They really do think we’re that stupid

April 26, 2010

Late last week, I started seeing commercials from General Government Motors announcing to the world that GM had paid off its government loan – early and with interest. I thought that was good news, a sign that the company was recovering, jobs would be saved, and the government could unwind the majority ownership stake it had taken in the company.

Then the other shoe dropped and I realized we were being played for suckers:

Uncle Sam gave GM $49.5 billion last summer in aid to finance its bankruptcy. (If it hadn’t, the company, which couldn’t raise this kind of money from private lenders, would have been forced into liquidation, its assets sold for scrap.) So when Mr. Whitacre publishes a column with the headline, “The GM Bailout: Paid Back in Full,” most ordinary mortals unfamiliar with bailout minutia would assume that he is alluding to the entire $49.5 billion. That, however, is far from the case.

Because a loan of such a huge amount would have been politically controversial, the Obama administration handed GM only $6.7 billion as a pure loan. (It asked for only a 7% interest rate–a very sweet deal considering that GM bonds at that time were trading below junk level.) The vast bulk of the bailout money was transferred to GM through the purchase of 60.8% equity stake in the company–arguably an even worse deal for taxpayers than the loan, given that the equity position requires them to bear the risk of the investment without any guaranteed return. (The Canadian government likewise gave GM $1.4 billion as a pure loan, and another $8.1 billion for an 11.7% equity stake. The U.S. and Canadian government together own 72.5% of the company.)

But when Mr. Whitacre says GM has paid back the bailout money in full, he means not the entire $49.5 billion–the loan and the equity. In fact, he avoids all mention of that figure in his column. He means only the $6.7 billion loan amount.

But wait! Even that’s not the full story given that GM, which has not yet broken even, much less turned a profit, can’t pay even this puny amount from its own earnings.

So how is it paying it?

As it turns out, the Obama administration put $13.4 billion of the aid money as “working capital” in an escrow account when the company was in bankruptcy. The company is using this escrow money–government money–to pay back the government loan.

In other words, they used their Visa to pay off their American (Taxpayer) Express. Pardon my language, but this is bullshit.

The American people are still bailing out a company that should have been allowed to go bankrupt, the US and Canada still own nearly three-fourths of the company, and not a dime has been repaid. All they did was move money from one pocket to the other.

And the worst part is that Treasury and their lackeys at GM think we’re such gullible children that we wouldn’t see this for the insulting con game it is.

Congratulations, guys, you’ve given us something else to remember in November.

LINKS: Sister Toldjah, Dan Mitchell, Hot Air, Fausta, Power Line (and here).

RELATED: Senator Grassley is not amused.


There’s also the violence card

April 26, 2010

In an earlier post, I wondered if the race card was the only card left in the (Social) Democrats’ deck. The answer is “no,” as Jack Kelly reminds us in a column at Real Clear Politics. They also can and do play the “angry, violent mob” card, accusing conservative protesters of near-sedition and having a potential for terrorism:

It is a despicable smear to attempt to link critics of the tax, spending and regulatory policies of the Obama administration to [Oklahoma City bomber Timothy] McVeigh. Imagine how Mr. Clinton and Mr. Klein would howl if it were asserted that those who protested the wars in Iraq and Afghanistan were responsible for the shooting at Fort Hood last November which left 13 dead.

No prominent conservative has asserted that, of course. But it’s a meme among the eminences of the left that the tea party movement is comprised of “angry” knuckle-dragging bigots one Rush Limbaugh broadcast away from insurrection and murder. All this despite the fact the only violence reported at tea party rallies has come when left wingers assaulted protesters.

Kelly then recounts two incidents of left-wing violence from among the several that have happened over the past year. But, one wonders, why do the progressive-statists feel the need to smear the opposition as barely contained rioters? Kelly offers one potential answer:

What really terrifies Democrats is not just the number or size of tea party rallies, but that they are occurring at all. For more than a century, the protest demonstration has been almost exclusively a left-wing thing. Conservatives just don’t demonstrate. The tea party indicates a level of street activism on the right unprecedented in our history.

An NBC/Wall Street Journal poll released Dec. 16 indicated the tea party was more popular than either Democrats or Republicans. Respondents approved of the tea party, 41 percent to 23 percent. More disapproved of both the Republican Party (28-43) and the Democratic Party (35-45) than approved of them.

So the tea party must be smeared, lest it gain even more adherents.

I think he’s on to something, but it’s not just fear of the other side developing its own mass movement. As I wrote yesterday, the progressives realize they cannot win the argument based on policy ideas or empirical results, most of the nation rejects what they offer and hates what they’ve done. So all they have left is to try to distract moderates and independents by painting Tea Partiers and other activists concerned by what’s going on in Washington as racists on the edge of violence. For all the Left accused then-President Bush of distracting people from the real issues by playing to their fears, they themselves are doing it in spades.

Yet more and more people are on to the game they’re playing, and each time they lay down the “race” or “violence” cards, their power to intimidate shrinks just a bit more.