Posts Tagged ‘Sheldon Richman’

Obama Imposes Suicide-Pact Bankruptcy On Chrysler

April 24, 2009

The government is preparing the way for a “Dr. Kevorkian”-style bankruptcy for Chrysler.  A couple of paragraphs from the New York Times story should suffice:

U.S. Is Said to Push Chrysler to Prepare for Chapter 11

DETROIT — The Treasury Department is directing Chrysler to prepare a Chapter 11 bankruptcy filing that could come as soon as next week, people with direct knowledge of the action said Thursday.

The Treasury has an agreement in principle with the United Automobile Workers union, whose members’ pensions and retiree health care benefits would be protected as a condition of the bankruptcy filing, said these people, who asked for anonymity because they were not authorized to discuss the case.

You know, I’m old enough to remember a time way, way back when businesses were actually allowed to attend to their own financial affairs.

And they’ve got a guy who was either too dishonest or too stupid to pay his own tax bill organizing the thing: “Turbo Tax Tim” Geithner.

That’s bad enough, but then the snowball starts rolling straight to hell.

The government isn’t making its arrangements with Chrysler; it is rather making them with the United Auto Workers, and then imposing the conditions onto Chrysler.

This is tantamount to saying that Chrysler will never come out of bankruptcy, given the fact that the company needs to be able to escape its legacy costs if it is to ever have any chance of ever being viable.

Would Italian Fiat want this gold-plated turd?  Not very likely.  The Obama administration’s kissy-kiss with the UAW on a bankruptcy deal (and who ever would have seen THAT coming) is frankly akin to a bridal consultant pushing a bride-to-be to gain 500 pounds and have her face chewed off by a deranged chimpanzee in order to prepare her for her nuptials.  The bridal consultant, the chimp, and the bride; the Obama administration, the UAW, and the company: neither situation is going to end well.

Realize this: Obams imposing a suicide pack onto Chrysler.  There is no way the company will be able to attract private investment as long as the unions get to dictate terms.  And realize this: the green cars that the Obama administration wants to impose on the American auto industry aren’t profitable.  Which is why no American money wants anything to do with Barack Hussein’s GM or Chrysler (and very soon Ford).  That leaves us hoping that some foreign country’s investors are more stupid than ours are.

This is nothing less than a suicide pact.  There’s a spaceship hidden behind big labor’s version of the Hale-Bopp comet, and the Obama administration wants Chrysler and GM to prepare to board.

The NY Times article continues:

The only major question that remains unresolved is what happens to Chrysler’s lenders, who hold $6.9 billion in company debt. The government’s most recent offer, presented Wednesday, would give the company’s lenders about 22 cents on the dollar, or $1.5 billion, and a 5 percent equity stake in a reorganized Chrysler. Earlier this week, a steering committee of the lenders proposed that they receive 65 cents on the dollar, or $4.5 billion, and a 40 percent equity stake.

If no agreement is reached between the government and Chrysler’s lenders, a nasty legal fight could emerge in bankruptcy. The creditors’ claims are backed by most of the company’s collateral, including plants, brands and equipment, and the senior lenders will argue that they have first claim on those assets — even over and above the government’s debt….

Some analysts questioned whether the Treasury’s steps to prepare a bankruptcy case were an effort to put more pressure on lenders, with which it has exchanged proposals meant to reduce Chrysler’s debt. Chrysler faces an April 30 deadline from the Treasury, while G.M. faces a June 1 deadline in its own efforts to draft a new restructuring plan.

Let me put the first sentence of the last paragraph another way: “Some analysts questioned whether the father-in-law’s steps to prepare a shotgun wedding was an effort to put more pressure on the boyfriend…

This is an administration that is clearly hungry for power, and which clearly intends to use that power for political purposes.  Why won’t they allow banks to repay bailout money?  They want to be able to control the banks, and thereby control the banks lending policies.

As the Wall Street Journal’s Stuart Varney puts it:

Think about it: If Rick Wagoner can be fired and compact cars can be mandated, why can’t a bank with a vault full of TARP money be told where to lend? And since politics drives this administration, why can’t special loans and terms be offered to favored constituents, favored industries, or even favored regions? Our prosperity has never been based on the political allocation of credit — until now.

Obama is paying unions back for supporting his presidency by putting the UAW at the head of the line in bankruptcy negotiations.  It is nothing short of political patronage.  Do you seriously think there’s even a chance that he won’t similarly use his power over the banking industry to impose liberal policies and reward liberal constituents?

Obama shares a number of the underlying characteristics that would tend to define one as a fascist, as Jonah Goldberg saw at least as far back as February of 2008.  But we’re not talking about mere “underlying characteristics” or tendencies anymore.  We’re talking about overt fascism.  Sheldon Richman defined fascism as follows:

Where socialism sought totalitarian control of a society’s economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners. Where socialism nationalized property explicitly, fascism did so implicitly, by requiring owners to use their property in the “national interest”–that is, as the autocratic authority conceived it. (Nevertheless, a few industries were operated by the state.) Where socialism abolished all market relations outright, fascism left the appearance of market relations while planning all economic activities. Where socialism abolished money and prices, fascism controlled the monetary system and set all prices and wages politically. In doing all this, fascism denatured the marketplace. Entrepreneurship was abolished. State ministries, rather than consumers, determined what was produced and under what conditions.

What the hell else are you going to call what Obama is doing but fascism?

Fascism came out of the political left; and liberals are leading us right back into a fascist hell all over again.

Which leads to the last observation: the suicide-pact that the Obama adminstration is forcing onto Chrysler is a microcosm for the suicide-pact that our society and our country are going to experience.  This government takeover of the American way of life won’t just result in a fascistic redefinition of America.  The federal government and federal reserve have committed over $12.8 TRILLION so far in bailouts and stimulus.  And we’re nowhere near done with this madness, because our leaders believe they can sepnd their way out of debt.  Massive inflation – and a death spiral – will necessarily follow.