Obama, GM & The Great Power Grab
by Gene King
The news that General Motors was filing for bankruptcy was one of the biggest anti-climatic stories imaginable. Most Americans felt the fix was in. Bankruptcy was a foregone conclusion by many economists and political pundits who, at the start of the year, said that the billions of dollars being poured into the failed conglomerate was nothing more than smoke and mirrors—or something far worse: a calculated political move by a Congress and White House deeply connected to the remaining unions in the nation to grab unprecedented power over the business sector for future political gains.
The sheer magnitude and meaning of what has taken place with the federal government and GM is going to take quite a while to digest. We’re in uncharted waters of American history with a degree of federal intervention, takeover and control of American business that shatters any previous attempts by the government to interject itself in the nation’s free market. Be sure about the fact that the declared bankruptcy of GM and the announced plan for its reformation is far more than a business story. There is much more going on here. And we’ll be dealing with the consequences for a long time. Indeed, the federal government’s takeover of GM may very well turn out to be one of the watershed moments in American History that will result in more negative social, economic, labor, political and business issues than ever imagined.
The most cynical observers from a wide variety of disciplines including academic, economic and political think tanks may be correct when they, along with a growing number of politically active Americans, theorize that the economic situation of the country and the critical conditions of GM, AIG, Chrysler etc. played sweetly into the hands of Barack Obama and his administration. I for one, believe it more as every day passes.
President Obama offered "change" during his media-endorsed and enabled campaign and songs were sung by creepy Obama cultists with literal lyrics that "Obama’s gonna change the world." His oration skills sharp but seriously over-praised by a complicit media, Obama did all he could to tap the anger, disillusionment, fear and dissatisfaction of an American public well-trained in false victimization and all too eager to skirt responsibility and transfer blame elsewhere. He took millions from all those special interest groups that have deeply entrenched themselves in the Democrat Party and chief among them were unions. He demonized Wall Street, capitalism, profit and the free market as a candidate and then fanned the flames of populist hatred for all of it once elected as he spoke on a daily basis of the greed, reckless power and shady motives of the business class.
The culmination of it all was the forced takeover of General Motors. It makes perfect sense. Some will argue no American president could ever permit GM to fail and literally close shop or be bought out by a foreign competitor on his watch. That may be true. But only a president with more leftist leanings than anyone before him who has serious misgivings about free market capitalism and embraces a far-reaching, overly powerful government would do what President Obama just did.
The fading heartbeat of GM was manna from the heavens for the president and his administration. Instead of exposing and stressing that GM’s fate was the result of some of the most horrendous corporate management and union greed ever combined, it was far more opportunistic to use the company as the foundation for the broad agenda the president and his party desperately wanted to push.
With GM, the president can connect all the dots: unions, more government programs, more government power, entitlements, health care, capital gains tax, tax the ‘wealthy’, corporate taxes, move to a ‘green energy’ based economy, increase federal ownership or control in other sectors like banking, lending, housing etc.
If the company was something other than an automaker filled with Democrat union contributors located in a Democrat-filled city, region and state; there’s a good bet the president and his cronies would have been far less interested. Remember all those cries about Halliburton? It was one of the hallmark cries of the liberals during the Bush Administration. Halliburton! Yes, Halliburton was evil! Halliburton was even the reason why our men and women were fighting and dying in Iraq! Halliburton was a special interest for President Bush and especially his vice president! Halliburton!
Well, if Bush had Halliburton……Obama has GM. Funny, you don’t hear that much though in the media or from liberal circles do you? Give it time. The fallout from this historical power-grab is already beginning and it is very possible that the very serious (and some would say arrogant and reckless) gamble Obama made on GM for power is going to haunt him.
To start, the very constitutionality of it all is seriously questionable. I believe it’s inevitable that there will be those hurt by the GM situation—anyone from car dealers and workers to business partners and competitors—who will participate in the ol’ reliable American pastime: going to court. Once in the courts, the very legality of what the president did and more importantly how he did it could be the potential downfall of the administration. The closed-door behavior of the Obama Administration with GM, Chrysler, AIG etc. etc. was suspect from the start. Now, a slow but steady drip of leaks concerning these meetings and how executives and shareholders were essentially bullied into accepting terms is already coming out.
Contracts and legally binding documents were discarded. People’s rights, like those of bondholders were pushed aside so that the government and unions could grab higher ranking in reorganization. It’s all very questionable and it’s unlikely all of this will go untouched–especially if the great Government Motors experiment goes sour. There are questions already about how something so good for America means so many car dealers and affiliated businesses close shop along with many job cuts for union workers who voted for the president. And then there’s giant ironic cherry on the cake: why would the president agree to have the government takeover GM only for the company to announce that many of the cars it will offer in the future will be made in China?
And the Pandora’s Box is also just waiting to be opened once GM emerges from bankruptcy and goes back into the free-market as a government-owned entity. Let’s ask a simple question. What if the ‘new’ GM fails to sell cars? What if all the restructuring and hoopla means little in the marketplace when consumers decide to buy other brands? What then? Does the government then give GM an unfair advantage in the marketplace via tax breaks, rebates or other perks to buyers? Then what if Ford starts to get hurt by GM due to unfair business practices? Does the government cut its own throat? Does it take over Ford? You can see the dilemma which almost certainly will come.
Whether by chance or design, we are indeed witnessing a grand experiment by a president and political party holding near untouchable power. Whether good or bad, this high-stakes gamble is too large for a quiet ending. Such an extreme action will most likely have extreme consequences. In the end, the presidency and historical legacy of President Obama may very well have been written already and primarily due to the failure of an outdated and poorly run car maker to earn a profit.
Gene King is an editor and columnist at KingNewsMedia.com  You can read more of his work at www.kingnewsmedia.com.