What would you call this, I wonder?
Under terms of the draft legislation, which continued to evolve Monday evening, the government would receive warrants for stock equivalent to at least 20% of the loans any company receives. The company also would have to agree to limits on executive compensation and dividend payments, much like those contained in the government’s $700 billion rescue of the financial industry.
In the case of General Motors Corp., such a move could give the government a large stake in the company and may hurt existing shareholders. GM is seeking about $10 billion in short-term loans and has a market capitalization of about $3 billion.
I can think of a few words.
Stupid would be one. Loaning $10 billion to a company worth $3 billion in exchange for stock worth $600 million is… well, it’s not smart.
Nationalization would be another. Fascist is a good one too.
Stupid is my first choice. It’s the kind of stupid that’s contagious.
… the United Auto Workers union is seeking to attach strings to any concessions it makes for the Big Three. Marc McQuillen, president of UAW Local 2404 in Charlotte, N.C., said the union is looking for an equity stake in GM and likely a seat on the company’s board.
Why would the union want this? It’s like the waiters demanding the right to go down with the ship. Equity stake in what?
Forty-five percent approved and 44 percent were opposed, according to a CBS News poll released Monday. Nearly six in 10 Democrats favored the aid, while nearly the same share of Republicans opposed it.
About seven in 10 said the government should have a say in managing the companies if taxpayers provide assistance, and nearly as many said requiring more alternative fuel vehicles should be a condition of such aid. (emphasis added)
This is the plainest idiocy. We should require them to build cars that people will buy, not require them to build cars that make us feel all warm and gooey inside.
Like I said, it’s the kind of stupid that’s contagious.