The most appalling, egregious move on Obama’s part has been in the treatment of Chrylser and GM’s bondholders. The recent wheeling and dealing (or however you say it in Austrian) going on with the GM bondholders give us an even clearer picture of what occurred with Chrysler and how Obama uses and operates the government. While the media turns their heads. While the media spins Obama’s garbage. Obama is running the government like a mafia godfather using his executive power to rob ordinary citizens. It is Obama’s most recent war in the name of fairness that brings hard evidence to light on how morally bankrupt Obama truly has become.
There are three undisputable facts that have been made evident by Chrysler and GM restructuring plans. First, Obama is willing to reward political cronies at all cost. Second, Obama has no qualms gambling with the US economy to do so. Third, Obama has no respect for the rule of law or any American who operates outside of the political groups who supports him.
To start out, I must expose the standard media template that is being irresponsibly repeated in the media like a broken record. We have been spun a host of stories on how the bondholders are greedy and trying to get more money from the government than they deserve. Most importantly, the actions of the bondholders are going to send the country into depression.
The problem with the coverage is this; why isn’t anyone questioning Obama’s leadership in the matter? According to the media and everyone in Obama’s administration, this is the only possible plan that could be hatched from his think tank. All the while, no one really questions why the UAW is making out so sweet on the deal. Obama offered the UAW 17.5% GM and 45% of Chrysler. This offer was not made to save jobs, to save wages, but to ensure the safety of the UAW worker’s pension, while at the same time giving control of the companies to political allies. As I’ve pointed out before, the UAW supported Obama big time with campaign contributions and with paid commercials. Why give the bondholders the short end of the stick? As I’ve also mentioned in previous posts, the bondholders were not involved in management decisions and they do not hold stock like an investor does. The purpose of a bond is to be safe in that bondholders will not lose their investment. Bondholders bought automaker debt, which was to be secured by first lien status against the company’s assets.
Let’s take a look at these evil bondholders who must be robbed so that the UAW can have a large interest in owning the automakers. There is Jim Modica. He and his wife are retirees who have all their life savings in GM bonds a total of $700,000. They live off of the yearly interest of $80,000. Normally, this is a good and secure investment as they would be able to recoup their investment in bankruptcy. That was until Obama got involved. Now Jim may loose his entire life savings while Obama tramples on contract law like he did with Chrysler. There is Chris Crowe a 50 year old home inspector who had bought bonds to pay for his son’s education and upcoming property taxes. Once again, a good safe investment until Obama decided to reward his UAW cronies. Obama has offered these bondholders 10% and rumored today 15% of GM stock, which is worthless. Sorry Jim and Chris, if only you ran the UAW Obama would have broken the law on your behalf.
What is more reckless is that Obama is gambling on the fact that his mafia style politics will be able to overcome all bondholder opposition. His gambling chip is nothing less than the US economy. There is a chance Chrysler’s bankruptcy may take a turn into chapter 7 liquidation as a federal judge listens to arguments and complaints from the Indiana State Treasurer who is looking to recoup losses to the state road fund and the teachers/police pension funds. Those funds lost millions when Obama robbed the state in the Chrysler chapter 11. It may be unlikely that this judge will rule in Indiana’s favor, even though the law of the land is on Indiana’s side. What happens if the case goes to the Supreme Court? I find it unlikely that they would side with Obama on this issue. As the debate rages many believe Fiat will withdraw if the bankruptcy is not concluded by June 15th. With thousands of Chrysler jobs and the economy at stake, one must ask what Obama was gaining in his actions? Did the UAW have a legal claim higher than the State of Indiana? No! Would it have been against the law if the Chrysler pensions were given the bondholders deal in reverse? No! Is what Obama did against the law and therefore robbery? Yes!
The bondholders are not only robbed, but many were also bullied. Three people from three different hedge funds claimed that they were bullied by Obama’s Car Czar. Not hard to believe when the following occurred after the AIG bonuses:
"Arrayed around a long mahogany table in the White House state dining room last week, the CEOs of the most powerful financial institutions in the world offered several explanations for paying high salaries to their employees — and, by extension, to themselves.
“These are complicated companies,” one CEO said. Offered another: “We’re competing for talent on an international market.” But President Barack Obama wasn’t in a mood to hear them out. He stopped the conversation and offered a blunt reminder of the public’s reaction to such explanations. “Be careful how you make those statements, gentlemen. The public isn’t buying that.” “My administration,” the president added, “is the only thing between you and the pitchforks.”
This is a clear threat from the President of the US against his own citizens.
Threats are nothing new to this President. He threatened to rescind stimulus money if Arnold lowered Union employee wages in the state. It’s rare the Obama administration makes any policy without a threat.
Rewarding political allies is also nothing new as there is mounting evidence that the Chrysler dealership closing were also politically motivated.
Where is the media? Where is the outrage from the left? Those who had hearings over Valerie Plame's ruined carreer and those who cheered over the prosecution of Scooter Libby. Where are the investigations? We had months of media coverage and hearings regarding Plame. How many months of hearings and coverage over the firing of a few dozen federal prosecutors? How much more should we investigate the robbing of more than a 1,000 Chrysler and GM bondholders?
The following Time article is a perfect example of the Obama spinning, propaganda dribble coming out of the media on the automaker’s restructuring. It paints those opposing Obama as boardroom cronies, plays up Obama’s risk taking, car board’s brilliance, and all those hard sacrifices being taken by the UAW. It also tries to promote the bankruptcy of Chrysler as all part of the grand plan. The article also down plays the contract law being broken by Obama, the bullying of the Treasury Department, Obama's hand in making these automakers recovery more difficult as a result of his new emmision standards, the political relationship with the UAW and shrugs at the losses being suffered from soon to be closed dealerships. The author calls the autoworkers underdogs and in the next paragraph tells us the days of “mom and pop” dealerships are over. At the same time fails to explain why the bondholders had to go to the whipping post instead of the UAW. Why indeed? If Obama is going to break contract law, why do it for the UAW instead of the bondholders? Don't kid yourself Obama Media, this is all politics.
Left Coast Rebel has an excellent post giving another example of the mafia style government Obama is running. Check it out here.