I hate left-right bickering. Hate it. I especially hate the left-right bickering about the automobile bankruptcy/bailout. Yes, the approach taken w/r the bankruptcies left much to be desired, yes, I question the legality of the various things done by the government to ensure that the bankruptcies proceeded according to their "plan", and yes, there was probably a ton of politics involved (not the least of which, the preservation of the almighty union vote). But yes, a too rapid shutdown of the American auto industry would probably have had pretty deep and severe consequences, which would have required extraordinary "other" taxpayer funded programs (if nothing else, more budget for the police/military to quell the riots and social instability that would inevitably happen if unemployment climbed into the mid-teens or even twenties), and yes, I too wonder what America would look like once we lose all of our ability to manufacture (though Robert Reich, a pretty darn tootin' liberal guy, has a series of blog posts about why the whole idea of preserving American manufacturing should be pwnd). But the auto bankruptcies are not about the the unions, or the recession, or American competitiveness, or the small bondholders (more about this later).
Most of all, I hate left-right bickering because I'm increasingly convinced that it is all manufactured for the preservation of those who have absolutely destroyed America. Watch I.O.U.S.A. if you don't believe that America is up shit's creek w/o a paddle. Because of all these ridiculous left-right battles (and don't get me started on the cultural ones), we hate each other even more than we hate (1) those whose political might structured a financial system where they could get extraordinary magnified returns on the backs of those of us just trying to save for retirement or trying to put a roof over our families' heads and (2) those in other parts of the world who are just counting down the days until we explode magnificently.
When will people realize that it won't matter if we have or don't have gender equality, have or don't have the right of choice, have or don't have gay marriage, have or don't have high or low taxes when we no longer have a country?
When it's too late.
Rape the country? Too late, already done. Want more proof? Here's one:
The way these banks are getting their $6 billion bonanza is stone cold illegal.
I smell a rat.
Stevie the Rat, to be precise. Steven Rattner, Barack Obama's 'Car Czar' - the man who essentially ordered GM into bankruptcy this morning.
When a company goes bankrupt, everyone takes a hit: fair or not, workers lose some contract wages, stockholders get wiped out and creditors get fragments of what's left. That's the law. What workers don't lose are their pensions (including old-age health funds) already taken from their wages and held in their name.
But not this time. Stevie the Rat has a different plan for GM: grab the pension funds to pay off Morgan and Citi.
Here's the scheme: Rattner is demanding the bankruptcy court simply wipe away the money GM owes workers for their retirement health insurance. Cash in the insurance fund would be replaced by GM stock. The percentage may be 17% of GM's stock - or 25%. Whatever, 17% or 25% is worth, well ... just try paying for your dialysis with 50 shares of bankrupt auto stock.
Yet Citibank and Morgan, says Rattner, should get their whole enchilada - $6 billion right now and in cash - from a company that can't pay for auto parts or worker eye exams.
And here's another:
...a JPMorgan-led group of banks was largely unsuccessful in selling off a $12 billion loan in 2007 to finance Cerberus Capital Management's purchase of Chrysler in 2007, according to several reports at the time. Other lenders on that deal were Citigroup, Morgan Stanley, Goldman Sachs and Bear Stearns, though JPMorgan assumed Bear's exposure when it bought the faltering firm the following year.
The banks apparently hedged a good deal of this exposure by buying credit default swaps of Ford and GM. A report by bond research firm CreditSights in 2007 noted a sudden rise in credit default swaps on Ford and GM that July, which it attributed to bank hedging activity as efforts to sell the Chrysler debt ran into trouble.
Do you see what just happened? The too-big-to-fail banks NEVER LOSE. No matter what happens to every other industry, every other player in the market, every other citizen of this country, only one group of persons? bandits? cylons? are guaranteed to NEVER LOSE.
And we suck because we allow this to happen.
It's pretty vomitously disgusting, isn't it?
Posted by: teahouseblossom | June 05, 2009 at 12:50 AM
Oh, and did you happen to catch this week's Frontline? "Breaking the Bank" - all about the bank bailouts, Merrill Lynch/BOA merger, etc. Very interesing.
Posted by: teahouseblossom | June 17, 2009 at 01:52 AM