Obama's Corporate Welfare Has a Socialist Price-tag
3/30/2009
In the good money after bad category: the Obama Administration has chosen to tell General Motors "enough is enough" and instead of granting them another $30 Billion in loans, will only support them with enough money to last them another 60 days to get their house in order. I guess we should be grateful for small favors.
This move comes on the heels of the initial $25 Billion they and Chrysler were given in January and February.
In this deal Chrysler gets an additional $6 Billion to allow them to complete their merger with Italian automotive giant FIAT.
Here's part of the story as reported by the New York Post with a link to the story:
TODAY'S TARGET: DETROITJudging from the rate at which GM burned through the initial $17.4 Billion they were given back in January, the taxpayer will be tapped for another $10-12 Billion over that 60 days. For those of you keeping score the total in taxpayer money given to these two dinosaurs is $41 Billion.
WHITE HOUSE GETS TOUGH
By PAUL THARP
Last updated: 3:32 am
March 30, 2009
The White House is playing serious hardball for the first time with its recovery cash.
The Obama administration auto task force today rejected the turnaround plans of General Motors and Chrysler and warned both could be put through bankruptcy to slash debts.
The announcement by the White House auto panel headed by former investment banker Steve Rattner marked a stunning reversal for management at both automakers and for GM investors and creditors who had bet on a softer line.
That's a heck of a lot of money spent by your government to prop up two corporations "too large to fail." Of course that isn't taking into consideration what we will be asked to provide to GM once they have finished their "restructuring." You can bet taxpayers will be tapped for another $10-20 Billion once GM has completed its restructuring.
As I stated in a previous editorial, one of the hazards of this great economic system we enjoy is that a business succeeds or fails based on its ability to make a profit. In our capitalist system, no corporation should be considered "too large to fail." If these two automobile manufacturers had been allowed to fail back in January, the American taxpayer would have been saved that wasted $41+ Billion.
That's a pretty high price for the taxpayer to pay for a sop to the United Auto Workers Union. Added to the money (roughly $180 Billion) given to AIG because they too were "too big to fail," the taxpayers have been soaked for almost a quarter of a Trillion dollars...just to prop up three corporations.
For the Obama Administration, this is a coup. They get a stake in running these large "private" corporations, which is precisely what they wanted. This is the death of capitalism by a thousand cuts.
Creeping socialism is still socialism.
The myth, largely promulgated by those on the Left, is that life can be lived without suffering if only we will let the government run everything. This myth leads those unaware to make a deal with a devil. In exchange for this mythical state of no suffering, all we need to do is surrender more and more of our freedom.
This socio-economic model is the antithesis of the model left to us by our Founding Fathers and which built this great nation. It is also a lie. Socialism isn't an economic model which eliminates suffering; it is a model which forces all to endure equal misery.
Unlike capitalist model in which each succeeds or fails in proportion to their abilities and the effort they put forth, socialism places the burdens of those unwilling to work on the backs of those who seek to better their lives. It penalizes initiative and acts as a disincentive for hard work. In other words, the chaff is thrown in with the wheat and all are made to consume the resulting product.
These corporations should have been allowed to fail. The argument that too many jobs would be lost was a straw man argument. When corporations fail, others spring up to take their places. Those with superior business models can then step in and provide employment to those who lost their jobs.
The law also provides bankruptcy protections for those corporations that choose to restructure, so GM and Chrysler could have-should have-declared bankruptcy, restructured and come out leaner and meaner, with a business model that would have lead them to success.
It was the disproportionate power the unions wield over the Democrat Party and politicians of both parties in the manufacturing states of the "rust belt" that prevented our economy from functioning as it should have, but it is the American taxpayer who was forced to pay for this folly.
You can expect more corporations facing financial difficulties to crawl into Washington DC on the hands and knees begging for taxpayer alms as a result of these actions. It seems corporate executives are as averse to pain as are Liberals.
So much for the myth of Corporate Republicans. The executives of these companies largely voted for Democrats because they knew they could count on them to prevent their companies from failing...at least until they could get their fortunes secured.
Well GM Chairman and CEO Rick Wagoner has now been forced into retirement for his efforts and the taxpayer is on the hook for his failures. I'm certain he's crying all the way to the bank.
Think of this; had GM and the unions simply sucked it up and gone through bankruptcy back in January, they would be well on their way towards finishing restructuring and making a profit by now and the American taxpayers would be $40 Billion better off.
Long Live Our American Republic!!!!










