You are about to become the proud owner of a controlling interest in General Motors–well, you and tens of millions of fellow taxpayers, anyway. A deal has been struck that tries to keep GM out of bankruptcy. As I understand it, the deal is contingent on GM providing a turnaround plan that is satisfactory to its new owners–us–by June 1.
What is going on in this country? The government is about to take over GM in a plan that completely screws private bondholders and favors the unions. Get this: The GM bondholders own $27 billion and they’re getting 10 percent of the common stock in an expected exchange. And the UAW owns $10 billion of the bonds and they’re getting 40 percent of the stock.
I have one question. How is this transfer of wealth different from the Bolsheviks seizing a “bourgeois” business to give it to “the proletariat”? The legal formalities differ, and the communists were upfront and proud of what they did, whereas American politicians must work in lies and euphemisms that they know a sympathetic media will not examine too closely.
Maria Bartiromo was reporting on the automakers’ situation this morning and she mentioned another ominous aspect. Once the government takes over GM, the other two automakers will then be competing against the government. GM will have a bottomless well of money, get better terms for financing, etc.
What happened to private education once the government started running the public education racket? Who can compete with a company that can print its own money?
Consider also that the UAW is going wind up owning 55% of Chrysler. Imagine being Ford and having to negotiate a labor contract with a union that is also your competitor.