So this is how it works; The government shows up in your office one day and says "take our money, or give us common stock, or renounce your claim to your bonds and their debt", or any of the other demands they might make in their effort to quietly nationalize a company.
You're a smart person, you have been successful in the past and sure, you are experiencing some tough times, and you love your country. You politely decline the governments "offer" (which they perceive as help). Oh no no no. This is an offer you can't refuse! If you do, then you will be torn apart by the white house press corps. The press proceeds to villafy you in a 24hr news cycle, and then a rented tour bus with 40 homeless people in orange shirts (paid for by your tax dollars) shows up at your home. Your children are horrified, your neighbors are not amused, and the circus in your front yard strikes you as even more bizarre than you could have imagined because there are more press people than protestors. When you see the images on the news that night you cannot believe what you are seeing! Somehow it looks like there were hundreds of people, just like the tea party you attended and was NOT on the news, on your fron lawn! You put your head in your hands, then put your children to bed, and then try yourself to retire for the night.
The next day, you go into the office, pick up the phone, call your government contact (who you call Cuffy Meigs), and you beg for mercy.
Welcome to our new reality. Directive 10-289 is is being executed. We saw what happened at AIG. While $14 Billion in earmarks and pure pork are not worth fighting about because they amount to less than 2% of the budget, we will spend 3 days in congressional hearings for $156 Million amounting to less than 1% of the TARP funds that were authorized.
AIG caved, and now GM and all of their suppliers and bond holders have caved. The people who invested in the company and hoped for them to make returns have caved too. They saw what happened at AIG, and they don't have the stomache to stand up to the orange shirts for what is rightfully theirs. Ironically it's the people who brought them down who will reap the benefits of the fire sale that is the bankruptcy of GM. The Goenrment restrictions on emisions and so forth makes it difficult to compete, and the gold plated compensation contracts that the unions have extorted make it difficult to compete. Despite all that there were bond holders and suppliers who believed that GM could still turn a profit, and those are the people who are left in the cold.
Who will get the money from the fire sale at GM? The Government and the Unions.
God Bless Your Tom Lauria