Obama Views Chrysler Deal as a Vehicle to Achieve Social Change

by Rush Limbaugh

In the previous hour, we were discussing the hapless and comical -- I'm still amazed that late-night comics can't find anything to laugh about or make jokes about in this administration.  This whole Supreme Court nomination thing is one giant joke!  As they've gotta find all the check boxes here, some candidate that fills out every requirement Obama has, and the last requirement on the list is they know anything about the law.  They gotta be female, they gotta be pregnant, they gotta be a single mother, gotta be poor, gotta be disadvantaged, gotta be Hispanic, gotta be Muslim, gotta be Asian, gotta be whatever.  We played a sound bite in the last hour of Tavis Smiley being interviewed by Joe Scarborough, who is a friend of mine.  I like Scarborough.  But he asked a question, he said to Smiley, "Don't you think that African-Americans would like to have somebody on the court that reflects the majority view in the black community?"  Why don't we ever ask the question, "Should maybe we get rid of Ruth "Buzzi" Ginsburg?  Don't you think Christians need a woman on the court to reflect their views?"  Why don't we ever get that question?  You know, a lot of Italians don't like Scalia.  We maybe need to get somebody like Tony Soprano on there who is more like some Italians. The way these people look at things is just incredible.  They would never ask the question about Ruth "Buzzi" Ginsburg, but they ask it about Clarence Thomas.  So I'm sure George Stephanopoulos has told Obama who he supports in one of those conference calls that he participates in every morning with Rahm Emanuel, The Skull, Paul Begala, and James Carville, Serpent Head.  I'm sure they've made their picks known.  We don't know what they are, but we'll find out at some point.  Now, it's interesting here, ladies and gentlemen, that the same process that Obama is using to fill nominees on the basic level of court systems, the circuit courts and Supreme Court, it's not about judges who know the law; it's about judges who feel.  If you look at the Chrysler bankruptcy that was literally crammed down everybody's throat yesterday by President Obama, you find perhaps the same philosophy.  Let's not do what's best for Chrysler.  Let's do what's best for those who are disadvantaged at Chrysler and who's that, that's the unions!  Now, I'll tell you, there are people, even the New York Times today, the lenders Obama decided to blame.  I mean this has caused a lot of people to have rancorous objection and reaction to what Obama did yesterday.   For example, "Peter A. Weinberg and Joseph R. Perella are part of a band of Wall Street renegades -- 'a small group of speculators,' President Obama called them Thursday -- who helped bankrupt Chrysler.  That, anyway, is the Washington line. ... But now the two men, along with a handful of other financiers, are being blamed for precipitating the bankruptcy of an American icon. As Chrysler's fate hung in the balance Wednesday night, this group refused to bend to the Obama administration and accept steep losses on their investments while more junior investors, including the United Automobile Workers union, were offered favorable terms."  I told you, explained all this yesterday.  This is like how it's done in Argentina.  The bondholders get the shaft, the banks get the shaft, and the union owns the company.  "In a rare flash of anger, the president scolded the group Thursday as Chrysler, its options exhausted, filed for bankruptcy protection. 'I don't stand with those who held out when everyone else is making sacrifices,' Mr. Obama said.  Chastened, and under intense pressure from the White House, the investment firm run by Mr. Weinberg and Mr. Perella, Perella Weinberg Partners, abruptly reversed course. In a terse statement issued shortly before 6 p.m. Thursday, Perella Weinberg Partners announced it would accept the government's terms." Now, listen to this next passage in the New York Times.  "Whatever the outcome, this bit of brinkmanship," on the part of these two guys, the hedge fund as they were called who wanted to hold out, they were being told to cash out at 20 cents on the dollar.  Now, these people hold investments of average people.  It's not these two guys single-handedly putting their own money into Chrysler and extending debt to Chrysler.  It is people who invested with them.  So it's not just these two guys that are going to lose; it's everybody who invested with them, and yet they are portrayed as the villains!  "But whatever the outcome, this bit of brinkmanship -- which many characterized as a game of chicken with Washington -- has become yet another public relations disaster for Wall Street."  How about a PR disaster for Chrysler?  A public relations disaster for Wall Street.  The only reason it's a PR disaster for Wall Street is because that's what President Obama wanted the perception to be by singling them out, tarring and feathering them publicly yesterday was unnecessary.  He did not have to do it.  President Obama had his little hissy fit.

Now, let me explain this, you get into finance and it gets convoluted, but it was clear that Obama favored the UAW at the expense of the bondholders.  There's no question, 'cause they got 55% of the company, folks.  He insisted that the bondholders settle for pennies on the dollar.  The bondholders are the private sector here.  Many of the bondholders, not all, but many of them were the big banks and these hedge funds, these Perella Weinberg Partners here that you've heard besmirched.  The big banks went along with what Obama demanded, but the small majority of hedge funds did not.  The bond holders committee representatives from Citigroup, Goldman Sachs, J.P. Morgan Chase, Morgan Stanley, Oppenheimer Funds, Perella Weinberg Partners, Zeron Funds, so forth and so on, the big banks went along, the hedge funds held out.  And Obama accused them of holding out for a bailout.  They were not holding out for a bailout, they were holding out for a proper return because they were carrying Chrysler debt.   So here's the money question.  Did the big banks decide out of the goodness of their hearts to go along with Obama and settle for pennies on the dollar, or did they do it -- there's three possible reasons.  They did it out of the goodness of their hearts; they did it because TARP money was sent to them under the table to cover their losses.  We'll never know if that's the case, but it's a good bet.  Maybe they didn't suffer losses.  Maybe the big banks didn't really -- remember, those guys all voted for Obama.  Public assumption is everybody took a bath and that's what makes the deal fair.  Everybody sacrificed, except the UAW, Obama's real friends.  The third possibility to explain why the big banks rolled over is they're just scared to death because the Obama administration, Treasury department, has their future in his hands.  So, of the three possibilities, goodness of their hearts, they got secret slush money under the table from TARP, or they're scared to death because the Treasury department holds the future right in their hands.  I vote option three.  I vote that the big banks rolled over 'cause they're scared to death because wherever I go, I don't care who I interact with, they're scared to death of this administration.   There is genuine fear of the government from average Americans buying up guns and ammunition like they never have before, to people on Wall Street, to big businesses, there is abject fear.  So I vote for number three.  We'll never really know.  What we do know is that Obama got angry at the holdouts.  What we have here is a new Fairness Doctrine, the Obama Fairness Doctrine.  Didn't need Congress, didn't need the courts for this.  It's not about radio, it's about everything.  Here's the scenario.  Obama listens to all sides, and all sides end up thinking Obama understands and agrees with them.  Obama, after listening to all sides, then plays Solomon and pronounces what's fair.  And if you don't accept his fairness -- he-he-he -- you are dispatched to Messiah Park, not Fort Marcy Park, you are dispatched to Messiah Park.  Sure, of course the listing is just an exercise.  He's got his mind made up.  He brings these people in the room just to do a snow job on them to make them think they've got a chance at changing his mind.  That's why he had dinner with the conservative columnists.  It's all for show; it's all PR.  This guy is a committed ideological, liberal leftist who's putting on a show for everybody.   I told you in December the UAW was going to get this company and return the nation's wealth to its rightful owners.  And this is exactly what's happened.  But there are also consequences to leftism, liberal, when you do things.  Here's a story out of the St. Louis Post-Dispatch.  It is a gold mine of information, actually pretty good reporting.  It's by Angela Tablac.  Angela, I don't want to ruin your career by praising you, I know that's a possibility here, but it's actually a good job of reporting.  A quote from the story:  "The thing Obama does not control yet is if the consumer buys their vehicles," meaning after all of this is done, the one thing that hasn't been taken into account in any of this, is there anybody who knows how to build a car now at Chrysler that people are gonna want to buy?  And what we know is that the people Obama's put in charge here have never had that job, they've never had that responsibility from his car czar team to the union.  But this story is about all of the unemployment that's going to happen in the St. Louis area as a result of the bankruptcy.

Obama's yesterday talking about all the jobs he saved.  This story is about the plant closings in the St. Louis area and the jobs that are going to be lost.  Chrysler plans to permanently close Fenton, Missouri's pickup assembly plant, there are two of them there, about a thousand people work there, and the mini-van plant.  That was idle last year by the end of 2010 as a part of a broader plan to unload excess manufacturing facilities.  For the second time in its 84-year history, Chrysler has hovered near bankruptcy.  To help Chrysler, the federal government agreed to give it up to $8 billion in additional aid and to back its warranties. I'll tell you, that's something else.  The bondholders, here's the government passing out $8 billion, and the bondholders, the ones that hold the legitimate debt, get none of it, they get the shaft 'cause they're Wall Street, and Obama loves the New York Times writing about this as another PR disaster for Wall Street.  That's the nation's wealth. The federal government in this deal also promised the UAW that it will protect workers, retiree health care benefits during the bankruptcy.  The union gives up and sacrifices nothing, other than some of these jobs that are being lost, in St. Louis. They're not going to resolve the legacy costs.  Nobody's intending to resolve the legacy costs.  You mean the in perpetuity payment to people who have retired of health care benefits and pension? At some point it will be off-loaded and Obama will take it over at the federal government.  But basically what you have here, the investment bankers stood up against a deal that shafts them royally.  Obama went out and smeared them publicly, and they caved.  And that's reported as a PR disaster for Wall Street.  Now, since all of those who made out in the deal agree these guys are going to lose in court should they go, even those involved in negotiations see little upside in fighting.  There's a zero chance this group will be able to get anything more in bankruptcy court, given that 90% of the lenders are lined up against them, the hedge fund people.   Washington Post: "Obama Vows Swift Overhaul As Chrysler Enters Bankruptcy."  Negotiations dominated by banks who are at the mercy of government.  That's option three as to why the big banks rolled over.  So who owns the company at the end of the day?  Says it right here.  "The new majority owner will be Chrysler's union retiree health fund, which would receive a 55 percent stake in the new company. Fiat would get a 20 percent stake, with its share potentially rising to 35 percent over time based on performance. The United States would take 8 percent, while the Canadian government, which is also providing financing, would receive 2 percent." But Chrysler's UAW union retiree health fund is the proud new owner of Chrysler when this is all over at 55%.  "Those negotiations had been dominated by four large banks that own 70 percent of Chrysler's debt -- Goldman Sachs, Citigroup, J.P. Morgan and Morgan Stanley. Each has received government bailout loans through the Treasury's Troubled Assets Relief Program." They said they'd be glad to cave 'cause their future is in the hands of Tim Geithner, Treasury department, and Barack Obama.