President Barack Obama insists he doesn't want to run the domestic auto industry -- and we should all be thankful for that.It's about Obama. Obama "rejected", "set" the standard and "challenged" are all Obama's words. Over what did he do all this?
But his actions speak differently -- and we should all be worried.
"... I rejected the original restructuring plan" that Chrysler LLC submitted for government loans, he said April 30 in announcing his decision to force Chrysler into bankruptcy. "... And the standard I set was high -- I challenged them to design a plan ..."
That's a lot of self promotion and involvement from a guy who doesn't want to control the companies.
The president found a scapegoat in the hedge funds that balked at the government's "offer" to take pennies on the dollar for their secured investmentThis small group of speculators, who had a superior claim did not want to take the 29 cents on the dollar Obama decided they should take. They had the audacity to ask for 50 cents on the dollar. They didn't refuse to take cuts. They just didn't think their shareholders should be mugged. After all that's what Hedge Fund Managers are paid to do - Make money for the shareholders!! In addition, (while I admit that I am not an Lawyer, as I understand it) it is no small legal matter that what Obama wanted them to do is re-write Contract Law. The minority loanholders, represent about 10% of the secured debt. A very small amount.
"... It was unacceptable to let a small group of speculators endanger Chrysler's future by refusing to sacrifice like everyone else," he said.
Pardon me while I puke.
You mean to tell me that the president, who has authorized more than $19 billion in cash to the auto companies, with much of it likely never to be repaid, was willing to force Chrysler into bankruptcy over less than a billion bucks?Exactly!!!
When you're doling out dump trucks full of cash, another Ram pickup full doesn't break the government's back.
Make no mistake: The president had this outcome in mind all along. He'll force that action on GM, too.This is a warning to all. President Obama says "He will have his way". Those of us old enough to remember President Nixon, remember another President who thought he was King.
All the while bashing Detroit for not being Toyota.
"I don't know how to create an affordable, well-designed plug-in hybrid. But I know that, if the Japanese can design an affordable, well-designed hybrid, then, doggone it, the American people should be able to do the same," he said during his 100-days-in-office speech. "So my job is to ask the auto industry: Why is it you guys can't do this?"