President George W. Bush's last mistake as he left the White House was his decision to use TARP funds -- under what authority no one knows -- to keep GM and Chrysler afloat until the Obama administration could come in and decide what to do.
It appears as though the Obama administration is going to use the power of the government to reward the AFL-CIO to the detriment of GM shareholders. CNBC's Larry Kudlow at National Review Online:
The government is about to take over GM in a plan that completely screws private bondholders and favors the unions. Get this: The GM bondholders own $27 billion and they’re getting 10 percent of the common stock in an expected exchange. And the UAW owns $10 billion of the bonds and they’re getting 40 percent of the stock. Huh? Did I miss something here? And Uncle Sam will have a controlling share of the stock with something close to 50 percent ownership. And no bankruptcy judge. So this is a political restructuring run by the White House, not a rule-of-law bankruptcy-court reorganization.
If someone can explain how the math works out in some sort of fashion that appears the least bit fair, I'd appreciate knowing.