Friday, May 1, 2009

Obama Pays Off A Union With Taxpayer Money And Jobs

Barack Obama owes the unions big time for the money and volunteers they marshaled in the election. And he is now paying them back with our money. Does that make Barack and the unions thieves? Could be. The latest gift to the unions is the Chrysler bailout. The union and Obama’s federal government with their GM stock get most of the equity and profits and the private bond holders get screwed. Normally (if financial genius Barack Obama weren’t president) the bond holders would be taken care of before stock holders would be given a share. I guess the main lesson is to minutely examine the political landscape before investing. It might even pay to listen to Rush. But mainly this kind of action from the government will cause invertors to quit investing, increase the drying up of credit and cause lots more unemployment. If you’re unemployed just remember that it’s partly so some $45 an hour UAW worker can own a failed company and continue to manufacture crap that no one will buy. And assuredly more than one normal worker will remain unemployed for every auto worker made rich. And all because the auto guy’s union boss gave millions to Barack.
Below I quote verbatim two paragraphs from Powerline because they nail the sad situation.

The Chrysler reorganization is shaping up as another milestone in the decline of the rule of law under Barack Obama. We've said for quite a while that bankruptcy is the only viable option for Chrysler and General Motors, not--as Obama claims--because they don't know how to make the right kinds of vehicles, but because their unsustainable union contracts make it impossible for them to be profitable. That reality has now been turned on its head, as the administration has tried to bully Chrysler's secured creditors into going away, while the United Auto Workers Union, solely on the basis of political clout, would be paid at an implied rate of 50 percent and would emerge owning 55 percent of the company, with the government also holding a stake.
This is banana republic capitalism at its worst. Political influence, rather than the law, dictates the rights of the parties. When some of the secured creditors refused to be intimidated, Obama libeled them in the press, saying, outrageously, "I don't stand with those who held out when everyone else is making sacrifices." Actually, under Obama's plan the politically favored parties, principally the UAW, will benefit--will steal money, to put it crudely--from the parties who held out. Those parties call themselves the "non-TARP lenders."

1 comment:

yukio ngaby said...

It's funny... a lot of people I knew would shake their heads and arrogantly wonder how "poor" and "ignorant" countries could just try to have the government run everything and redistribute wealth in the past-- like Uganda or Zimbabwe or Argentina. I mean even now, they probably haven't made the connection.