Ride The Big One: GM On Brink Of Bankruptcy, Or Deja Vu All Over Again.

Barack and Joe have been all over the fruited plains, purple mountains majesty, and sea to shining sea proclaiming that Barack, a man who has never held a job before becoming our nation's chief executive, single handedly saved the entire auto industry. This is a statement that is every bit as silly as it is offensive.

It is offensive because of the flat out shenanigans that went on to facilitate the sale of GM to the American taxpayer and subsequently the gifting of a sizable portion of the company to the UAW. The laws that determine debt subordination, which have existed since before the founding of our nation, were thrown out the window. When the GM bond holders balked, they were labeled as greedy and unpatriotic, and then screwed completely by the Obama Administration. Tax Payers suddenly found themselves holding a controlling interest in an industry which they knew very little about, and not a single proxy vote took place in which we had the opportunity to pick suitable leadership to run the new company. Decisions were made for running our illegally bought business not upon what would make it successful, but upon what would be politically expedient for the current group of White House occupants. The effects of the GM bailout are still being felt today. American Corporations are flush with cash, as are many investors. Both groups are reluctant to invest that cash. This is not a political decision as the lefty crowd has been claiming since early in 2010, but self preservation. Why would anyone with two nickles to rub together wish to put their capital at risk knowing that if their chosen industry were to become the subject of political fancy, their investment would simply be stolen away, and they would then be labeled as greedy should they complain? Individual property rights you see are the backbone of any successful economy. Why invest or work if the government will simply rob you blind the moment they notice you have succeeded?

The claim that Barack Obama saved GM is silly because it is simply not true. For years, the auto industry in the U.S. has been fighting a malevolent federal government hell bent on its destruction. Cafe standards forced the industry to sell not the vehicles that customers wanted, but rather the vehicles that our liberal friends wished everyone would drive. So, a Ford Escort for example, was sold at a sufficient loss so as to sell sufficient numbers to keep the average mpg ratings for ford within federal guidelines, while the people who bought Town Cars were forced to pay a much higher price than what Ford would have sold the car for initially. That folly has been put on steroids by current GM management, which is Barack Obama and the UAW. Rather than selling cars that people would actually want, a fortune was wasted on convincing people that they wanted slow moving goofy looking hybrid vehicles that appealed on no level. Chevy Volt sales to date still number less than 10,000, and that is for all of its production years combined. What does that mean for us, the reluctant owners of GM?

Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.
Right now, the government’s GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share. However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.

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In the 1960s, GM averaged a 48.3% share of the U.S. car and truck market. For the first 7 months of 2012, their market share was 18.0%, down from 20.0% for the same period in 2011. With a loss of market share comes a loss of relative cost-competitiveness. There is only so much market share that GM can lose before it would no longer have the resources to attempt to recover.

We have been told that one of the possible campaign memes for the upcoming general election in November would be, "Osama Bin Laden is dead, and General Motors is alive." So what have we learned within the last two weeks? Barack Obama actually served to hinder the efforts to take out Osama Bin Laden. Those of us with actual knowledge of economics or with actual business acumen could also have told you that GM would have not only survived a bankruptcy, but would have emerged as a stronger company than what it is today.

Something else to consider, There are currently 19 major auto manufacturers building cars in America today. 17 of those companies are not called GM, Ford, or Chrysler. What GM does prove however is that it is the production of wealth which drives our economy, and not some magical jump start of spending. GM builds cars no one wants because the government has graciously forked over $200,000 per Chevy Volt sold. GM collects its $35,000 from some lucky consumer who has purchased a crap car that spontaneously combusts, and yet that is not enough for the company to remain profitable.

General Motors will probably not survive for four more years. Had the established system of handling corporate bankruptcy and our free enterprise system of individual property rights been respected, General Motors would just now be emerging from bankruptcy as a stronger and much more viable company, selling cars that people actually wanted. The bad news in all of this is that Barack Obama now wishes to, "bail out," more American businesses in the same manner. The good news is that we will have the ability to file our restraining order in just, 81 days.

Cross Posted from Musings of a Mad Conservative.

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Comment by Brian Keith Prince on August 31, 2012 at 6:18am

Anyone need a laugh? John Ransom to me and me back:

John Ransom: Jay Carney, White House Press Jester and His Pack of Fools

John...you made my day!

From: YouTube Service <noreply@youtube.com> To: zerrubabel2@yahoo.com Sent: Wednesday, December 31, 1969 7:00 PM Subject: brianprince100 sent you a video: "Creepy Carnival Music"

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brianprince100 has shared a video with you on YouTube:

The Carnival is in the White House!

Creepy Carnival Music

For all the people that say oh can you do this and can you do that...I can do whatever I please. I make audio files all the times and loosely based off of this one. For the people that say that's not creepy, think about yourself walking down a hallway or a carnival that is haunted and seeing just messed up s*** everywhere and never knowing where a clown might come out and f*** with you...yeah gets scarier. To all the people that said hey this sounds like music off FF4..that's because it is. It's just when i heard it, it sounded like a demonic carnival to me. So listen and enjoy :). Actually on a side note...think about walking into an abandoned circus but everything is dark..then the carousal lights up and starts spinning for no reason and the whole park comes to life but you see no one. That's creepy to me and why I uploaded this.

Comment by Michael Gray on August 31, 2012 at 6:09am: Running on the fact that someone was killed is pretty sad and disgusting. What happened to our morals in this country?

Comment by Darrell Russell on August 18, 2012 at 8:52am: Hopefully this message will be a lesson to the American people. Obama was not and had no intention in saving GM. His first priority was save the unions. Their pensions, benefits, wages, and most of all their loyalty to him and the democratic party. This is all being done with the taxpayers money. Obama will pursue more government take over of business if the American people give him the second term he desperately needs to complete his fundamental transformation of America.\.

Get out, talk to your friends, your neighbors and work place associated. Talk to them about the issues and what Obama has in store for WTP if he is able to steal the second term.

Comment by Barry Gabrielson on August 17, 2012 at 4:27pm: Did you like when then Press stated that GM was paying off its loans and that it was doing well. When there was an investigation, GM borrowed money to pay off part of that loan. So I guess if you borrow money to pay off other debt, the borrowing cost goes away, off the books? Thats Government Accounting. They are so stupid, so so stupid. The problem is that they have 44% of this nation of sheep believing these lies. The best thing the Government does is be inefficient, waste money and in unaccountable for this debt. The jerks making bad decisions dont owe one dime back to the taxpayer, so spend spend away, go on more vacations, its one big party on the taxpayers back. We must work harder so they can party harder.

Comment by Brian Keith Prince on August 17, 2012 at 4:17pm: Don't leave NADER'S RAIDERS...out of the EQUATION.

RULE BY "ADMINISTRATORS" (MANDEL HOUSE/WILSON) and the LEAVENED BREAD of LITIGATION, LEGISLATION, REGULATION, ADMINISTRATION.

Revelation 13:12.

Comment by Joe Tomei on August 17, 2012 at 3:43pm: Where do I sign to vote? I cannot wait! He can go to Chapter 13 for all I am Concerned! Just Pull the PLUG in November! He,.... Pres. Obummer probably won't know the difference nor believe things have changed until he try's to call his campaign manager in November and the line has been disconnected, his personal phone to Air Force One silenced and Michelle's personal travel agenda manager dissed for her next vacation Junket on good old AF 1. Hollywood will call and have to tell the Obummer's that this has all been a "green screne" event and not to worrry about precasting any more future appearances!

Sang to the tune of Stevie Wonder's "Getting just enough, Just enough..... for the Ci..ty,....... Yeaheahhh!"

Comment by Kristen Bright on August 17, 2012 at 2:56pm

Comment by Ruth Sluder on August 17, 2012 at 2:51pm: The government needs to get out of the way and quit with the ridiculous regs. The regulations are killing all businesses. Get out of the business Obama! Let us have America back you can't handle it!

Comment by Gerald Smith on August 17, 2012 at 2:48pm: Now and then when I post something the usual retort from an Obamazombie is "he killed Bin Laden and destroyed Al Qaeda and he saved GM." Obummer did NOT kill Bin Laden, Al Qaeda's still out there doing damage and he sure as hell didn't save GM. When I was talking with someone earlier about GM he said, "Well, the government's done about all it can do." Lord I hope so!!!

Comment by Robert R Smith on August 17, 2012 at 2:44pm: Fool us once, shame on you, fool us twice, shame on US