Back to Basics

My new piece starts this way:

If you invested more than $100 in a company, would you be happy if your shares were worth only $36? By anyone’s definition that investment would have been a terrible failure.
Yet, that is how the federal government’s investment in General Motors looks. The federal government has put in well over $100 billion into shoring up General Motors, but the entire company, not just what the government owns, was worth only $36 billion on Tuesday.
GM sales have bounced around, rising in March and then falling in April, but investors’ best guesses for what future sales will be are already in GM’s stock price. And surprisingly, a recent Rasmussen poll shows that support for the bailout has been rising and now 44 percent of likely voters say that the bailout was good for America.
The money the government spent adds up quickly: $50 billion in TARP bailout funds, a special exemption waiving payment of $45.4 billion in taxes on future profits, an exemption for all product liability on cars sold before the bailout, and $360 million in stimulus funds. Other money of which it is harder to quantify GM’s share includes the $15.2 billion Cash for Clunkers program and the $7,500 tax credit for those who buy the Chevy Volt. And all those costs don’t even include the billions taken from GM’s bondholders by the Obama administration. . . .

From the WSJ:

Even General Motors Co.’s Lordstown, Ohio, complex, long known for its money-losing small cars and its bad labor climate, is running 24 hours a day, with more than 4,000 workers churning out hot-selling Chevy Cruze compacts. But here in Moraine, the GM assembly plant closed for good. Despite being one of GM’s most productive and cooperative factories, Moraine was closed following the company’s 2007 labor pact with the United Auto Workers union. Under a deal struck by the UAW during GM’s bankruptcy two years later, Moraine’s 2,500 laid-off workers were barred from transferring to other plants, locking them out of the industry’s rebound. The trouble with Moraine: Its workers weren’t in the UAW. “We did everything we could to keep that plant open and keep our jobs,” said Mitchell Wood, a 44-year-old father of two who used to attach tailgates onto sport-utility vehicles at Moraine. “But in the end, we didn’t have a chance, not being in the UAW.” The plight of Moraine workers highlights the extraordinary role played by the UAW during the near-collapses and bankruptcy reorganizations of GM and Chrysler Group LLC. That role remains a political flash point today. Democrats have cast President Barack Obama and the UAW as saviors of America’s auto industry. Republicans call the help a taxpayer-funded giveaway to the president’s union allies. . . .

Yeah, me neither, but we may have no choice:

Congressional Black Caucus Chairman Emanuel Cleaver (D-Mo.), who is facing a lawsuit for failing to pay down a 2002 Bank of America loan that he used to buy a car wash in Missouri, could have a good chunk of the $1.5 million he owes paid off by taxpayers.

According to the Kansas City Star, the Small Business Administration (SBA) backed about three-quarters of Cleaver’s 2002 loan, which means that if the loan goes bad, the SBA could pay off $1.1 million of that debt.

Cleaver once said “there is no reason for us to go in there and bail out George Bush,” but I’m sure he’ll find 1.5 million reasons taxpayers should bail out Emanuel Cleaver.

Has the bailout been really this successful? That is what Biden claimed on Face the Nation.

“Look, you know, everything that he said, the American people don’t think the policies have worked. Romney argued about let — not an exact quote — but let Detroit go bankrupt. Wasn’t very popular action the president took. Now they’re hiring people. You know, hundreds of thousands of new people instead of losing 400,000 jobs. General Motors is the largest corporation in the world again.”

See also this here.

On the broader-based Forbes list, Volkswagen weighed in at No. 24. Daimler (think Mercedes-Benz) hit No. 43. Ford and Toyota ranked No. 54 and No. 55. General Motors trailed at No. 61. . . . • No. 18 in sales • No. 70 in profit • No. 155 in assets • No. 148 in market value

Hope-a-nomics: Colorado’s own green loan sinkhole
by Michelle Malkin
Creators Syndicate
Copyright 2012

There’s no escaping Solyndra Syndrome. Here in my home state of Colorado, citizen journalists have uncovered our own gaping government green loan sinkhole. The stench of Chicago-on-the-Potomac is fouling the fresh Rocky Mountain air.

Meet Loveland-based Abound Solar, the lucky winner of a $400 million federal loan guarantee from the Obama administration. Earlier this month, the thin-film cadmium telluride solar module-maker announced layoffs of nearly 300 employees (70 percent of its workforce). In addition, the firm froze plans to build a new factory in Indiana. Abound says it will ride out bad market conditions and “hopefully” survive until the market recovers.

But White House hope-a-nomics is what got Abound and taxpayers into trouble in the first place.

Back in 2010, President Obama promised America in his weekly radio address that Abound would “manufacture advanced solar panels at two new plants, creating more than 2,000 construction jobs and 1,500 permanent jobs.” Energy Secretary Steven Chu waves his green pom-poms, too. “Not only is this investment creating thousands of jobs, but it is also increasing our renewable energy manufacturing capacity and putting us on the path for our future prosperity.”

Like the rosy projections Obama and Chu used to justify pouring half-a-billion dollars in eco-subsidies down the now-bankrupt Solyndra solar drain, Abound’s financial outlook was based on mathematical make-believe. Hope plus change equals fail. Turns out Abound raked in green government funds despite big red flags from Fitch Ratings.

GOP House Oversight and Reform Committee Chairman Darrell Issa wrote: “Fitch describes Abound as lagging in technology relative to its competitors, failing to achieve stated efficiency targets, and expecting that Abound will suffer from increasing commoditization and pricing pressures. DOE’s willingness to fund Abound, despite these concerns, calls into question the merits of this loan guarantee.”

The financial mess was reported by ABC News, but the Obama administration has so far escaped real scrutiny of his crony venture socialism.

How were Fitch’s warnings ignored? Thanks to the intrepid investigative work of Colorado’s Todd Shepherd at CompleteColorado.com, Amy Oliver at the Independence Institute and Michael Sandoval at the People’s Press Collective blog, the crass political science driving this latest Department of Energy loan scandal has been exposed. The loan deal appears to be textbook “pay-for-play” between Team Obama and one of Colorado’s wealthiest progressive activist scions, Pat Stryker. She’s the billionaire heiress whose family founded a medical device and software company. Her investment firm, Bohemian Companies, dumped nearly $500 million into Democratic coffers between 2008 and 2012. Bohemian also invested considerably in Abound.

Colorado Democratic Rep. Betsy Markey, a backer of job-killing cap-and-trade policies and other stifling environmental regulations, pushed for the massive Abound DOE loan. As CompleteColorado.com noted, Stryker donated personally to Markey’s campaign, and Abound ran ads thanking Markey for her eco-radical voting record. Like Solyndra chief investor George Kaiser, Stryker has visited the White House on more than one occasion. Like Kaiser, Stryker is a top Obama bundler.

Photoshop credit: Moonbattery

As long as Barack Obama insists on spinning fables about the auto bailout, I will continue to call attention to the forgotten victims and sacrificial lambs who got screwed. Yesterday’s UAW pep rally in Washington was another exercise in reality denial. I’ll say it again: The Right needs to forcefully counter the Obama machine’s Alinsky story-telling tactics. The leftists who claim to speak for hard-working people who play by the rules won’t put the names and faces and suffering of Obama’s jobs death toll victims front and center. We must.

Related read: Despite Detroit Comeback, Public Opposes Bailout

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The Autoworkers Obama Left Behind
by Michelle Malkin
Creators Syndicate
Copyright 2012

The White House fairy tale about the Happily Ever After Auto Bailout is missing a crucial, bloody page. While President Obama bragged about “standing by American workers” at a rowdy United Auto Workers meeting Tuesday, he failed to acknowledge how the Chicago-style deal threw tens of thousands of nonunion autoworkers under the bus.

In a campaign pep rally/sermon billed as a “policy speech,” Obama nearly broke his arm patting himself on the back for placing his “bets” (read: our money) on the $85 billion federal auto industry rescue. “Three years later,” he crowed, “that bet is paying off for America.” Big Labor brass cheered Obama’s citation of GM’s “highest profits in its 100-year history” as the room filled with militant UAW chants of “union made.”

“Union made” — but who paid? Scoffing at the criticism that his bailout was a massive union payoff, Obama countered that all workers sacrificed to save the auto industry. “Retirees saw a reduction in the health care benefits they had earned,” Obama told the congregation, er, crowd. “Many of you saw hours reduced,” he sympathized, “or pay and wages scaled back.”

Let’s clear the fumes (again), shall we? The bailout pain was not distributed equally. It was redistributed politically.

Bondholders standing up for their property and contractual rights got shortchanged and demonized personally by the president. Dealers and suppliers faced closures based on political connections and lobbying clout, rather than neutral efficiency evaluations. And as I first reported in September 2010, in the rush to nationalize the auto industry and avoid contested court termination proceedings, the White House auto team schemed with Big Labor bosses to preserve UAW members’ costly pension funds by shafting their nonunion counterparts.

These forgotten nonunion pensioners (who worked for the Delphi/GM auto parts company) lost all of their health and life insurance benefits. Hailing from the economically devastated Rust Belt — northeast Ohio, Michigan and neighboring states — the Delphi workers had devoted decades of their lives as secretaries, technicians, engineers and sales employees. Some have watched up to 70 percent of their pensions vanish. They’ve banded together to seek justice in court and on Capitol Hill under the banner of the Delphi Salaried Retiree Association.

Through two costly years of litigation and investigation, the Delphi workers have exposed how the stacked White House Auto Task Force schemed with union bosses to “cherry pick” (one Obama official’s own words) which financial obligations the new Government Motors company would assume and which they would abandon based on their political expedience.

There are many things wrong with Rattner’s claims. For example, Rattner misstated how much taxpayer money was put into bailing out the industry. His $82 billion number ignores the $45 billion in special tax benefits given GM, exemption for product liability, the Stimulus dollars, as well as “Cash for Clunkers.” The Washington Post points to other problems.

Media progs and Soros monkeys are working overtime to discredit yesterday’s Detroit News report on alleged White House intimidation of, and pressure on, Ford Motor Company over its popular ad critical of the government auto bailout. As I pointed out yesterday, it’s just another one of those Chicago coincidences that the Attack Watch goon squad’s most recent targets just happen to be…auto bailout critics.

My column below sets the latest Ford fiasco in the proper context: the long pattern of bullying by this White House. Obama defenders in the media believe that transcribing official denials will “put the story to rest.” ATF/DOJ/WH whitewashers love these tools.

Dan Ikenson at Forbes isn’t bowed: “To the extent that the administration wants to tout the bailout as evidence of its “successful” economic stewardship, it should know that there are plenty of us willing and able to do the auditing on that claim.”

Just Karl at Hot Air’s Green Room adds:

The widely-mocked AttackWatch has been eager to defend the bailout of GM and Chrysler. Moreover, touting these bailouts is a key to Obama’s effort to hold onto the Great Lakes region in 2012. Ford pointing out that it is easily outperforming GM and Chrysler is not helpful to Obama. Neither is pointing out that the bailout saved nowhere near the million jobs claimed. Indeed, it is likely that a regular bankruptcy would have yielded about the same number of continuing jobs as the taxpayer-funded bankruptcy. The only difference is that Obama intervened to bail out his union support at the UAW, rather than the companies’ creditors. With a economy mired in malaise overall, Obama does not need Ford reminding people that taxpayers were put on the hook to boost his re-election effort.

Related tidbit from John Hayward at Human Events: “Did you know Ford was the only one of the Big Three automakers that can be the target of a union strike, and the United Auto Workers are contemplating just such a strike? From a New York Times article published yesterday:”

After taking Sunday off, union negotiators began “high-level financial discussions” with Ford on Monday, according to a memo they posted online. A subsequent memo said the parties had agreed to meet for “very long negotiating sessions” this week and that bargaining would continue around the clock when a deal was near.

Ford is the only one of the three Detroit carmakers whose workers are allowed to strike in this year’s talks. Binding arbitration is the only option at G.M. and Chrysler in the event of an impasse, under the terms of their government-sponsored bankruptcies in 2009.

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Our White House bully problem
by Michelle Malkin
Creators Syndicate
Copyright 2011

Spin, baby, spin. Throughout his frenetic jobs tour across the West this week, President Obama tried to seize the narrative. Republicans, he told champagne-sipping, tea party-trashing Hollywood moguls and tech titans, are intolerant bigots, know-nothings and thugs. They’ve made his hair “grayer” and left him “all dinged up.”

But who’s battering whom? Since Day One, Obama has been the Chicago bully in victim’s clothing. The mask is wearing thin.

On Tuesday, Detroit News reporter Daniel Howes reported that White House officials leaned on Ford Motor Company to yank a popular TV and Internet ad critical of competitors who took federal bailout money.

We are all aware that one of the bail-outs that occurred on Obama’s watch was the takeover of two of the three major auto manufacturers, General Motors and Chrysler companies. As both faced bankruptcy, the Obama administration stepped in to become the owner of these companies.

Among the first to discover the arrogance and ignorance of those selected to direct its Automotive Task Force were hundreds of dealerships for both companies. On May 14, 2009, Alan Spitzer was among them. He was informed that his company, begun by his grandfather, expanded by his father, and one he expected to hand on to his own children had been arbitrarily disenfranchised by Chrysler.

The worst aspect of this was that, while franchises are protected by state law, federal law trumps this long established business relationship. Chrysler had been instructed to divest itself of a quarter of its dealer network and General Motors was as well. Some 2,000 dealerships were affected by the regimes demands.

As Spitzer and his daughter, Alison, spell out in their new book, “Grand Theft Auto: How Entrepreneurs Fought for the American Dream” (http://www.newyearpublishing.com/), “Dealers are completely independent business people, not owned by the auto manufacturers as many believe. Dealers are the manufacturer’s only customers. They are the face of their brands. Without them there are no sales.”

One might have thought that the last thing to do would be to decimate a quarter of General Motors and Chrysler’s vast network of dealers, but that is exactly what the Obama task force did “as a condition for securing the federal funding they needed to stay afloat.” While “saving” the companies essentially was a sop to the auto unions, the task force cut loose the dealers who were the lifeblood of the companies, plunging many of them into economic destruction along with their thousands of employees.

Worse yet, “hundreds of franchises were stolen from their rightful owners and re-assigned or ‘gifted’ to other dealers.” Additionally, anyone who owned GM’s and Chrysler’s securities were informed that neither company would honor them under their new management, defrauding them of their investment. Both companies were required to add union representatives to their board of directors.

They had to have been extraordinarily stupid to do this, but the task force did not include a single person with any experience in the auto industry. If they had they would have known that “States earn about 20 percent of their sales tax revenue from auto dealers.” What’s more, “dealerships comprise as much as 7-8 percent of all retail employment.”

Critical to this extraordinarily thuggish decision was the fact that the dealerships did not cost the auto manufacturers one dime. They were given less than a month to close their doors. Contrary to the belief that the decision of who would be closed was not based on their political affiliations. Indeed, there appeared to be no rational reason for who was chosen for destruction.

The takeover was an example of a gangster government intervening in the private sector; making sure to not “let a crisis” go to waste as it pursued its socialist agenda.

For Alan Spitzer, it was apparent that “the only avenue for justice would be for Congress to enact another federal law that, presumably, would leapfrog the bankruptcy statues and overturn the terminations.