Only the government would consider it a success to buy stock at $43.84 a share and sell it at $33. -- But President Obama and those who supported his bailout of General Motors and Chrysler are claiming just that today.
First, the alternative to the government bailout wasn't to "give up" as Obama claimed on Thursday at his press conference. Bankruptcy didn't mean that all jobs were going to be lost. It didn't mean that all the factories producing cars would be closed.
Yet, the president made that claim in his announcement again today and he continually misstates what would have happened in a normal bankruptcy. Courts don't just close down bankrupt companies. In fact, that rarely occurs. Any part of a company that can continue operating profitably continues to do so.
Some are pointing out that just a year and a half ago GM stock was trading at just $1 a share and claim that today's closing price of $34.19 is proof of the bailout's success. It simply doesn't account for the over $50 billion in direct bailout funds and the tens of billions of dollars in other breaks President Obama gave the company and its unions.
It also ignores that GM's stockholders and particularly its bondholders had their wealth stolen from them when the government took over ownership of the company. Traditional property right protections were shredded by the Obama administration, making corporate investments in America riskier as a result.
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7 comments:
What crap GM should have been made to work it out on their own or shut down ..... the government has no business keeping poorly run companys afloat for any reason.... the other solution is get rid of the UAW they are just another group of thugs out raping the very business that keeps them funded
Criminal Corporate Welfare. This is the essence of a Facist State
Stupid is as stupid does.
Wonder why the stock marker continues to be anemic? Perhaps its because investors can't ever be sure now if 1) the coprorate officers aren't scamming the prices with insider trading, 2) the government won't suddenly render your investment (lol!! thats what its called!!) worthless. Null and Void. What's next? Your 401(k)....oh wait a minute, yeah, ya got me....they already stole most of that...Don't listen to those cute commercials on TV with the babies...you don't stand a CHANCE in the stock market nowdays...this kind of stuff proves it.
The last paragraph is all wrong. The stockholders lost wealth when the company filed for bankruptcy.
A company doesn't have to go bankrupt in order for its investors to "lose wealth"....look at GE stock....they're a vibrant, innovative company but their stock is down from $50 or so to about what, $17 now? How much have THOSE guys lost...
Change IS to WAS and move on. That is the fact. Change the administration if you want the facts to change but choose carefully.
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