Those headlines would deserve equal credit as to newsworthiness in a sane world. But over the last 18 months or so since the current administration took the reins of power such news is heralded as the most wonderous of events. I watched some of the “ceremony” at GM this morning as they breathlessly announced their repayment of 5.8 billion to the US and Canadian governments as though that was some stupendous achievement. There was lots of hoopla and all that was lacking was the confetti and balloons. All that happened in reality was that the government paid itself. Not one darn bit different than if you wrote a check to yourself out of your checking account and then deposited it right back.
The fact of the matter is that Government, Inc. owns GM. It is merely paying itself. The fact that they have been able to make a profit should come as no surprise to anyone with an IQ higher than weeds. You could take almost any major company from the Standard and Poors 500 that had lots of debt and do the same thing as occurred with GM. I mean the “new” GM came out of the government mandated Chapter 11 with nothing but assets. All its debts were left behind with the old GM. Is it remarkable at all that given that scenario it has made a profit? The surprise would have been if it made only a small profit.
Don’t forget that in addition to the 5.8 billion in direct loans during the Chapter 11 that GM had a capital infusion of about 50 billion. Give me a company with no debt and a fresh 50 billion to play with and I will guarantee you a profit even if I was selling buggy whips. Also don’t forget that GMAC its partner in crime also got I believe it was over 40 billion in Government funds to continue its financing arrangement. This was conveniently done under TARP when GMAC during the holidays of ’08 was converted into a “financial” institution with a bank charter from the Feds.
The power brokers and czars in Washington must think we really have a short attention span or they are contemptuous of our ability to reason. Speaking of czars, you have surely noticed that Mr. Rattner who lead the government team doing all the negotiating with creditors of GM has run into his own buzz saw of accusations recently. Really nice to know we had such an honorable fellow carefully selected by the White House to run that show and ram through the Chapter 11 of GM. This entire situation is another example of the danger of the too big to fail syndrome that has consumed Washington since the fall of ’08. The financial regulations being proposed by Dodd, of Countrywide fame, does not solve this problem but only exacerbates it. Please read it for yourself. The fine print gives authority to bureaucrats appointed and funded by the politicians the say to determine who is a systemic risk and what should be done. It allows them to determine who will be paid and how. Worst of all it allows for unlimited government backing of the credit of a failing company. If it quacks like a bailout, walks like a bailout, it is a bailout regardless of the headline news and the disclaimers of Dodd. Geithner defends it so you know it must be a really bad idea.
Every time you buy a GM car or part you are supporting the gang in Washington. It is not a private company but a captive of government and in turn the auto unions which were the real raison d’etre behind the bailout of GM in the first place. I hate it that I can’t support them anymore. Years ago I loved my Suburban. Unfortunately they have become part of the problem with our economy and government and not any contribution to the solution or a better path for the country. The Democrats got themselves even more loyal ground troops for the political wars. They already had the overwhelming majority anyway but now they have tens of thousands of cadre to send out on the political warpath. Even better for them every GM car sold is nothing more than a political contribution for the largest political PAC supporting Democratic candidates there ever was.
The great pyramids in Egypt are quite something to behold. More remarkable is the preciseness of the engineering that was employed with only the most rudimentary of tools. They had no GPS or laser controlled measuring or surveying devices. Line of sight, plumb bobs and string and knowledge of basic geometry is what they worked with. The Great Pyramid near Assuan was about 150 yards high and was about 250 yards wide on each side of its base. Those blocks weighed a lot. There were 7 yards long and hand to be man-handled to the top. Amazingly, the engineers were so good with their limited tools that the mean error of the base line was only 6/10’s of an inch in length and 12 seconds in angle from a perfect square. I wonder if we could do that well today. http://www.olcranky.wordpress.com