I didn’t want any stock in Chrysler, but now I have some. So do you. The government is buying up Chrysler stock with our money, and without our permission. As far as I know, the constitution doesn’t give the president the right to be the forced stockbroker to every citizen in the country. Maybe I missed that part.
Anyway, here are the facts:
Chrysler is going bankrupt, but not normal Chapter 11 bankruptcy, they’re going into “managed bankruptcy“. The US taxpayer is putting up the majority of the cash, at least $12 billion, and we only get 10 percent ownership in the company. I say “at least $12 billion” because the original estimates were always way too low, so there is no logical reason to think this new estimate will be any different. Read on for more:
The UAW (United Auto Workers), the entity who helped destroy Chrysler with it’s insane contracts and shitty work practices, is getting 55 percent ownership; and the Italian company, Fiat, is getting 35 percent of the equity for some strange reason, even though they are putting up ZERO cash. Worst of all, the new directors of the company will be appointed by the Obama administration, leading to the obvious question of “what the fuck?“. It’s a little disconcerting, amirite?
And why Fiat? They are bringing NOTHING to the table, absolutely nothing. They’re not even a well run company. In 2004, Fiat had to be bailed out by GM, which eventually lost $2 billion on the deal. Am I the only one who thinks this whole mess is beyond absurd?
And just what is “managed bankruptcy”?
Well, first, what’s normal bankruptcy? Chapter 11 helps companies with a viable future reduce their debt. It’s done entirely via the courts and requires no involvement of the executive or legislative branches of government. Plus it’s Constitutional.
Now, “managed bankruptcy”… it’s the opposite of all those things. It gets the president and the legislative branch involved; the company doesn’t have to have a viable future; and worst of all, it’s not constitutional. Huzzah!
That means, most likely, Chrysler won’t be a viable company even after reorganization. So why are we paying billions for it? There are so many great, well-run auto companies out there with new technologies waiting for investors and market share. The money spent on Chrysler now is money taken away from Tesla or whomever else. I explained this all in GM’s Broken Window Fallacy.
This is basic economics.
And “managed bankruptcy” is socialism. Actually, it’s fascism. Socialism is where the government owns the means of production and the people have no property rights. Fascism is where the means of production are owned by private parties but where the government controls the actions of the companies, including who is named to run them. Wow, that’s a dictionary definition. Wow, that fits. Wow, Obama is a fucking fascist. I apologize for the curse word. Moving on.
I’m at the point where I can’t really argue anymore, I just don’t have the energy. I’ve talked about these issues before many times (Here and here, for instance), and people just don’t seem to get it. I’m ready to just hop on a seastead and live in a capitalist paradise for the rest of my life, but I’ll give it one more shot…
These auto bailouts and this “managed bankruptcy” of Chrysler should scare you, because it’s dangerously close to both socialism and fascism, and they’ve both been tried before, with disastrous outcomes. Now, if you’re tempted to comment “but real socialism hasn’t been tried“, don’t bother, because you’re an idiot.
The only system that has worked, and has produced freedom and prosperity, is Capitalism. The thing is, capitalism isn’t even an -ism. An -ism is a distinctive system of beliefs, myth, doctrine or theory that guides a society. Capitalism is more like the opposite of that, it’s the lack of any official -isms and the acceptance of all of them. It’s allowing every member of society do what they decide is right for themselves. Smoke and eat what they want, buy what they want, spend their money how they want. In a truly capitalist society, a group of socialists can get together, buy up some land, and build a socialist community complete with all their own laws and systems, including “free” healthcare subsidized by the wealthier members of that group and state run auto companies. Anyone who wants to live in that society can go live there on their own free will. In a socialist state, a group of capitalists cannot do the same thing. Capitalism is freedom, inherently. That’s all there is to the debate.