A quick glance at the news over the past few days gave me some potential firecracker issues. The first is regarding the pending bankruptcy of GM and the second is about our current standing in foreign affairs. Specifically, what is going to be done about North Korea and Iran?
As far back as November 19, 2009, I have been stating in this column that the auto industry bailout was a waste of taxpayer money. The inevitable was that both Chrysler and General Motors would be forced into Chapter 11 protection under the United States Bankruptcy Code. Well, I was right. Chrysler filed for bankruptcy on April 30, 2009. And, it appears that General Motors will be filing for bankruptcy in the next few days. Why?
It is very simple. Neither one of these entities could come up with a plan to satisfy the creditors. The UAW gave major concessions in both cases. Or, did it? I don’t think so. In both cases, the union would stand to gain a large amount of the ownership of the company after the concessions. In the case of General Motors, the union agreed to take a 20% stake in the company. After the Federal Government’s pre-agreed stake of 50%, that’s right 50%, the bondholders and the current common shareholders would have had 30% to split between them. No wonder the whole thing fell apart. By the way, for those of you that do not think this is all leading to socialism, I suggest you take a good look at the 50% number. If that is not central planning, I do not know what is.
The taxpayers are now faced with owning 50% of a bankrupt company or putting more money into it, to keep it afloat. I guess 19.5 billion dollars just wasn’t enough? And, what about the bondholders? All I can say is thank God I do not have any General Motors bonds.
So, six months after my initial article, the inevitable is coming to pass. General Motors will join Chrysler in bankruptcy court. And, the taxpayers and the common shareholders in both companies will be left footing the bill. In my opinion, this should have happened in November, when the only people that would have lost money in bankruptcy court would have been the common shareholders, which is capitalism. At least, you and I wouldn’t have paid approximately 25 billion dollars out of our own pocket.
In bankruptcy court the bondholders will get a little bit more than what they were promised by GM and the federal government. At the end of the day, they may get as much as 40 cents on a dollar. And, if GM is liquidated, they may get even a little more. Would that be so bad? After all, they did loan GM money?
As for foreign affairs, the situation is getting much worse by the minute. As Joe Biden said during the campaign, something is going to happen in the first few months of our presidency.” Well, that something is happening already. People outside of the United States might love Obama and may have been taken in by his celebrity standing, but foreign leaders that have it in for the United States are beginning to flex their muscle.
Both Iran and North Korea are snubbing their noses at President Obama right now and he is doing nothing about it. Meanwhile, the Taliban continues its march towards Islamabad and its nuclear weapons with nothing from the Obama Administration other than threats to Pakistan that if they don’t do something quick, we will. As each day passes, I’m just wondering how far this is going to go before the President does something? In my opinion, it had better be soon.
In just the last two days, North Korea has tested a nuclear weapon, tested another missile (this one powerful enough to reach US territory in Guam) and threatened military action to any country that tries to stop it. In fact, South Korea could be attacked based upon these threats any day now. How long will South Korea and for that matter Japan allow this to continue before they do something about it? I know that if I was the leader of Japan, I would be doing everything I could to develop a nuclear weapon as quickly as possible. For the past 60 years, Japan has relied upon the United States for defense. Well, now the time has come to put up or shut up. North Korea must be stopped one way or the other.
In the Middle East, Iran continues to develop its nuclear weapons program. Unless they are stopped, they will also have a nuclear weapon and I am sure it will be aimed at Israel. Last week, when the Prime Minister of Israel met with President Obama, this matter must have been discussed. However, Obama has not done anything. Israel’s patience should be wearing thin.
The Taliban continues to gain territory in both Afghanistan and Pakistan. The current administration better react soon. At some point, no matter how much is done; it will be too little, too late. The Pakistani government will fall and there will not only be a power base for the Taliban and Al Qaeda, there will be nuclear weapons in the hands of terrorists. In that instance, it will not be long before Afghanistan falls as well.
The only country we haven’t really heard from in the past few weeks is Venezuela. I wonder when Mr. Chavez will start flexing his muscle. Based upon the events of the past few weeks, it won’t be too far into the future.
One of my readers, who would like to be called Allen Smithee, sent me the following: “When society weakens its resolve and finds appeasement, relativism, and statism (sic) more desirable than the price of individual freedom, we are diminished. When we retreat from the transparent analysis of the Pelosi lie about the CIA, we are diminished. When we misrepresent Enhanced Interrogation Techniques (Holder now holds that the definition of water-boarding as torture depends on intent), we are diminished. When we ever decline to put America first, we are diminished. The thinking person did not need Cheney’s articulate expose in late May 2009 to tell us so. This is the clear, concise and definitional difference between 9/10 and 9/12 and yet so many need another 9/11 to experience this epiphany. How sad. So it is with opinionated cowardice, selfish pursuit of political power, hatred and ignorance. This is cowardice, far more insidious than a demagogue’s claim of America’s cowardice concerning reluctant dialogue about racism. This is a cancer on patriotism.”
To me, this says it all. As Dick Cheney stated last week, we are a different people after 9/11 and we must react accordingly. I remember watching the two towers come down. Do Mr. Obama and the remainder of his party remember the same? Is President Obama ready to flex his muscles?
As for Memorial Day, a few readers informed me that there is an HBO movie out this month based upon the death of a US Marine in Iraq. It is called “Taking Chance” and stars Kevin Bacon. Everyone should see it. There is an article at the following web site: www.blackfive.net/main/2004/04/taking_chance.html that tells the story by the man who accompanied the fallen Marine home on his last journey. Reading this article brought tears to my eyes. I think you should all take the time to read it I would like to thank Richard Stoll from Orange County, California for bringing it to my attention. This is patriotism.
In closing I would like to state that
military intervention is not always the answer, but unless the opposing party believes you will use it, you have no power whatsoever. This, unfortunately, is what all of the celebrity of our current President has done. He has convinced the world that America wants to be friends with everybody. And, we do. But, we must remember the words of Teddy Roosevelt, “Speak softly and carry a big stick.” And, I would like to add to that, “Be Ready to Use It.”
©2009 by Frank T. DeMartini. All rights reserved. Permission to copy will be freely granted upon request.