ELECTION 2012: IS THE GOVERNMENT ALLOWING OR AIDING GM IN COOKING THEIR BOOKS FOR POLITICAL REASONS?

Stephen Levine by Stephen Levine on July 11th, 2012

This is article 43 of 53 in the topic Bailouts

It appears that the Obama Administration and their democrat/Marxist fellow travelers will do or say anything to gain or maintain political power. But one must also question whether or not this effort extends to the manipulation of public financial indexes and reports published by federal agencies headed by hyper-partisan appointees?

How far will the Administration go to hid financial bad news relating to failed companies such as the defunct solar panel manufacturer Solyndra and other so-called green-initiative efforts that appear to destroy, rather than create jobs.

So I couldn’t help wondering about the headlines touting the increased vehicle sales at the partially-owned Government Motors (formerly General Motors before the Administration’s egregious disregard of established contract precedent involving bond holders.)

So while General Motors (still 32%-owned by the government) is reporting increased sales … we also find that government vehicle purchases may have substantially influenced the increase.

New York Daily News … “GM reported June US sales of 248,750 vehicles, up 16 percent from a year ago and the company’s highest monthly sales since September 2008.”

Detroit Free Press … “GM’s increase was helped by an increase in fleet sales. GM’s sales to fleet customers increased 36% in June while retail sales increased 7.9%.”

 National Legal and Policy Center … “It looks like General Motors will be throwing everything in but the kitchen sink to help fluff its second quarter earnings numbers. Taxpayers continue to help with the cause as President Obama campaigns on the “success” of GM following the manipulated bankruptcy process that cost taxpayers $50 billion and another $45 billion of tax credits gifted to GM to help protect powerful UAW interests. We now learn that government purchases of GM vehicles rose a whopping 79% in June.”

“One of GM’s past tricks to help fudge earnings numbers has been to stuff truck inventory channels. Old habits die hard at GM. According to a Bloomberg report, “GM said inventory of its full-size pickups, which will be refreshed next year, climbed to 238,194 at the end of June, a 135 days supply, up from 116 days at the end of May.” 135 days supply is huge, the accepted norm is a 60 day supply. The trick here is that GM records revenue when vehicles go into dealership inventories, not when actually sold to consumers.”

 

It has been said by many that General Motors is no longer a car company – but a union pension fund driven by a subsidiary which happens to be a car company. Reminding me that “many a truth is spoken in jest.”

Bottom line …

There is little or no doubt in my mind that corrupt politicians are morally bankrupt and will do or say anything to gain or maintain power. Complete with knowingly aiding and abetting a public company, regulated under the Securities and Exchange Commission, to engage in Enron-style accounting that falsely portrays the company in the best light – possibly not for fraud, but for political purposes. And, one must ask, what happens when those vehicles shipped to dealers remain unsold? Is there a hidden buy-back agreement? With the government incentivize vehicle sales using taxpayer money? Can you even trust the Administration and their special interests in the critical political season?

It was once said by the late Kenneth Lay of Enron, “We have the most transparent, fair and ethical electricity trading system in history.” Reminiscent of one Barack Obama who assured us – along with Nancy Pelosi – that this was the most honest and ethical Administration in history. Similar to what former President Clinton also claimed about his demonstrably corrupt Administration.

In the final analysis, if we can’t trust the government’s numbers and they continually interfere with special interest corporations – attempting to pick and choose winners as well as manipulating the system to hide their failures – then they cannot be trusted to govern our nation.

And even though there may be “full disclosure” (similar to the “full disclosure” found in credit card agreements that feature exhorbitant rates and onerous terms and conditions) it doesn’t make a dubious practice correct or ethical.

2012 represents an opportunity to clean House – not to mention the Senate and the Presidency – throwing out the accumulated trash and preparing for a new tomorrow.

— steve

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