Sword and Sextant

I’m not going to endorse the entirety of his claims and issues, but there are a couple salient points within his statement.

The bankruptcy and the GM restructuring plan are the product of a secretive, unaccountable, Wall Street-minded government task force that assumed power because of a Congressional abdication of historic magnitude. By all rights, the restructuring plan should have been submitted to Congress for deliberative review and decision.

As is par for the course in the Obama Fearministration, this decision is being carried out with little oversight, no input or hearings on the Hill, and zero public discourse of any kind. In short, Obama is doing what he thinks is best for us, but rushing it so we can’t determine if we think its what is best for us. Also, our newly powerless legislature has made no attempt to, you know, protect our interests. Are they so afraid of the President’s personal popularity that they would lay down and stay out of the way, even when Obama’s auto efforts have already gone so awry?

America’s manufacturing base will be further eroded, as GM pursues its Grand China Strategy — increasing manufacturing outside of the United States, and increasingly from China, for import back into the United States. Unanswered questions persist about how GM’s valuable operations in China, and unrepatriated profits, will be treated in bankruptcy, or excluded from bankruptcy.

This is another way to say that GM will run to China anyway because Obama has strayed from fixing the major cost destroying profitability in US operations, which is the union costs via pensions and healthcare benefits that are unsustainable. By giving the UAW both all the breathing room they need, and a stake in the firm, Obama will scare more business and jobs from the country than any other course of action. This will hurt the employees in the short and long run, but help the union leaders for now. Interesting how the union is the only continual beneficiary of his policies aside from the executive branch of our government, isn’t it?

This is out of order, but this is the big one:

For GM’s voiceless owners — the common shareholders — it is a wipeout.

Regular people are getting shafted here. The unsecured loans given to Chrysler and GM are both higher priority than the union, according to bankruptcy law, but they are being pushed to the back of the line by Obama and his team. These are retirement plans, stock portfolios, college funds, and mutual funds of many kinds. Its easy to demean these lenders, represented as they are, as greedy rich guys vying for an unfair shake, but they represent the little guys, and the dangerous practice of toying with people’s investments can and will shake confidence in the fidelty and honesty of our government with regard to the market. This path has hazardous ramifications, and Obama should be very careful to preserve good faith in our markets.