He’s kidding, right? Did I just hear Mitt Romney say, “I would do nothing to hurt the US auto industry”
Here’s the facts, ma’am:
As I reported in this week’s Nation magazine cover story “Mitt Romney’s Bail-out Bonanza“, the Romneys are in a special partnership with the vulture fund that bought Delphi, the former GM auto parts division.
[Watch our Democracy Now! report on the Romney group’s auto plant closures.]
The Romney vulture fund investment syndicate shipped every single UAW production job ”“ EVERY job ”“ to China.
Just after Nation broke the story, Washington newsletter The Hill received the Romneys admission of profiteering:
“Romney’s campaign did not deny that he profited from the auto bailout in an email to The Hill, but it said the the report showed the Detroit intervention was ‘misguided.'”
The truth? On June 1, 2009, the Obama Administration announced …more
Mitt Romney’s opposition to the auto bailout has haunted him on the campaign trail, especially in Rust Belt states like Ohio. There, in September, the Obama campaign launched television ads blasting Romney’s November 2008 New York Times op-ed,“Let Detroit Go Bankrupt.”
But Romney has done a good job of concealing, until now, the fact that he and his wife, Ann, personally gained at least $15.3 million from the bailout””and a few of Romney’s most important Wall Street donors made more than $4 billion. Their gains, and the Romneys’, were astronomical””more than 3,000 percent on their investment. …more
What the hell happened? Did Barack have a fight with Michelle? Was it nicotine withdrawal? Do really rich guys just scare you, Mr. Obama?
Dear Mr. President: As a journalist I don’t take partisan sides, but I do take America’s side. And as Commander-in-Chief, you simply cannot fall asleep in the saddle.
I mean Commander-in-Chief in the Class War. The war of the billionaires against the rest of us.
You were asked, “What is the role of government?”
You seemed stumped. Lost.
Well, here’s three, Mr. President:
1. Issue Social Security checks. Checks for cash money. Not some bullshit voucher. 2. Save General Motors and Motor City. 3. Kill Osama.
Maybe you should have written those on your palm.
When Mr. PBS Bumblebrain asked you the difference between your views and Gov. Romney’s on Social Security, you said, “You know, I suspect that, on Social Security, we’ve got a somewhat similar position.”
[Thursday February 23] Republican Presidential candidate Mitt Romney called the federal government’s 2009 bail-out of the auto industry, “nothing more than crony capitalism, Obama style… a reward for his big donors to his campaign.” In fact, the biggest rewards ”“ a windfall of more than two billion dollars care of US taxpayers ”“”“ went to Romney’s two top contributors.
John Paulson of Paulson & Co and Paul Singer of Elliott International, known on Wall Street as “vulture” investors, have each written checks for one million dollars to Restore Our Future, the Super PAC supporting Romney’s candidacy.
Gov. Romney last week asserted that the Obama Administration’s support for General Motors was a, “payoff for the auto workers union.” However, union workers in GM’s former auto parts division, Delphi, the unit taken over by Romney’s funders, did not fare so well. The speculators eliminated every single union job from the parts factories once manned by 25,200 UAW members.
The two hedge fund operators turned a breathtaking three-thousand percent profit on a relatively negligible investment by using hardball tactics against the US Treasury and their own employees.
Under the control of the speculators, Delphi, which had 45 plants in the US and Canada, is now reduced to just four factories with only 1,500 hourly workers, none of them UAW members, despite the union agreeing to cut contract wages by two thirds.
It wasn’t supposed to be quite so bad. The Obama Administration and GM had arranged for a private equity investor to provide half a billion dollars in new capital for Delphi, but that would have cut the pay-out to Singer and Paulson. The speculators blocked the Obama-GM plan, taking the entire government bail-out hostage. Even the Wall Street Journal’s Dealmaker column was outraged, accusing Paul Singer of treating the auto company, “like a third world country.”
But it worked. Singer and Paulson got what they demanded. Using US Treasury funds:
GM agreed to pay off $1.1 billion of Delphi’s debts,
forgave $2.15 billion owed GM by Delphi (which had been spun off as an independent company)
pumped $1.75 billion into Delphi operations, and
took over four money-losing plants that the speculators didn’t want.
If those plants had been closed, GM factories would have shut down cold for lack of parts.
Then there was the big one: The US government agreed to take over $6.2 billion in pension benefits due Delphi workers under US labor law.
Governor Romney, while opposing the bail-out of GM, accused Obama of eliminating the pensions of 21,000 non-union employees at Delphi. In fact, it was Romney’s funders who wiped out 100% of the pensions and health care accounts of Delphi salaried retirees.
Paulson and Singer paid an average of about 67 cents a share for Delphi. In November, 2011, Paulson sold a chunk of his holdings for $22 a share. Paulson’s gain totals a billion and a half dollars ($1,499,499,000), and Singer gained nearly a billion ($899,751,000) ”“”“ thirty-two times their investment.
One-hundred percent of this gain for the Paulson and Singer hedge funds is accounted for by taxpayer bail-out support.
But, unlike the government loans and worker concessions given to GM, the US Treasury and workers get nothing in return from Delphi.
From GM, the US Treasury got warrants for common stock (similar to options) that have already produced billions in profit.
And Delphi? It’s doing well for Paulson and Singer. GM and Chrysler, still in business by the grace of the US Treasury, remain Delphi’s main customers, buying parts now made almost entirely in China and other cheap-labor nations.
And exactly who are Paulson and Singer?
Billionaire John Paulson became the first man in history to earn over $3 billion in a single year ”“”“ not for his hedge fund, but for himself, personally. At the core of this huge payday was a 2007 scheme by which, via Goldman Sachs, he sold “insurance” on subprime mortgage loans. According to a lawsuit filed by the Securities Exchange Commission, Goldman defrauded European banks by pretending that Paulson was investing in the insurance. In fact, Paulson was, secretly, the beneficiary of the insurance, reaping billions when the mortgage market collapsed.
Goldman paid half a billion dollars in civil fines for the fraud. While the SEC states that Paulson knowingly participated in the scheme, he was not fined and denies he defrauded the banks.
Multi-billionaire Singer is known as Wall Street’s toughest “vulture” speculator. Vulture fund financial attacks on the world’s poorest nations have been effectively outlawed in much of Europe and excoriated by human rights groups, conduct Britain’s former Prime Minister Gordon Brown described as, “morally outrageous.”
Yesterday, Steven Rattner was forced to resign as Obama’s “Car Czar” – awaiting possible prosecution for bribery.
6 weeks ago, we identified Rattner as the man who designed the GM bankruptcy to benefit his banker buddies at the expense of auto workers.
Good riddance to Stevie the Rat and here’s why…
Screw the autoworkers. They may be crying about General Motors’ bankruptcy today. But dumping 40,000 of the last 60,000 union jobs into a mass grave won’t spoil Jamie Dimon’s day.
Dimon is the CEO of JP Morgan Chase bank. While GM workers are losing their retirement health benefits, their jobs, their life savings; while shareholders are getting zilch and many creditors getting hosed, a few privileged GM lenders ”“ led by Morgan and Citibank ”“ expect to get back 100% of their loans to GM, a stunning $6 billion.
The way these banks are getting their $6 billion bonanza is stone cold illegal.
I smell a rat.
Stevie the Rat, to be precise. Steven Rattner, Barack Obama’s ‘Car Czar’ – the man who essentially ordered GM into bankruptcy this morning.
When a company goes bankrupt, everyone takes a hit: fair or not, workers lose some contract wages, stockholders get wiped out and creditors get fragments of what’s left. That’s the law. What workers don’t lose are their pensions (including old-age health funds) already taken from their wages and held in their name.
But not this time. Stevie the Rat has a different plan for GM: grab the pension funds to pay off Morgan and Citi.