Anytime we listen to Barack Obama speak, whether it is the State of the Union address or a press conference we should never forget that the man couldn’t get most of what he wants through his own Democrat Congress in two years before the GOP took the House. We should never forget that Democrats then, refused to compromise with the minority Republicans, and they did so in dishonorable ways – example: completely removing Republicans from health care conferences – a very big deal. So if Obama couldn’t get his oil and gas industry subsidies zeroed then, he won’t get them now due solely to the way he runs his ship. Republicans have been calling for tax reform for decades. Democrats have to sit down at the table. While you’ll find a good look at Obama’s State of the Union absurdities everywhere on the Internet, I want to talk about his remarks about General Motors, the shareholders who lost everything and GM’s latest donations to the “arts.”
Obama’s claim that General Motors is once again the world’s No. 1 automotive maker seems to be true, but had the President wanted to be honest with the American people, he would have acknowledged that they are still government owned by over half in some accounts and by one-third in others. He would have exposed the company’s grandiose announcement that they had paid back their TARP funds in full, ahead of schedule and with interest. Lies. GM paid back $6.7 BILLION from the $6.7 BILLION they were given in cash in the form of a escrow account. To be clear, after they repaid the $6.7 BILLION, the escrow account was empty. They are still paying-back the remainder of the $50 BILLION TARP funds.
Still on the government dole, with 30-60% percent government ownership (500 MILLION shares – or more depending on who you believe), and still plying taxpayer monies into the troubled Chevy Volt, General Motors has once again began “donating” to charities within the arts community:
[February 29, 2011]…now that the industry is back on its feet again, it has resumed giving, recently extending grants to artistic organizations, including $125,000 to Michigan Opera Theatre, $75,000 to Mosaic Youth Theatre and $25,000 to the Charles H. Wright Museum of African American History.
What’s a few hundred thousand here and there, when General Motors stockholders lost BILLIONS, including jobs and retirements funds? The U.S. Treasury, which, back then, had already loaned GM $19.4 billion, would get 72.5 percent of the new company’s stock and provide $30 billion in additional financing to keep the new GM operating under bankruptcy protection….
GM’s existing shareholders will probably lose everything. Source CBS
After leaving shareholders with nothing back then, and closing dealerships (in large share those not considered Democrat supporters), GM issued an IPO to begin the process all over again. The IPO reduced Government ownership from 60% at that time [November 2010] to 40%.
Still, bond holders and shareholders (like my Mother) lost everything, while the company graciously donates to theater arts.
Since G.M. was 80 billion dollars in debt, funds to redistribute to stockholders were nonexistent. If there was any hope whatsoever to salvage funds for stockholders, G.M.’s bankruptcy lawyers and consultants have gobbled it up—to date, G.M. has spent $90 million on these services, expected to reach $1.17 billion before the reorganization is complete—significantly higher than the lawyer charges involved in Lehman Brothers representation. This considerable chunk of the $50 billion federal bankruptcy bailout is sure to have stockholders grumbling. Unfortunately, the federal government has no intention to reimburse shareholders, even those who lost big with G.M. stocks in their I.R.A. accounts.
The real loss is, undoubtedly, for consumers. It is all too likely that a G.M. worker counted on company shares in his or her I.R.A. account to help them through their senior years, funds that dissolved overnight….Source Macy Bankruptcy Law
Until shareholders are repaid, not a dime should go to any charity – not a theater, not a school, not a medical outreach, and certainly not a political donation of any kind. In September 2010, Government Motors resumed political donations, giving $91,000 evenly split among Democrats and Republicans, with Michigan lawmakers receiving the largest portion. A GM spokesman said they could “no longer afford to sit on the sidelines.” What does that say about the politician taking the money (from the taxpayer in essence) while stockholders lost everything?
- Sen. Debbie Stabenow: $5000
- Sen. Chuck Schumer: $5000
- Sen. Sherrod Brown: $2000
- Sen. Amy Klobuchar: $1000
- Sen. Ron Wyden: $1000
Senate Democrat Subtotal: $14,000
- Candidate for Missouri Senate: Rep. Roy Blunt: $5000
- Candidate for Ohio Senate: Rob Portman: $5000
- Candidate for Indiana Senate: Dan Coats: $5000
Senate Republican Subtotal: $15,000
SENATE TOTAL: $29,000
- Majority Whip, Rep. James Clyburn: $1000
- Michigan Rep. Gary Peters: $2000
- Michigan Rep. John Dingell: $5000
- Michigan Rep. Carolyn Kilpatrick: $1000
House Democrat Subtotal: $9,000
- Republican Whip, Rep. Eric Cantor: $2000
- NRCC Chair, Rep. Pete Sessions: $2000
- Michigan Rep (R), Rep. Dave Camp: $5000
House Republican Subtotal: $9,000
HOUSE TOTAL: $18,000
- Candidate for New York Governor, Attorney General Andrew Cuomo: $3500
- Candidate for Kansas Governor, Sen. Sam Brownback: $2000
As this article says, why does GM feel they need a voice in Congress when Government owns them (at least 60 percent at the time)? It’s called Pay to Play. Every Republican on this list must return the donation and insist it be paid (no matter how small the payment is) back to a stockholder. Better yet, find a stockholder and write the check yourself.
The Chevy Volt and Government Motors:
Let’s say you’re the biggest owner of a global auto company. You take the company’s flagship new vehicle, twist it, crash it, poke it and leave it outside in the elements for weeks until its battery catches fire. Then you generate a storm of publicity and watch the share price and the value of your ownership stake decline.
This, essentially, is what the United States has done to General Motors and its signature new vehicle, the Chevy Volt.
If it wasn’t already obvious, at least one reason the government shouldn’t own controlling stakes in major companies is that ownership and regulation are inherently incompatible. This week, the Republican presidential candidate Mitt Romney defended his tenure as head of the private equity firm Bain Capital by comparing Bain’s role in troubled companies to the government’s rescue of G.M.
Rest assured that if Bain Capital owned G.M., it would not be subjecting the Volt to severe safety tests and trumpeting the negative results.
More than a year after G.M.’s return to public ownership, the government still owns just less than 30 percent of the company, or about 500 million shares. Of course, the government must hold G.M. to the same strict safety standards it applies to all auto manufacturers. The National Highway Traffic Safety Administration, or N.H.T.S.A., said in late November that it would assess the risk of fire in Volts after two incidents of fires following crash tests. Source New York Times January 14, 2012 – read more here.
It’s interesting to note that the New York Times reported this month that government ownership was reduced to 30 percent, when in November 2010 it was reported at 60 percent.
General Motors, is just one deception in Obama’s State of the Union address. The Lonely Conservative notes:
He didn’t just stretch the truth about health care. He stretched the truth, fantasied or lied on everything from war spending, green energy, taxes, immigration and more. The one thing he was totally honest about was his intention to continue to work around Congress any chance he gets.
Which brings us to the Hermanator. He was everything Barack Obama was not: concise, coherent, factual, and recognizably American in his thinking. What shone through his remarks was a lack of bitterness at his despicable treatment from the media, and a sincere devotion to the country and improving the situation. Truly a blessing of an American.