Do we really need any more examples of why the government should never be allowed to meddle in companies that just need to go bankrupt?
Oh, why not one more. From the Open Market blog:
In the 2009 deal overseen by the Obama administration’s auto task force, Fiat paid no money to acquire its initial 20 percent stake in Chrysler — only contributing some of its intellectual property, instead. Fiat would later pay $2.2 billion to raise its stake in the company to 58.5 percent.
Continuing the bailout shell game, Fiat will now pay fellow bailout recipient UAW $4.4 billion for its stake in Chrysler. All the while, the U.S. government has pitched in more than $12 billion in taxpayer infusions.
In “saving” the American auto industry, Obama gave an American company away. And he gave it away at the expense of pension funds and other secured creditors, which were given a much smaller stake in the new company than they would have been given under traditional bankruptcy proceedings. American manufacturing workers also lost out on the deal; many are now hostages to the woes of Fiat and the Italian economy.
According to Barron’s, “Chrysler’s resurgence has been so strong that it now provides a lifeline for Turin’s Fiat, which faces serious challenges in Western Europe.” Fiat and Chrysler CEO Sergio Marchionne told Barron’s: “The Fiat Group has a future because of Chrysler.” Similarly, Bloomberg reported that, “without Chrysler, the Italian automaker would have posted a first-quarter net loss” in 2012.
As the article also shows, the President gave it away at the expense of billions and billions and billions of American taxpayer dollars–my money and yours.
But don’t miss the deeper story: The real beneficiaries of our cluelessness are the Italians, whose own economic idiocy is being bailed out through our bailout. This is the only way “Progressive” economics “works”—by finding another host for it to parasitically bleed dry.
It will be horrifying and predictable to watch Bill de Blasio’s policies destroy New York City over the next decade, and raise up a new and virulent strain of organized crime to plague the city. This is the bane of Authoritarian nonsense (from the “Left” or the “Right”) which rewards the politically-connected rather than those who serve customers well.