Just a passing story on the economy in the midst of all the political news..
The Initial Public Offering (IPO) of stock for Government Motors was a huge bust, and the Feds were forced to sell a large block of shares it was holding as 'collateral' for the $85 billion GM bailout at a below break even price (otherwise known as a loss) of $33 per share. As I reported earlier, for taxpayers to break even the stock would have to rise to at least $52 and by some estimates as high as $103 — levels that would take years to achieve if they ever got there. The article linked claims the break even was $44.59 a share, which doesn't correspond to any rational data or sources I've seen, but why quibble?
This stock dumping - which might actually be against SEC rules if a private investor did it - pretty much means the American taxpayer will never fully recoup what it cost to gift GM to the UAW, screwing over the private equity holders in the process.
Of course it's not just the stock dumping. There's also that $45.4 billion dollar tax credit against future profits at the American taxpayer's expense given to them by the Obama Administration that could keep GM tax free for years.
Needless to say, some of the profits coming from the UAW's equity in Government Motors will be recycled straight into the Democrat party coffers as political donations.
Nice the way that works.
7 comments:
You have to love ' corporate socialism ' : the banks, the car companies, the trades unions ( particularly, the trades unions' strongmen ). Sigh ... the rest of us just pay, pay, pay. We created, during last October, a new contingency plan at our small business for a quick shutdown in anticipation of eventual equipment obsolescence ( it's very old equipment, & we refuse adamantly to go into debt in order to replace it ).
Meanwhile, our beloved state has just raised the taxes again. We are already marginal, but they look upon any business as a golden goose. In Aesop's tale, they killed the goose.
--dragon/dinosaur
In the case of California, the goose seems to be in the process of fleeing for more business hospitable climes.
From the Nov 2010 Cal election results ( & from reading your columns ), I could tell that there was ' something rotten in the state of Denmark ' , erm, I mean California ( Kalifornia ? ).
d/d
Indeed, to mix plays and borrow from the Bard's Richard III, this is the winter of our discontent.
That's especially apt with Jerry Brown and a solid slate of Leftist Democrats at the helm, and the new freedom granted them by the voters to create budgets with a simple majority, rather than the previous 2/3 which ensured at least some fiscal oversight.
Nice to have you around as always DD. You elevate the discussion.
Look deeper. Who benefitted from this act? We have the most corrupt administration in the history of our country. I find it hard to believe that any action involving money was not used to transfer wealth to one of Obama's friends. Maybe ACORN, maybe unions, maybe the mob, but someone was made wealthy by this. Look deeper, follow the money.
Hello Anonymous,
It's actually pretty easy to see who benefited.
Obama essentially gifted GM to the unions on the taxpayer's dime, if you know anything about this and how it went down. They received a premium price for their equity, ahead of the private stock holders who ended up with nothing.
There were no 'loans' per se,merely a government taking of private property without compensation.
The unions got money to shore up their pension funds and a huge $45 billion tax break from Obama on top of that that will ensure their 'investment' stays profitable...and Cicago-style, ensures that a sizeable amount of money will be kicked back in the form of contributions to Obama and the Democrats for some time, all at taxpayer expense.
Regards,
Rob
Your write: "Needess to say of the profits from the UAW's equity in Government Motors will be recycled straight into the Democrat party coffers as political donations. Nice the way that works."
Nice indeed, for the Democrats that is. Is there any thing the incoming House can do to put a stop to things like this? Unless they can put a stop to this with advantages like this there is simply no way the Republicans can have any hope of competeing with the Democrats. Essentially if these things are allowed to stand unchallenged we are well on the way to be a one party country and the Republican party will go extinct.
Frankly, I'm no big fan of Republicans but for our Republic to function properly we need at least two or more vibrant and healthy political parties. Having two or more political parties makes it easier to hold leaders accountable. The leaders of each political party will shine a lignt on the corrupt actions of the others. Also, at election time, the voters will have some degree of choice at election time.
If the Democrats are allowed to achieve one party rule, absolute power will corrupt absolutely and there will be no one to focus on Demcorat corruption. The same thing would apply if it were Republicans instead of Democrats who achieved one party rule but the Republicans don't have an unfair advantage like this. As such, there is no possibility of them achieving one party rule.
If this isn't stopped, the Republicans have no chance to compete. As such, they either need to do all they can to put a stop to this or they need to surrender and simply be done with it.
I think this would be a good job for the new RNC chair. Figure out a way to stop this practice. The survival of the Republican party and the Republic itself depends on it.
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