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Elections, Politics

GM: Bankruptcy, Bailouts, and Brigandage

Malice in the Palace
Posted: August 24, 2012 at 7:17 am   /   by

When looking back at the GM bailout, keen observers note the venal partisanship on display in how it was conducted. The United Auto Workers got a sweetheart deal and little was asked of them in return. Shareholders, nonunion workers, and the taxpayer got the short end of the stick. It also appears that there was deeply cynical partisanship at work in deciding what Chrysler dealerships would stay open (Democratic allies) and what dealerships would be closed down (not Democratic allies).

If this had restored GM to health—such that the UAW, GM, and other allies of the Democrats would be able to keep lending their support to Obama and the Democrats from a stable, long-term position of strength and power—it might seem like a master-stroke of political genius. Disgusting and borderline criminal . . . but genius.

Apparently, however, it did not restore GM to health. Numerous reports are now showing that GM may be headed back to bankruptcy, just a few years after it was bailed out and become the poster-child for neo-corporatist economics.

Obama getting the taxpayers to fund a massive power advantage to his political allies, who then take that advantage and return the favor to him in cash donations, seemed like a Machiavellian masterwork. With GM headed back to bankruptcy, however, it starts to seem less like a brilliantly planned operation and more like an act of petty crime. Not so much one of Professor Moriarty’s capers—more like a bunch of brigands breaking into a palace and seeing how much of the silver they can steal before they get run out by the palace guards.