GM & Citigroup: The Fox is in the Henhouse

“You never want to have the government involved in your business. They’re not businessmen; they’re bureaucrats. They don’t understand capitalism, they don’t understand the profit motive and they don’t understand the financial industry.”

This published on the very day that the President of Government Motors - the Omnipotent Barack Obama - is announcing the "final" details of GM's "bankruptcy."

The author of these words of warning is one Philip Orlando, a guy who manages over $410 billion worth of investments on Wall Street. He's actually talking about the impending demise of Citigroup as a private entity as it appears the federal government will do for it what it is now doing for GM.

The rest of America's financial giants are running away from government control as if it were the fiery coals of hell. Citigroup, a once mighty financial powerhouse crippled by bad investment and lending decisions, and thanks to its acceptance of government "help" now a stock pariah, is stuck to the TARP "tar baby."

Alas, poor Citigroup, we knew ye well.

But back to Government Motors. The situation is so bad that even Ralph Nader can't stomach it:

Today's bankruptcy declaration in federal court by General Motors is an avoidable, crude weapon of mass devastation for workers, dealers, auto suppliers, small businesses and their depleted communities. For GM's voiceless owners -- the common shareholders -- it is a wipeout.

The proximate cause of the bankruptcy was supposed to be the inability of GM and the government's auto task force to reach an accommodation with GM's bondholders. But late last week, the bondholder problem was moving toward rapid resolution, and was clearly resolvable. Why then are GM and its multibillion government financier proceeding with bankruptcy?

The bankruptcy and the GM restructuring plan are the product of a secretive, unaccountable, Wall Street-minded government task force that assumed power because of a Congressional abdication of historic magnitude. By all rights, the restructuring plan should have been submitted to Congress for deliberative review and decision.

What Ralph misses is that this Congress is nothing more than a rubber stamp for President Obama's socialist sledgehammer. Nothing would change, except the opportunity for Congress to grandstand and tell the American people how much they love the One and how great this new plan is.

But Nader's conclusions are sound. Hundreds of thousands of jobs will be lost, if not more. Union workers will not be in the driver's seat of this new company, but they will be the muscle the government-picked "team" will use to enforce its cock-eyed ideas.

It is too late for the proper resolution to GM's problems: a real bankruptcy, not this government-imposed sham that destroys a once proud company. A real bankruptcy where a judge would have acted to protect the interests of the bondholders, the stockholders and the workers would have let GM start anew without its new federal overseers. This government not only does not understand capitalism, it can't abide it. It wants to redirect "profits" without understanding that they have to be reinvested or a business fails. And all they need to know about financing is that you and I will quietly pay our taxes so that they can keep on truckin'.

As goes GM, so goes America?

Pray that it is not so.