Throwing money down a rat hole
Posted by sanityinjection on June 1, 2009
If you loaned a failing company $20 billion and they didn’t pay it back, what would you do? (Besides kill yourself or take on a fifth job to make ends meet.) Well, if you are the Obama Administration, you’d declare like Victor Kiam, “I liked it so much, I bought the company!” and promptly promise them $30 billion more.
Now if a loan officer for a bank did that, they’d not only be fired by the Board of Directors but prosecuted as well. In this case, the loan officer is Barack Obama, the failing company is GM, and we, the voters and taxpayers of America, are the Board of Directors.
Obama swears that just because the federal government will now own 60% of GM when it emerges from bankruptcy, doesn’t mean he’s going to run GM’s day-to-day operations. Instead, the guy he handpicked to be GM’s new CEO will do that. Honestly, I don’t know which is more frightening for my invested tax dollars to depend on: federal bureaucrats who lack the aptitude to make the right decisions to make GM profitable, or the idiots in GM’s management group that have proven for years they lack it.
Obama says, “Don’t worry, it’ll work out fine, just like Chrysler.” Well, Chrysler got sold to Fiat, and the Feds get 10% of that company too. Meanwhile, everyone agrees Chrysler was in better shape than GM to begin with. What we should have done, of course, was to let GM go bankrupt last year instead of paying $20 billion to stave off the inevitable.
House Republican Leader John Boehner’s words sum it up pretty well:
“The only thing it makes clear is that the government is firmly in the business of running companies using taxpayer dollars. Does anyone really believe that politicians and bureaucrats in Washington can successfully steer a multinational corporation to economic viability? It’s time for the administration to fully explain what the exit strategy is to get the U.S. government out of the board room once and for all.”
Of course, the Administration can’t do that, because they haven’t got an exit strategy.
Incidentally, I did learn one asnwer to a question that has puzzled me. With all the talk about the various GM brand names that will be discontinued (Saturn, Hummer etc.) I was puzzled as to why Buick was to be spared from the chopping block, given dismal domestic sales and the lack of a niche market in the US. According to my radio this morning, it turns out that Buick is huge in China, having rather recently grabbed significant market share away from Volkswagen there. In fact, GM’s Chinese sales have been critical in keeping the company afloat as long as it has. So for my older readers: Any idea what the Chinese character is for “porthole”?