Good Crises Make For Good Shake-downs

Holman W. Jenkins, Jr.: Meet the New-Old GM - WSJ.com: "What would the pre-crash GM have been worth if relieved of $80 billion in IOUs? Assume a 5% yield on GM debt and nine-to-one price-earnings ratio on the stock. The answer (for sake of argument) is $61 billion. This shouldn't be surprising. GM's progress on labor costs, quality and new models were all in the pipeline before its Chapter 11 filing. The main achievement of bankruptcy was a redistribution of rights from GM's creditors to a worrisome and conflicted new set of equity owners, namely the U.S. and Canadian governments and the United Auto Workers."

This shouldn't be surprising. GM's progress on labor costs, quality and new models were all in the pipeline before its Chapter 11 filing. The main achievement of bankruptcy was a redistribution of rights from GM's creditors to a worrisome and conflicted new set of equity owners, namely the U.S. and Canadian governments and the United Auto Workers

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Great article. Explains how, at the end of the day, the GM bailout, via government-orchestrated bankruptcy, had only one distinguishing feature from a traditional bankruptcy - it allowed the Dems to steal billions of dollars in equity from private parties and hand it to the UAW. Crony capitalism. Kleptocracy. Did I mention that the orchestrator, Rattner, has pled no contest and agreed to pay a multi-million dollar fine related to an influence peddling charge from the SEC?