Deep Thoughts from Wingnuttia

Deep thoughts from Wingnuttia

He’s not completely to blame and from what I’ve seen of him of TV, GM’ now former CEO Rick Wagoner seemed like a nice man. Still, as they say business is business and with a $10 million dollar parachute he’ll find some way to struggle through. of all the screwy things being said aprt his departure is that President Obama fired Wagoner. Sure the usual right-wing bloggers who wouldn’t know a fact if it bit them on the ass are getting the story wrong, but so is Lou Dobbs, the L.A. Times and that buffoon from Arizona, John McCain. president Obama did not fire Wagoner and for that matter is is not at all unpredented for the government to remove executives that are recieving government aid, LA Times, Dobbs uncritically forward McCain’s false claim that Wagoner’s departure was “unprecedented”

In a March 31 article, the Los Angeles Times uncritically quoted Sen. John McCain saying of Rick Wagoner’s resignation as General Motors CEO: “This is a remarkable move by the federal government — I think unprecedented in the history of this country. … What does this signal send to other corporations and financial institutions about whether the federal government will fire them as well?” Similarly, on the March 30 edition of CNN’s Lou Dobbs Tonight, host Lou Dobbs stated that “[s]everal leading Republicans immediately criticized the president’s plan and blasted his decision to fire GM’s CEO Rick Wagoner. Senator John McCain said Wagoner’s dismissal is a remarkable and unprecedented act.” In fact, the government did not fire Wagoner as Dobbs claimed. Rather, the government told GM that Wagoner had to step down as a condition of GM receiving further government aid. Moreover, contrary to the characterization of the government’s action as “unprecedented,” similar actions occurred at AIG and at Fannie Mae and Freddie Mac, where chief executives were removed in September 2008 as part of agreements to accept government aid.

GM recieved $19.3 billion in the last bail-out based on Wagoners promise to make substantial progress in turning GM around. He made little progress ( and not because of labor) and was asking for more assitance. Obama agreed that some assistance might be in line, but not if Wagoner continued as CEO. Wagoner could have stayed and taken GM into Chapter 11, but chose not to. Some how, its that right-wing math, it all adds up to Obama being both a fascist and a socialist. Just a few months ago Obama was the anti-Christ and a terrorist. Maybe Obama is all these things, a kind of super hero villain that can change appearances at will, but being an adult I have my doubts. The truly pathetic thing is that this kind of rabid name calling, while not uexpected, is the best the Republican extremists can come up with. Let the contradictory epitaphs fly and hope that something sticks.

If GM, and possibly Chrysler are to be saved at this point they probably are headed for Chapter 11 or a government sponsored version of bankruptcy. Does the Press Corps Understand What Bankruptcy Is?

And it makes sense that it is. GM is not just any company. It’s a major American institution and its failure has broad ramifications for the economy as a whole. So the task of managing GM’s insolvency requires special attention, special procedures, special care. What the Obama administration is pretty clearly doing right now is trying to broker a pre-packaged bankruptcy. In order to manage expectations and control the chaos of a GM bankruptcy, they are giving the company working capital and pushing it to come up with a realistic plan of reorganization, just as a bankruptcy court would do. Because of the current state of the economy, a typical bankruptcy would likely result in liquidation. GM would not be able to get the loans it needs to stay in operation, and without some warranty guarantees, consumers would be unlikely to buy from GM during the bankruptcy process.

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