Capita-What Again?
Capitalism? Pfffft!
“You don’t need banks and bondholders to make cars,” said one administration official.
Professor Bainbridge says, “…that official — who’s probably never run any business more complicated than a lemonade stand — will soon discover just how wrong s/he was.”
I really don’t think so. See, the official was right in a totalitarian sort of way. You don’t need investors to make cars, at least not willing ones. You can simply extort the money from investors — banks, hedge funds, bondholders — by threatening to sic the press on them and disingenuously smearing them to the entire nation. They don’t have to give it to you. You can just take it from them and kick them in the teeth while you’re at it.
As we learned from the Lada, the Volga, and the Yugo, you really don’t need willing capital to make crappy cars. You can probably keep Chrysler alive for a few years, probably as many as four. Sure, it’ll wreck Chrysler, probably beyond the ability of any bankruptcy judge to ever recover, but it will be enough to get the President over the next electoral hump.
(via Stephen Spruiell, who notes that the head of GM has said that the Obama administration will not allow his company to offer bondholders more than ten percent of the company, though they are owed much, much more.)
Other Posts of Interest:
- Compassionate Conservatism Just Means Making Different People Hurt
- Get a Grip, People.
- You Know What Else Bankers Are Like? Hostage Takers!
Category: Featured, President Barack Obama, The Economy and Your Money, The Rise of the Nanny State
