Government Investor

What's the quickest way to stifle the creativity and ingenuity required to make a business successful? Place a large chunk of the ownership in the hands of an investor who takes no part in the day to day operations of the business. How can you make that scenario even worse? Let that ownership fall into the hands of the government.

Obama backs Chrysler bankruptcy as wise move

Obama thinks it's a good idea to send Chrysler into Chapter 11 bankruptcy and let the government use $8 billion of taxpayer money to take a large financial interest in Chrysler. I feel kind of like I'm being robbed at gunpoint here (metaphorically of course). I would never, in a million years, invest my hard earned money in American car companies who are so totally controlled by unions that they are no longer competitive with foreign car manufacturers. People can complain all they want about Americans who don't buy American-made products, but I for one will spend my money on better products that happen to be cheaper. However, I don't have a choice here. Obama is taking my hard earned money and forcing me to invest in Chrysler. Just like he forced me to invest in overseas abortions. Mark my words, this will come back to bite him.

But even more intriguing is this quote from the President himself:

"No one should be confused about what a bankruptcy process means," Obama said. "This is not a sign of weakness but rather one more step on a clearly chartered path to Chrysler's revival."

Now wait a minute here. This company cannot make enough money to pay its secured creditors off, so it's filing bankruptcy so it can screw its creditors out of money rightfully belonging to them AND it's taking on $8 billion in government aid...just to live to fight another day. Mr. Obama, I'm not exactly sure what your definition of "weakness" is, but I think we have a vastly different understanding of what that term means.

Finally, Obama is blasting some of Chrysler's secured creditors for not applauding the Chapter 11 filing. He says they were "holding out for the prospect of an unjustified taxpayer bailout." You bet they were because that was the only way they were going to get their loans paid back. Anyone who knows anything about the bankruptcy process knows that bankruptcy creditors get pennies on the dollar for their claims...even the secured creditors. If you invested a million dollars in a company expecting to get a million and a half back after interest on your investment only to find out the company is filing bankruptcy and you're only going to get about $300,000 back, wouldn't you hold out for a better deal?

Obama is setting a very dangerous precedent in allowing the federal government to take over private companies. If these companies couldn't survive on their own, what in the world makes him think they'll survive just because their getting government funding? Weak companies fail for a reason. The wisest course of action is to let them fail allowing stronger businesses to come to the forefront.

And finally, if you believe for a second that the Obama administration is going to take a hands-off approach in this deal, you are inexplicably naive. He even said in the article that Chrysler has failed because it hasn't moved quickly enough to adapt to the future. What he means is Chrysler hasn't adopted his meaning of future which places a hefty premium on fuel efficiency. Everyone appreciates fuel efficiency but history has proven people won't buy a piece of crap just because it gets 50 mpg. If the government forces Chrysler to make cars that no one wants, this "bail out" will mean absolutely nothing and he will have wasted another $8 billion in taxpayer dollars. But hey, he does excel at wasting taxpayer dollars. It's just going to be interesting to see how he blames this one on President Bush.