At the brink : will Obama push us over the edge? by Lott John R. Jr. 1958-

Author:Lott, John R., Jr., 1958-
Language: eng
Format: epub
Tags: Obama, Barack, Politics and government, Economic history, United States -- Economic conditions -- 21st century, Social conditions, United States -- Politics and government -- 2009-2017, United States -- Social conditions -- 21st century, United States
ISBN: 9781621570516
Publisher: Washington, DC : Regency Publishing, Inc. ; New York : Distributed to the trade by Perseus Distribution
Published: 2013-07-15T00:00:00+00:00

Socialist Takeovers

On September 29, 2010, the very day that the government announced it was taking a 92 percent ownership stake in AIG,

Austan Goolsbee declared it "totally bogus” to say that the president "is a socialist.” 89 The governments ownership of General Motors was supposed to be temporary, but by September 2012, over three years after the original takeover, the government was still by far GM’s largest shareholder, with 32 percent of the company’s stock. 90 It still owns 74 percent of what used to be known as General Motors Acceptance Corporation, now Ally Financial, which primarily handles auto financing and insurance.

Even when there isn’t government ownership, President Obama thinks that government, not consumers and private businesses, should ultimately run the economy.

But Obama’s animosity toward the private sector goes beyond disapproving of profits. He has little respect for property rights. When he can't get his way with businesses, he does not hesitate to threaten them with financial destruction. What Obama fails to recognize is that these threats scare not only the firms he threatens, but also investors around the world, to whom investments in the United States no longer seem so safe. America’s decline in economic competitiveness is the predictable result.

Cliff Asness, the co-founder of the $20 billion hedge fund AQR Capital Management, reacted to the president's aggression in a May 2009 interview:

The President screaming that the hedge funds are looking for an unjustified taxpayer-funded bailout is the big lie writ large. Find me a hedge fund that has been bailed out.

Find me a hedge fund, even a failed one, that has asked for one. In fact, it was only because hedge funds have not taken government funds that they could stand up to this bullying. The TARP recipients had no choice but to go along. 91

American businesses have been the target of a string of intimidation tactics by the White House. The bullying started with threats of costly public audits to get firms to comply with Obamas wishes and moved on to threats of firing recalcitrant CEOs. The investment firm Perella Weinberg Partners, one of Chrysler's debt holders, got a taste of White House thuggery when Steven Rattner, Obama s car czar, threatened to apply "the full force of the White House press corps [to] destroy [the firms] reputation” if it resisted the government’s reorganization plans for the failed auto maker. 92

The White House had pushed hard to nationalize the automobile companies. While bondholders and the government had loaned similar amounts to GM and Chrysler, the White House felt that the government should get a 70 percent stake in GM and leave only 10 percent for the creditors. If a company were worth less than what creditors had lent it, the creditors would normally get 100 percent, not 10 percent. The White House made sure that the unions also got stock and other benefits that should have gone to creditors. 93 The United Auto Workers ended up owning 63.5 percent of Chrysler. 94 The Wall Street Journal quoted an anonymous Chrysler debt holder calling the government's proposal “ugly” and promising to fight it.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.