The intent of the bailout, according to our government, is to provide stabilization of GM in order to protect thousands of job losses and protect automotive suppliers from financial disaster, all in an effort to protect from collapse our nation’s economy.
Sounds noble, doesn’t it?
As we know, President Obama and his financial team pressured GM to oust and replace its CEO. Apparently board members are soon to be escorted to the door as well.
Obama, a learned historian of President Lincoln, may be mirroring similar acts of the magnitude during Lincoln’s presidency and his era’s version of a national crisis—the civil war and the south’s intent to secede from our Union.
Could Obama be violating our constitution to protect our Union during this national crisis as did Lincoln?
At the initial stages of GM’s plea for government bailout monies, GM’s mantra to our legislature was clearly their imminent financial collapse.
Here’s my problem with the whole process:
The Federal Court provides a remedy for businesses in financial distress. We all know that remedial provision: Bankruptcy. Why wasn’t GM told to take advantage of that remedy?
GM argued that plunging the company into bankruptcy court would raise immediate cessation of consumer confidence in GM, thus creating further damage to the company.
Since the government announced their intent to back all GM new car warranties, the bankruptcy option is now being carefully broached to potential consumers. My prediction is that, once the shock of a GM bankruptcy option wears off, then GM will file.
Why didn’t GM use this option from the inception of their plea for help? And why, with the talk of a controlled and fast-tracked bankruptcy proceeding, would GM be allowed to receive special consideration under the bankruptcy rules that could affect bondholders, shareholders and creditors rights under the bankruptcy code that otherwise they would not be subjected to?
While observing, keep your focus on existing law, how our government is suspending those provisions, and the constitutionality of government action during this crisis.