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Friday, June 3, 2011

President Obama: Economy on bumpy 'road to recovery' - Abby Phillip -

President Obama: Economy on bumpy 'road to recovery' - Abby Phillip -

As a lifelong Detroiter with a family that has been involved at all levels of the auto industry, it is sad to see what has become of the Big 3. The Auto 'Bailouts' (which were actually loans- unlike the billionaire cash-giveaways to the Wall Street banksters) were supposed to PREVENT bankruptcy. That was a blatant lie. Instead, they led to a government-controlled bankruptcy, which violated over 100 years of bankruptcy law, voided Bondholder and Shareholder rights (which raided many retiree's economic lifelines), and ended up being a political payback to the UAW, which received stakes in the companies that they played a large part in driving into the ditch!

If there had been an actual, LEGAL bankruptcy proceeding, then GM and Chrysler would probably have emerged in virtually the same condition they are now, but with a diffferent ownership mix and FAR less Taxpayer dollars down the drain. GM and Chrysler were caught in the credit crunch in 2007-08 when the banks they routinely relied on to finance operating capital (which is a standard industry practice) put them in a corner by refusing to loan them ANYTHING. Picture a small business or a family farm that relies on a revolving line of credit for operating expenses. Imagine that credit line being revoked with no prior notification or valid reason. That is what happened to the US automakers.

In steps the Bush/Obama Bankster Money Machine, where 'no crisis goes to waste', and the law, fairness and common sense go out the window- since the government can virtually take over an industry and make political paybacks to their Union supporters. If a real bankruptcy had been allowed, GM would have been able to raise capital, reorganize and retool in virtually the same manner that it did with Government interference... er 'help'. Chrysler, meanwhile has been de fact taken over by Fiat, which is also a probable outcome that would have taken place in a normal bankruptcy. THe only difference is the political paybacks to the Union, the voiding of the BOndholders' rights, and Billions of dollars in taxpayer money down the drain would NEVER have taken place.

As Ronald Reagan once said, "The nine most terrifying words in the English language are: 'I'm from the government and I'm here to help you."

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