Americans – You’ve Lost Your Minds

autobk Is it just me? Am I imagining that our President just directly intervened in the private sector re: Chrysler? Did he just circumvent a whole host of laws and regulations and redistribute wealth as he saw fit? Did he, via his fundraising/car czar thug Steve Rattner, threaten a private investment company if they didn’t do what he said or wanted? Let’s review just to make sure I’m not imagining things:

1. Creditors (Banks) first in line would get $2 billion — about 29 cents on the dollar.

2. Cerberus Daimler owed $2 billion they get ZERO. Think about that for a second – You put $2 Billion dollars into a company and the Prez of the United States tells you sorry – Bankruptcy laws do not apply here. You’re screwed.

3. Taxpayers owed $4.3 billion. – Funny, still don’t know what we’ll get. Oh we have an 8% paper stake on a company. So for right now and I believe in the future, the US taxpayer gets ZERO.

4. The unions are owed $10.6 billion. They would get 43 cents on the dollar and a 55% equity stake. THEY’VE NEVER INVESTED A DIME INTO CHRYSLER.

Perella Weinberg was threatened by Rattner and his ilk. They were told that if they didn’t get on board that the US Government would use the full force of the IRS and SEC to audit and investigate them. They were told that the media would be used to paint a very negative picture. In a matter of hours of the meeting between the Rattner gangstas and Perella Weinberg it was done. Perella was out of the lawsuit.

Now the unions get 1 seat on the board, our Congress gets 4 seats on the board (Which member of Congress or the Admin has run an auto company before? Shhh- ZERO!!!) and Canada gets 1 seat too. So we have 2 governments and 1 UAW who have never run a profitable business ever, now running an auto company.

Zero Hedge has some excellent pieces on the Chrysler Coup (That’s coup not coupe). Zero Hedge-Chrysler

Ok I think that’s right. Please, anyone, correct me if I’m wrong but the above is a perfect example of a President usurping laws, threatening private companies, and making up the rules in whatever way suits him. I think that’s called fascism.

Another fine example is Timmy G, the Mad Hatter of all things Treasury. This poor little tax evader who’s in charge of our Treasury including the IRS does cute little stress tests with the banks. First he relaxes mark to market rules so that the banks can value their toxic assets in whatever way they see fit. Then he structures the stress tests to show as little as damage as possible – not structuring it for the worst case scenario possible. All this for what? Time. Obama, Geithner, and Bernanke are buying time. Why? Because they don’t know what else to do and because they don’t want to do what is right. They’re interested in 1 thing – power.

Congress and their out of control spending – Deficit spending has NEVER worked. Japan proved that in the ’90s and they didn’t even have the CDS or MBS problems that we have. England is actually showing us in real time that it fails miserably. Hell, President Bush with his $163 billion stimulus package showed us that it doesn’t work.

These examples by the Prez & Company brings me to the bigger question I have. What is up with Americans?

Seriously folks, I’m having a hard time on why you continue to put up with this crap? Why do you feel that its okay for a President to completely disregard the laws of the United States? Why is it acceptable for the Secretary of Treasury and the Fed Chairman to bullshit you repeatedly? Since when did you start believing that spending more than you ever take in is a formula for success?

I’m really disturbed by this lack of critical thinking as it takes minimal effort from an individual. I guess you’re just throwing in the towel right? Too much of a hassle to think and question the validity of what this Administration and Congress are doing huh? Just too much to deal with in ensuring the future of your children are secure I guess? Maybe it’s as simple as being glued to American Idol or waiting for that next tweet.

Well to quote Alexis de Tocqueville – “The people get the government they deserve.”

Since when did all common sense leave you America? Since when did you not care that you were being bent over and taken for a ride?

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This entry was posted by Fleckman on May 7, 2009 at 6:03 pm, and is filed under Politics. Follow any responses to this post through RSS 2.0. You can leave a response or trackback from your own site.

http://www.kalamazoopost.blogspot.com Tony

Only one point here. You state:

“4. The unions are owed $10.6 billion. They would get 43 cents on the dollar and a 55% equity stake. THEY’VE NEVER INVESTED A DIME INTO CHRYSLER.”

The unions have a contract with the auto makers to provide labor. They never intended to be at-risk investors like bond-holders and stockholders. They never expected or got capital gains and dividends. You are correct, they never “invested” in Chrysler. Other contractors such as suppliers who provided axles and seats and windshields are getting 100% on the dollar for their goods and services. The UAW is getting 55%. I don't see your point.

The other angst is more of the same. Chrysler is absolutely free to file bankruptcy, that is their choice. The management of Chrysler is responsible for this mess, not the US gov't, and certainly not the Obama administration and Tim Geithner!!!! Did Obama and Geithner tell Cerberus to overpay for Chrylser? To sign on to oppressive labor and supplier contracts? To design unreliable cars?

The argument (whether you buy it or not) is that a bankruptcy would cost the US taxpayers more than $4.3 billion in the long run, and while I tend to agree with you that some creative destruction may be in order (let's face it, Chrysler and GM were destined to go down in the next business recession anyway– heck, they were barely hanging on in the good times)– I think your anger and disgust is completely misplaced. How much did Wagoner and Nardelli make the last few years for signing all those idiotic contracts and designing crappy cars? How much will the CEO's and upper management make this year? Stock and bond holders who allowed the boards to keep these managers in place should see their investment go to zero.

The UAW were just doing what they were contracted to do. (And many of them gave up the opportunity to do other jobs those past 30 yrs that may have paid them well.)
http://www.flecksoflife.com Peter Fleckenstein

Great points Tony. Yes I do place a blame on the Management, Board, and stock and bondholders as well. Cerberus, as all investors, took a risk and is not guaranteed anything. Just like the at risk investors are not guaranteed neither are the unions. They made a choice as well.

The government also made a choice as well. The choice to foist regulation upon regulation on the auto industry they didn't help them at all. The CAFE standards come to mind as one such set of regulations that didn't really work. Why? Because the free market, consumers, didn't really want these types of cars.

You are also 100% correct that this was not Geithner's nor Obama's fault. I was primarily focusing on what the Obama administration has done after the down fall of Chrysler. What they have accomplished is the complete destruction of bankruptcy laws. You literally have an administration ripping up contract law for their own political benefit. Think about it for a second, we have bankruptcy laws in place that have been designed and proven to work for just this type of situation. So why is this administration, who's never run any business ever before, completely throwing away this prove framework?

Unions have turned out to be destructive for the company as well as the individual employee. We have but to look at Toyota to see that producing and selling a car can be done with good profits for the company and fair wages and treatment of its employees.

Personally, if I was CEO of GM or Chrysler, I would have filed bankruptcy a long time ago and told the Administration to go pound salt and refuse any money from them. I would tell the unions that the deal is if you want to survive, if you want your members to keep their jobs then you have to change your failing ways as well. I would tell the at risk investors – you play, you pay as well. Would there be pain? Absolutely. However, there would have been a much better outcome, through the use of bankruptcy laws, for all involved.

With this President and current administration, I'm afraid that the only creative destruction occurring is for their own gain and the gain of their supporters- not for America.
Theresa

I hated you and your kind when you put George W. Bush in office 9 years ago. I knew all of this would come to happen and I was right. You are the fools. But instead of some thoughtful introspection NO! you would rather blame the people who are trying to fix it. Your judgemental elitist attitude is rotten and stinks to high heaven.
Theresa

I hated you and your kind when you put George W. Bush in office 9 years ago. I knew all of this would come to happen and I was right. You are the fools. But instead of some thoughtful introspection NO! you would rather blame the people who are trying to fix it. Your judgemental elitist attitude is rotten and stinks to high heaven.

Americans – You’ve Lost Your Minds

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