RON HART: Government motors

“It's crazy what's going on. General Motors, bankrupt. Biggest corporation in the world and now they still want money. They still want billions more bailout money. I think I speak for all Americans when I say, 'You want more money? Wait here while I talk to the manager. I'll be right back." --David Letterman

In a 2008 column I begged the government not to bail out GM in favor of letting the inevitable bankruptcy take place. The title was (Dis) Union: Kicking the can down the road. Sadly, that is what they did, and now after less than a year later and more than $65 billion of our wasted taxpayer money (the 50 percent of you greedy folks who work and pay taxes should be mad) GM filed for Chapter 11 bankruptcy.

Now that we taxpayers own GM, shouldn't we all get a company car?

Make no mistake, this is not an “investment” by the government, it is a political operation run out of the West Wing of the White House to protect unions. GM was no longer a car manufacturer, but rather a union-ravaged dinosaur, there only for the benefits of union members.

In the column, I reminded southerners that the fall of GM would be good for the south where low tax, non-union states have attracted more sensible foreign car companies like Kia, Toyota, Nissan, Mercedes and Hyundai.

What was the necessity of saving GM? Was our world irreparable damaged when we lost the AMC Pacer to financial ruin? In fact financial ruin can be quite cleansing. It has kept Michael Jackson out of the United States for three years now and might soon rid us of Donald Trump again.

As Dennis Berman noted in his June 4th Wall Street Journal article “Magic Act: Conjuring Up a Profit at GM,” the Obama administration will play games with the real investment in GM to show a profit by manipulating the bankruptcy. GM's debt, even though we have $65 bil in it, will be cut from $73 billion to $17 billion. Even finance subsidiary GMAC will get government backing allowing them to issue debt at 2.2 percent while Ford, a company relatively well-managed, has to pay 8 percent for money. It all goes to the mantra of government: No good deed goes unpunished.

And what happens to all those debt holders and dopes willing to entrust their money with the man Obama has in charge of this — a 31 year-old never employed in a business? They will get pennies on the dollar with the rule changes, and will be forced to convert senior debt to some worthless equity ownership position in GM. It is the same way my great-great-great-great grandfather Beauregard Hart was able to parley his lending to the Rebel army into a very large stake in the Confederate States of America.

We know what Obama is getting with this money — an empowered union that will back him when he runs in 2012 — but what are we getting? The Globe and Mail in Canada estimates that it will cost taxpayers $1.4 million per job saved. Had the free-market been left to be free, it would have cost us nothing to “save” these jobs. In fact one of the most compelling things for tax payers about a “free-market” is that it is free.

In absence of government intervention, GM would have gone into bankruptcy, like Delta Airlines and others did when they filed, keeping employees and operating. The reason Obama did not want this to happen is that in bankruptcy, the company can reject contracts and leases. The sweet UAW contract, which is the main cause of GM's demise, would be adjusted to fair market value. And “fair market” is nothing the liberals want any part of anymore. If only we had had a wise Latina woman on the board who could have used the richness of her experiences to make better decisions than the white males.

With the Democrats now running the car companies, look for quite a fall lineup of cars. My guess is that you will like the GM two-cylinder Geithner Midget. It veers hard to the left for no good reason, pays no taxes, blocks Rush Limbaugh on the radio and shows no remorse for past bad driving.

Ron Hart is a Southern libertarian columnist who writes a weekly column about politics and life. His E-mail address is RevRon10@aol.com