Six weeks after the flailing labor movement helped Obama win a second term, the US Treasury has announced its intention to divest itself of General Motors shares. The Detroit News reports that if GM share prices remain constant at current levels, taxpayers will sustain a loss of about $13 billion.
I want to draw attention to two political details in the article. First, we all recall the derision Mitt Romney met for his advocacy of saving GM through the bankruptcy process. I recall Romney chiding Obama during one of the debates that bankruptcy is precisely the process the administration followed. David Shephardson, the author of the Detroit News piece, confirms Romney’s version of the administration’s GM bailout.
The Treasury initially owned nearly 61 percent of GM as part of the bailout as it swapped about $42 billion of the loans for stock in the reorganized company after it exited bankruptcy in July 2009.
The Obama administration forced GM and Chrysler into bankruptcy as a condition of getting additional government aid.
So yes, the Obama administration forced GM into bankruptcy, and yes, the way they did it ensured that taxpayers would foot the bill.
The second political peculiarity is in the choice of words GM CEO Dan Ackerson used to describe cultural changes necessary at GM in a 2011 Detroit News interview:
“Whoever comes after me; it’s going to be a more important appointment than mine because he or she will have to carry on a cultural revolution here. It’s just like the Communist Party in China in the 1960s, there has to be a cultural revolution here,” he said.
So GM henceforth must act “just like the Communist Party in China in the 1960s.” Here’s a little tidbit from Wikipedia on that lovely episode:
The most gruesome aspects of the [Cultural Revolution] campaign included numerous incidents of torture, murder, and public humiliation. Many people who were targets of ‘struggle’ could no longer bear the stress and committed suicide. In August and September 1966, there were 1,772 people murdered in Beijing alone. In Shanghai there were 704 suicides and 534 deaths related to the Cultural Revolution in September. In Wuhan there were 62 suicides and 32 murders during the same period
Torture, murder, public humiliation. suicide. Why, that’s an excellent business plan, don’t you think? I trust that Mr. Ackerson is simply displaying his total ignorance in this ill-chosen simile. Still, this is a chilling image coming from the government-chosen CEO of “Government Motors.”