Coming soon: the Obamamobile
Sunday, May 31st, 2009By Randall Rasmussen
General Motors will file for bankruptcy today, making it the largest industrial bankruptcy in U.S. history.
Under negotiations led by the Obama administration, U.S. taxpayers will sink another $30 billion into the company on top of $20 billion already loaned to GM. The loans will be taken as stock equity and will give the government a 60 percent ownership stake.
Welcome to Government Motors.
You can read the government’s fact sheet here.
The Wall Street Journal weighed in this morning with an editorial that you can read here.
I have opposed government intervention in failing businesses as counterproductive, and GM is a prime example.
GM was declared “too big to fail” and the Treasury Department earlier loaned it $20 billion to avoid bankruptcy. Now, taxpayers have bought in to the tune of $50 billion, and GM is still bankrupt.
It was a bad idea to bailout GM and it is an even worse idea to, in effect, buy the company in order to save it.
Canada will get 12 percent of GM, the United Autoworkers Union will get 17.5 percent and the bondholders will get a paltry 10 percent.
If GM had gone into bankruptcy without government interference, the private bondholders would have received more than 50 percent of the company. A major reason for keeping government out of the marketplace is it chooses sides and plays favorites with political partners. The UAW is a political ally of President Obama, and he came through for them – big time. We taxpayers will pay the price.
I expect that taxpayers will continue to subsidize GM and its products, which fewer people will want to own.

Mike Belmessieri, of South San Francisco, salutes in front of the grave of U.S. Marine Michael Bianchini at the Golden Gate National Cemetery, where over 100,000 U.S. war veterans are buried, in San Bruno, Calif., on Friday. Binachini died serving in Vietnam. Belmessieri, himself a former Marine, is active in promoting causes for veterans. His son Dominic Belmessieri is a U.S. Marine about to be deployed to Afghanistan after two tours in Iraq. (The Associated Press)
