OBAMA’S FAIRNESS

President Obama has decided to be fair to the GM bondholders. He is going to allow them to have 10% equity in the newly restructured GM. Isn’t that generous of him?

GM’s bondholders are owed $27 billion. If GM had been allowed to go into bankruptcy before the government got involved, the bondholders assets would have been legally transfered into $27 billion in either a restructured GM, or the bondholders would have gotten cash from the sale of GM’s assets.

However, Mr. “Fair” Obama has a different idea of fairness–one that breaks the laws of this country.

Obama is demanding a 50% stake in the equity of the restructured GM. The government wants half of the new company because the government loaned GM $15 billion in make-believe money–money printed out of thin air. The government entered the picture AFTER GM should have been allowed to go bust.

So, what is the fate of the bondholders under the Obama fairness doctrine? They are going to have to take what’s left after the government takes half, the union takes 39%, and the existing shareholders take 1%.

That the administration is out to destroy capitalism and turn this country into a socialist republic becomes increasingly clear every day.

We are looking at grand theft here. GM’s assets were the collateral for the loans the bondholders made to GM. Who is going to be willing to lend money to any corporation ever again, when they stand the chance of having the President of the U.S. steal their collateral?