So What Did We Get for the Bailout?

Late last year, the government, under "Republican" GW Bush, decided to unilaterlly bailout out GM and Chrysler. So how much was the country benefited by shoving taxpayer money into failing companies? Apparently not much as both are in bankruptcy as predicted.

Over course, now Obama has unilaterlly revised bankruptcy laws to usurp the secured debt holders and mandate who should benefit from bankruptcy. In the Chrysler bankruptcy, secured creditors got 33% of the assets, while unsecured creditors (the UAW) got 42% and 55% of the new company.

Not only am I doubt of the government's ability to turn around GM, I am worried about the chilling effect that these actions on future lending. Who wants to lend when your rights as a lender may be usurped by the Obama.

WSJ: Monday, U.S. President Barack Obama defended government intervention in GM as the auto maker enters Chapter 11 bankruptcy, saying the actions are part of a "viable, achievable plan that will give this iconic company a chance to rise again."

Under the plan, the government would own 60% of the new GM, but Mr. Obama said auto executives "will call the shots and make the decisions about turning this company around." He said the government would refrain from playing a management role in all but the most critical areas. (commentary: sure they'll just appoint the puppets) "Our goal is to help GM get back on its feet...and get out quickly," he said....

Meanwhile, GM Chairman Kent Kresa said he will keep five current members of the board of directors, and said that the Obama administration has final say on who will fill out the new board. Meanwhile, GM Chairman Kent Kresa said he will keep five current members of the board of directors, and said that the Obama administration has final say on who will fill out the new board.