Glenn Reynolds has renamed the Chrysler “bailout” a takeover, because taxpayer money is being used to grab an 8% stake in the company. The deal calls for that money to NOT be paid back.
And then there is this from the Wall Street Journal:
The government’s rescue plan for General Motors Corp. and Chrysler LLC has focused on financial engineering. Soon, the Obama administration and whoever is running GM and Chrysler will have to confront a more-challenging problem: how to sell the cars they want America to buy.
Anyone else remember a time when companies used to sell cars Americans wanted to buy? Now the government will figure out how to get us to buy the cars they want us to?
Through this small stake, the government will justify large doses of incentives and disincentives to induce us to buy the cars they want us to. They will use the tax code to distort the market so that we buy “green” cars (even though the batteries carry their own environmental risks that nobody likes to talk about), while the Socialist-Progressive Democrats perpetually fund UAW pensions with IOU’s to the US Treasury.
It’s a win-win for the government. They get to nationalize the pensions and force politically correct automobiles down our throats. And for what? To help the Chinese sell more batteries to the world?
Gains will be driven by strong growth in the production of lithium ion (Li-Ion) and nickel metal hydride (Ni-MH) batteries, which are increasingly being used in consumer electronics and motor vehicles.
Most of the gains will be centered in China, which has grown to become the largest battery materials market in the world.
And now the newly emerging Chrysler Zombie proudly proclaims:
Chrysler Forecasts Profit — In 2012
In documents presented to the court, Chrysler revealed it lost nearly $17 billion last year but predicted it can return to profitability by 2012
Well, bully for you! Your state-sponsored enterprise will magically be profitable by 2012, and all it’s costing us is a cornerstone of our free-market economy. What a great deal.
Now on to the next cornerstone. It should be a real treat to see how the Obama Administration writes the rules for the BofA bailout that now seems imminent.
Regulators have told Bank of America Corp. that the company needs to take steps to address a roughly $35 billion capital shortfall based on results of the government’s stress tests, according to people familiar with the situation.
Will the Obama administration use “stress tests” to force more bailouts takeovers of US banks?
Steve- If you look closely, you will see that we already link to your site in our blogroll, as we have since the last time you asked. So please feel free to link from yours if that is what you have been waiting for.
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