven arguments
with...nothing. What an empty piece. It has nothing substantive to argue about
whether the bailouts were necessary, offers no counter evidence save "no
one knows for sure," and then concludes with the suggestion that the
government needs to continue to monitor the company to prevent further corporate
malfeasance, implying that government paternalism is necessary. I am confused.
Mike Richards,Irrespective of whether you think we should have
bailed out GM, in a bankruptcy most shareholders would have gotten bupkis.
Zero. Nada. The big goose egg.Please clarify your point.
I agree; no more government aid for business operations of any sort. No freebies, subsidies, exemptions, or special deals for Churches, Charities,
business operations, or any other group that provides personal income to its
owner/managers. Government should be for the people and by the
There have been several posters who claim that union pension funds took
precedence over bondholders. Warren Buffet disagrees. In "Assessing the
Chrysler Bankruptcy" by Mark J. Roe, Harvard Law School and David A. Skeel
Jr., New York University School of Law; University of Pennsylvania Law School;
European Corporate Governance Institute, the authors wrote:"Warren Buffett worried in the midst of the reorganization that there
would be “a whole lot of consequences” if the government’s
Chrysler plan emerged as planned, which it did. If priorities are tossed aside,
as he implied they were, “that’s going to disrupt lending practices
in the future. If we want to encourage lending in this country,” Buffett
added, “we don’t want to say to somebody who lends and gets a
secured position that thatsecured position doesn’t mean
RE: Res Novae "Way to cast doubt on two data-driven arguments
with...nothing. What an empty piece. " Indeed. The D-News should use its
considerable intellect to take a position.
Mike.... what you posted was an example of two forms of debtors... secured
versus unsecured. But that does not relate to equity owners versus creditors.
There are varying forms of each, preferred stock holders which have rights
superior to standard owners of equity, and likewise a ranking creditor debt.I don't know the details of the Chrysler debt, since I didn't
have a stake in that company. I in particular don't know the specifics
about the contract signed between Chrysler and the UAW. I am sure the UAW
lawyers made sure they were first in line. Often, employee
compensation comes ahead of many forms of debt... and if this under funding was
classified as back pay owed... that could explain why it got ranked ahead of the
newer loans... which were entered into after the UAW contract. Hope that makes
I am surprised that nobody else saw what I saw in the opinion piece: the type
of Bankruptcy advocated. Romney advocated for the Chapter 13 reorganization,
not the Chapter 7 liquidation. That little detail seems to elude more than a
few. GM and Chrysler should have gone straight to Chapter 13, without the
government bailout which now has cost the taxpayers 10 Billion dollars. As it
stands, it took two years and some sweetheart deals before it finally went that
route, and again the little matter of the 10 Billion dollars we taxpayers are
left on the hook without. Their business model couldn't stand, it should
have gone to Chapter 13 right away, to reorganize and come out leaner. Smaller
yes, but more capable of staying in business. No one I know wanted them to
liquidate, like the "sky is falling" crowd over on the left side accused
the right side of the aisle of wanting. It was mishandled from the start.
@Tyler D "When a company goes under shareholders should be wiped
out."Correct. The other thing that should happen is that
creditors in the same class share the pain equally. This is not what
happened.Shareholders got wiped out...check.Bondholders took a
deep haircut...check.UAW came out nearly whole, with a controlling
interest in the company...what gives?"Further, given the choice
between making [the bondholders] whole and us taxpayers taking on the failed
pensions of GM's retirees..."This is a false choice. The
government didn't have to take over GM in the first place. No takeover, no
taxpayer obligation for the pensions, orderly bankruptcy. But, by doing the
takeover, the Obama administration put itself in a position to get preferential
treatment for its union cronies.You gave a great speech up there on
using one's brain. Great speech.@UtahBlueDevil "It was a
hold your nose and take your medicine time in our economy."Yes,
for everyone except Obama's union pals. They got a special deal.
Taxpayers for Common Sense, a nonpartisan government watchdog that wants to cut
all energy subsidies, estimates that oil companies will receive $78 billion in
industry-specific and broader business subsidies from 2012 to 2017. If we can
give big Oil, which is extremely profitable, that much of a tax subsidy, is it
not reasonable to think, where so much was at stake with these auto companies,
they would deserve some level of assistance. Tell me why I am wrong.
Boycotting everything made in communist China must be mandatory. Throw out all
I'll never buy this or that…. It's called consumerism and
there's nothing wrong with it. People in Cuba, North Korea and Venezuela
seldom have that choice.
Airnaut (re 12/11 Reply to Mike R)...1 word comes to mind. BAZINGA!
to one voteWhat about shopping @ Walmart!?