I have no problem if the federal government LENDS money to GM. It is a big deal, but a reasonable argument can be made for it. That isn't what happened.
What DID happen was roughly as follows:
a) Obama said, "We've got money to get you out of this mess, but you're going to do it my way."
b) Automakers said, "Okay, we're listening."
c) Obama said, "You'll go into Chapter 11. The lenders will agree to let you off the hook, because we're going to make them an offer they don't refuse."
d) Obama went to the lenders, who HAPPENED to be the same banks that were already on the hook for TARP money. Obama said, "Here's the deal. You're going to cancel GM's debt in the Chapter 11, and you're going to LIKE it. By the way, don't forget those billions in TARP money you owe us."
e) The few creditors who were NOT on the hook for TARP money didn't agree, but there weren't enough of them to do anything about it.
f) New stock was issued to the US for the money it gave GM, and to the UAW for no reason other than political payoff.
g) GM comes out the other side with UAW contracts that GUARANTEE it will be back in bankruptcy court.
This was, by any reasonable measure, EXTORTION. It was handing GM a contract and having Luca Brasi hold a gun to their heads and tell them either their signature or their brains would be on the paper. True story. |
