First, they outline some of the unjust financial aspects:
GM's bankruptcy pushes bondholders aside in favor of the U.S. government and the UAW. Though bondholders hold $27 billion in debt, they'll get just 10% of stock.Then they move to the more important issue:
How's that compare with the other "stakeholders?" For spending $50 billion to bail out GM, the government will get 60% of the equity in the new GM; the UAW, which along with other unions gave millions to Democrats, will be repaid for its loyalty with 17.5% of the stock for $10 billion of unsecured debts.
So the government, with roughly two times what private bondholders have on the table, gets a stake five times bigger. And the union, with about a third as much "invested," gets a 70% bigger stake. Even the Canadian government, with its $9.5 billion "invested," ends up with 12%.
They call it "restructuring." We call it theft. Never in our memory has there been a more thorough, systematic effort to disenfranchise the shareholders and bondholders of a major American firm.
But our real issue with this isn't that people will lose money. It's that we don't believe the government's actions are even legal.Exactly so. Obama and his administration are well down the road of moving from a nicer version of the Mussolini government of Fascist Italy of the 1920s to being an exact duplicate.
The White House has basically been manipulating GM into bankruptcy since early this year, putting 31-year-old Brian Deese, a Yale law student, in charge of GM's restructuring. "It is not every 31-year-old who, in a first government job, finds himself dismantling General Motors and rewriting the rules of American capitalism," the New York Times said with tongue in cheek (we think).
It used to be that the "rules of American capitalism" came from 200 years of U.S. case law, the Constitution and legitimate federal regulation. But no more. Instead, the job's been given to someone not yet out of law school. This shows shocking contempt for GM, once the world's pre-eminent industrial company, for American capitalism and the rule of law. [emphasis added]