Wednesday, June 3, 2009

General Motors goes bankrupt

Congratulations, Ms. and Mr. America. Overnight you have become industrialists. You are now owners of what used to be called General Motors, and perhaps should now be called US Motors. GM went bankrupt and now the US gov't—your and my government—owns about 60% of the company.
But then something really odd happened. The man who looks after our interests in Washington—at least that's what he is supposed to do—Barack Obama said that he is not interested in running GM. I presume that means that the previous management will continue to be in charge.
Imagine this: suppose you can't pay your mortgage and the bank repossesses the house. But the bank says “We are not interested in doing anything with that house.” So you stay there, you keep mowing the lawn and tending the flowers. You clean the house and make repairs where needed. The bank is not exercising its ownership rights. It is not taking real possession of the house. In fact, it looks as if it just gave you a chunk of money by allowing you to live in the house even though you are not paying the mortgage.
But of course we are dreaming. Banks don't act that way. If you don't pay what you owe, the banks takes back the house and you have to leave and move back in with the in-laws. There is no such thing as free rent.
Except if you are General Motors and you are in hock for billions of dollars to Uncle Sam.
That strikes me as fishy. The American tax payer—not Barack Obama—has given GM billions of dollars. GM now belongs to the American Taxpayer. But the folks who are elected to mind our affairs refuse to do so. We don't want to run GM, they say. All they want to do is to give GM billions of dollars of our money.
Maybe we should send letters to the White House saying “Barack are you minding the store? First you buy GM with our money and then you don't want to take possession what you just bought for us. This looks a lot like giving our money to General Motors without any return.”
It looks like one more example of different rules applying to big corporations from the rules that apply to you and me. If you or I go bankrupt, we loose the house. If GM goes bankrupt they get to help themselves from the public till—to our money. You figure it.
Who is the President working for anyway: ordinary voters or global corporations?