The $114 Billion Rusty Lawn Mower; the Dog That Didn't Bark
General Motors is worth approximately minus $90 billion. That’s a negative net worth of $90 billion. Into which the president has put about $60-billion total, for 60 percent ownership on our behalf. We have traded plus-$60-billion for minus $54-billion, a net loss of $114-billion. We as investors are upside down by even more than the bankrupt carcass we’ve invested in is upside down.
To do this magical deal, Obama had to commit massive financial fraud (by lying to us and GM stockholders about the company’s certain bankruptcy while engineering it), trash federal bankruptcy law, conspire to steal bondholders’ property and rights (making it insane for anyone to invest in any corporate bonds), create ownership nearly for free for the UAW, and extort the nation of Canada. He did this all in the name of saving jobs – while the result is, in fact, massive job losses, closure of thousands of small businesses (car dealerships) and by domino effect, thousands more. Well, Obama never claimed to be a capitalist, now, did he?
The little gas lawn mower sitting in your garage that might bring $25 at a garage sale is worth $114,000,000,025 more than our stake in GM. You should incorporate it as Brokedown Lawn Mowers Inc., call up Obama, and sell him half of it for about $180-billion.
For GM to break even and not need more money from us yet this year, it must sell 10-million cars between now and Christmas. This is about as likely as Obama going a week without making a “major speech” or the V.P. going a week without revealing some inconvenient truth. Fact is, they won’t sell half that many. You mowing lawns with your little lawn mower would repay more of the $180-billion handed you than GM will be able to repay of the money we’ve dumped into it. And if you used $10 of the money given you to invest in a snow shovel, you’d be twice as viable as GM.
The president tells us GM will be in and out of bankruptcy in 2 months, 3 at the most. Another lie. GM is bankrupt and always will be bankrupt. Yes, a so-called new GM will exit bankruptcy court. But it will remain bankrupt nonetheless.
If it were just GM, we could chalk it up to amateur mistake-making and necessary learning on the job, and in the grand scheme, what’s a few hundred billion dollars anyway? But the man with the messiah complex is engaging in comparably delusional, dumb and dangerous behavior on every front at a speed never before seen in the world. Our collective national bankruptcy is inevitable. Better learn to speak Chinese.
If there are any honest men or women in the mostly in-the-tank for Obama media, they should fess up that were this a Republican President taking over defunct companies, pouring in billions, steamrolling equity holders, appointing powerful czars left and right to run confiscated corporations and even entire industries absent Congressional oversight, they would be screaming for his head on a stick. The media’s tortured-logic excuse-making for their dictator run amok is embarrassing. To his credit, Jon Stewart asked if the government might take over a profitable company or two. He mocked the government GM and AIG takeovers, but couldn’t bring himself to actually say “Obama.” Just “the government.” As if the body of the snake was somehow freelance killing, without knowledge of its head.
Obama reminds me of an old, bad, crude, off-color joke I’ll sanitize here as best I can: Guy comes into a bar with a big dog. Bartender says “You can’t bring a dog in here.” Guy quickly explains his is a uniquely talented dog – in fact, it can be handed 50 cents wrapped in a napkin and sent to the store to buy and bring back a pack of cigarettes. (I told you – old joke.) Guy demonstrates. Dog runs out, money clenched in his teeth, is back at lightning speed with the cigarettes. The amazed bartender asks if he can do it too. Doesn’t get the exact change, just hands the dog a $5.00 bill. Off goes the dog. Twenty minutes later, no dog. Forty minutes, no dog. They find him out in the alley, excitedly engaging in doggie love-making with a fluffy little poodle, the $5 bill under one of her front paws. “Sorry,” the big dog says, “but I never had five bucks before.”
He, suddenly rich with our money and credit, and drunk with power beyond anything he ever imagined, isn’t coming back with anything for us anytime soon.
We’ve handed the keys to the liquor cabinet and Dad’s sports car to a teen-ager and said “Please drink responsibly. And don’t drink and drive.” Nothing but carnage to come.
Dan Kennedy is a serial entrepreneur, adviser to business owners, sought-after speaker and author of 13 books. More information about Dan can be found at www.NoBSBooks.com, and a free collection of his business resources including newsletters and webinars at www.DanKennedy.com.