RUSH: In a few short minutes, the president of the United States, Barack Peron, will announce his Argentinean-like takeover of Chrysler. Yeah, we don’t hear much about Juan Peron anymore, we hear about Evita. What’s happening to Chrysler today the president’s going to announce it according to the schedule in four minutes, right outta Juan Peron’s playbook. Left-wing fascism coming out for Chrysler. Hey, folks, great to have you with us. It’s EIB Network and El Rushbo at 800-282-2882.
I did not watch it last night. I did not watch the press conference last night. I’ve heard all about it. I’ve seen it, I didn’t watch it. I had to veg last night. I got an hour-and-a-half of sleep the night before, and I went home, I watched a movie, I watched Lost, and then I crashed. I forgot the president was even on. I heard all about the enchanted question, and that’s what happens with the feminization of our culture. There was a New York Times question, some enchanted question. Yeah, we’ve got the sound bites from it and so forth.
The Chrysler bankruptcy is going to be announced in mere moments, but that just sets the stage for what’s coming. Now, it’s being portrayed as a legal bankruptcy rather than a political one, but I’m not so sure.
RUSH: There’s the president now. He’s announcing what’s going to happen. We know what’s going to happen. I’ll tell you here in mere moments exactly what this is, as president Barack Peron announces what’s going to happen to Chrysler. This bankruptcy today for Chrysler took place after how many billions of dollars in bailout money? What did we give Chrysler, 10 billion, 15 billion? I get them sometimes confused with General Motors. But the point is what does this prove? We gave them billions; we gave them multiple fortunes to bail Chrysler out, and what’s happening today? It wound up in the same place. It didn’t work! That was your money, folks, that’s down the rat hole. That was your taxpayer dollars, whether it’s today’s dollars, printed dollars, taxed dollars tomorrow, or what have you, it’s money from the private sector that’s down the rat hole ’cause it didn’t work. What this means is that the laws of economics cannot be changed. Liberalism is a failure.
The way to look at this today, the president announces what’s happened to Chrysler, this is a huge Barack Obama failure. Well, actually, at the end of the day it’s a dynamic success for Barack Obama. This is precisely what he wants to happen. The United Auto Workers ending up with majority control of this company. But in terms of the way he sold this, only the government can do this. Remember, only the government can save these companies. Only the government can save our economy, only the government. Well, this is on his head now. He set up the committee to prevent what’s happening today, the bankruptcy of Chrysler. He set up the committee to prevent it. He supported billions of dollars to subsidize Chrysler so that this would not happen. Last night in the press conference he all but took credit for preventing this and yet today here it is happening, crashing down on his head. So, from the standpoint of what Barack Obama told the people of this country, this is a failure, from the standpoint of what he secretly always wanted to accomplish, it’s a huge success. From the standpoint of telling us what he was going to do, this is gonna save the auto business, we had to do this, only the government could do it. It’s not being saved, is it? Standard old bankruptcy is what’s taking place right now, controlled by the government.
So this is a huge President Obama failure. We were told this was going to save Chrysler, and it hasn’t. Now, you may be wondering, ‘Why are you calling him Barack Peron?’ Well, I’ll tell you, because this Chrysler deal is reminiscent of Peronism, Juan Peron of Argentina. It’s classic, undiluted Juan Peronism. You intimidate lawful debt holders into surrendering their legitimate claims in a bankruptcy, i.e., the bondholders. The same thing is going to happen at General Motors. The bondholders, private sector investors have $27 billion in bonds, UAW has $10 billion in bonds, but the UAW is going to get 39% of General Motors. In the case of Chrysler I don’t know what the breakdown is in terms of the bondholders, what percentage they own versus the union and its percentage of bonds, but the lawful debt holders, the private sector debt holders are being intimidated here into surrendering their legitimate claims in the bankruptcy because, it just can’t work, it’s good money after bad. We tried, we tried. We said, how many, 10, $15 billion. We tried. We failed. It didn’t work. But we can’t let this company go south; it’s the auto industry, and so forth.
So, after you intimidate lawful bond debt holders, the bondholders into surrendering their legitimate claims in the bankruptcy — by the way, to illustrate this again, during the beginning of this so-called crisis in the automobile sector, when bankruptcy was first suggested and proposed, do you remember what the initial rejection to it was? There were two. ‘Who’s going to buy a car from a bankrupt company? Nobody’s going to do that. Plus the bondholders would get killed. The company wouldn’t survive the bankruptcy and the bondholders, the private sector would get killed,’ remember? That’s what happens in a bankruptcy, you’re basically telling your creditors (blowing a raspberry), ‘We’re outta here, we’re going to reorganize. You may get some back but certainly not all of it.’ So that is what precisely has happened here. The lawful debt holders have been intimidated into surrendering their legitimate claims in a bankruptcy. The next thing you do, right out of the pages of Juan Peron, you force state-owned banks — and we have state-owned banks, don’t we, now? Notice the bankruptcy is happening after the bank takeovers, after nationalization of a certain percentage of some banks. Isn’t it interesting the timing here? So you force state-owned banks — you don’t have to force them because they’re yours anyway — and these state-owned banks, and they’re the big lenders to Chrysler over the years, you force them to give up most of their claims in a bankruptcy, ’cause you gotta save the company. I mean, that’s the bottom line, gotta save the company for America.
Then after you have forced the lawful debt holders to surrender their claims and the state-owned banks, the big lenders, to give up most of their claims in a bankruptcy, then what do you do? You hand the company to your union allies. Fifty-five percent of Chrysler today will be owned by the United Auto Workers. Now, many Americans do not recognize this pattern, because we don’t see this pattern in this country. This method of bankruptcy and of saving a company by basically turning it over to people who have hardly any investment in it, the United Auto Workers, at the result of an iron fist from the state, i.e., Barack Obama, this is so far outside the American political spectrum, business spectrum, people can’t get their arms around it because they’ve never seen it before, and they probably don’t know what Juan Peronism is, they may not even know who Juan Peron is. They know who Evita Peron is, they think it’s Madonna and they think she was great.
So if the supreme leader, Barack Peron, succeeds in a lot of this, then we are taking a page out of another dictatorship in our hemisphere, no less, and that would be Argentina. But the thing to remember, if all of the bankruptcy stuff confuses you, and if the Juan Peron stuff — by the way, it’s accurate and legitimate — but if all that confuses you, the thing to remember here, I want you to go back to the end of last year, we were told during the transition and when Obama first assumed office that these bailouts were the only way we could save these companies, these car companies. We had to do this. The government was the only institution that could do this. And then after they gave them the money, Barack Obama’s car czars told them how to run the company. You gotta do this, you gotta do that, you gotta pass tests, you gotta give us your reorganization plan, you’ve got to tell us how you’re going to run the company. And what happened? It didn’t work. That’s what you have to realize, after pouring in 10, 15, whatever it was, billion of your dollars with directions from Washington on how to save the company, it didn’t work.
Political solutions to business problems do not work. The UAW, yeah, take it over, the UAW has a plan. Here’s Obama supporting Chrysler’s effort — they’ve got no choice! Chrysler has no choice, whatever Obama told him to do, whatever his car czar, Steve Rattner and the rest of the boys told Chrysler they had to do, they did, but they failed. In their original promise to us, in their original claim of how this was all going to work out, they failed. A Barack Obama failure. However, for Barack Obama the president, this end result is a huge success. But it is a failure in the context of what he told us would happen and how the federal government’s assistance would save this company.
RUSH: My friends, if you will indulge me, I want to go through this briefly again. President Obama just concluded his news conference, announcing the bankruptcy procedure for Chrysler. Some of our stations might have carried it live, and so I want to do my own national rebuttal again, for those of you who did not hear the opening of the program because perhaps (I don’t know how many did) your local stations carried the Obama announcement with the car czar team standing behind him at a new location in the White House. He said that Chrysler just didn’t move fast enough. They just weren’t moving fast enough here, and somebody had to step in, and we’re much better off than we were 30 days ago.
Folks, here’s the bottom line — and again, please indulge me if you just heard this. I’ll go through it very quickly. Last year when these car companies ended up in huge trouble, it was Barack Obama who told us only the government could fix them; only the government could save them. We had to give them bailouts. We had to bail them out, and that’s what was going to save ’em, and when we bailed them out we then — well, not ‘we,’ but the Obama administration — gave them instructions. Remember, they couldn’t fly their corporate jets into town to make their case. After they did that one time they were humiliated. They had to drive to down for the second round of hearings.
They had to tell Congress, they had to tell Obama what they were going to do to save their companies after they got all their money, and if they did that, these bailouts would work. What we have here is an abject failure of government saving a business. This is totally not an accident reported this way. This is a Barack Obama failure. As promised, government cannot overcome the laws of economics. This was not technically a failure from Obama’s standpoint because he got what he wanted. He got the United Auto Workers as the majority owners of Chrysler, and pretty soon a similar situation’s going to happen with General Motors. So he sends out all the money to them. He gives them instructions: ‘Come back with a plan for your reorganization that we approve of.’
They never had a chance because he wasn’t going to approve any of it because what he wanted was what happened today, and it’s straight out of Juan Peron. It’s straight out of Argentina. You intimidate lawful debt holders, the bondholders into giving up their legitimate claims in a bankruptcy. Do the same thing to the state-owned banks. Obama owns a lot of the banks now, or a portion of them. He leans on them. The banks are the big lenders to Chrysler. He tells them to give up their claims in bankruptcy. The government runs the bankruptcy for 60 days. They’re going to funnel another $8 billion into this. So whatever it is, 10 or 15 billion that Chrysler’s got now, another 8 on top of it, did not save the company. What it ended up doing was turning the company over to Barack Obama’s union allies.
You hand the company to the supreme leaders, labor union allies. You don’t recognize this because this is not the way things have been done in America before. It’s not been done in American business. This is outside the American political spectrum, and so there you have it. This is the objective. I made this prediction back in December that the autoworkers were going to be the majority owners in these companies. In the case of Chrysler, it will now happen — and it was announced today as some great success story by President Obama. He said, ‘We did this. This worked. This is great. These companies have been better than they’ve ever been before. We saved them. This is tremendous, and we’re going to have the best cars in the world again. They just weren’t moving fast enough for me; it’s why I had to move in today.’
RUSH: Going to start in Detroit. Ken, you’re up first. Great to have you today on the EIB Network. Hello.
CALLER: Yeah, Rush, I’m calling as a former UAW member. And my comment was, considering that the unions don’t believe in profits, and considering that the unions do not believe in employee incentives for hardworking people to make more than lazy employees, allowing the government and the UAW to run the auto industry is like letting a fox run the chicken coop.
RUSH: This is interesting you bring this up because the union does believe in earning extra money with overtime, but, you know, merit pay, they’re not really for that, because it will make others who are not seeking merit pay look bad. But one of the questions I’ve had, the United Auto Workers with 55% ownership of Chrysler stock is going to have a majority of people on the board. What is the next contract negotiation going to look like between the UAW-owned Chrysler and the United Auto Workers line assembly workers?
CALLER: Well, Rush, what you have to keep in mind is that the way the unions work, is that they encourage their employees to be as nonproductive as they can, therefore the company has to hire more people to do the job. That’s like having four people to do the job of one.
RUSH: Now, it’s a pretty big leap here for you to — I know that that happens, I’ve had my run-ins with the bricklayers on that way, way, way back, I know that happens, the bricklayers had to back off when I made that claim, they wanted less bricks laid per hour, per day, in the next union contract, late eighties or seventies. Anyway, for you to say the autoworkers do not believe in profits.
CALLER: That’s correct. The reason I know this is that not only had I been involved behind the scenes with the UAW, but I grew up in a household where my father for 40 years actually was a high-ranking union official, and this is where I learned that the union philosophy is to get more people in. And if that means that you work as slowly as you can, therefore the company has to get more people hired to do the job, this is the way they do business.
RUSH: All right, but we need to separate things here.
RUSH: Union leadership is one thing. The union rank-and-file, many of them, are like everybody else. They’re sheep, they’re followers, and many of them don’t have any choice in terms of where their donations are spent politically and so forth. But are you telling me that there’s no understanding anywhere that a company where a union is employed has to show some kind of profit just to stay in business?
CALLER: Well, Rush, if someone comes in and he is self-motivated, he’s motivated, but what happens is you have a lot of people that come in that are unfortunately on the lazy side of it, and they’ll come in, they’ll punch in in the morning, they —
RUSH: No, I understand — so you’re saying indirectly, indirectly, they’re not concerned with profit, they’re going to get paid regardless. All right, I get it. I still think it’s going to be comical or has the potential to be comical to watch United Auto Workers’ board, majority owners of Chrysler negotiate with the United Auto Workers line assembly people.
RUSH: We have some sound bites here, President Obama announcing the end of Chrysler as we know it. Here’s the first of three sound bites.
OBAMA: Today I am pleased to announce that Chrysler and Fiat have formed a partnership that has a strong chance of success. It’s a partnership that will save more than 30,000 jobs at Chrysler and tens of thousands of jobs at suppliers, dealers, and other businesses that rely on this company. It’s a partnership that the federal government will support by making additional loans that are consistent with what I outlined last month. As part of their agreement, every dime of new taxpayer money will be repaid before Fiat can take a majority ownership stake in Chrysler.
RUSH: Well, I don’t know when that’s going to happen, then. The United Auto Workers are going to be the majority ownership of Chrysler. The union is getting 55% of the stock here. The thing you have to remember about this is, very simple, last December, January, all this money to the automakers, Chrysler, General Motors, and they were given requirements, ‘You gotta get back to us reorganization plans if you want more money.’ And finally, they had to say it didn’t work, Obama is saying you guys aren’t doing it right; we’re going to make you go into bankruptcy. So all those billions in bailouts didn’t work, a genuine failure of the Obama administration to save Chrysler. So now we’re getting basically Juan Peronism, you convince the legitimate debt holders to give up much of their value, the banks, the big lenders, same thing, and then you send in union allies to take over. Here’s sound bite number two.
OBAMA: A group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer funded bailout. They were hoping that everybody else would make sacrifices and they would have to make none. Some demanded twice the return that other lenders were getting. I don’t stand with them. I don’t stand with those who held out when everybody else is making sacrifices.
RUSH: Now, you just have to laugh. This is another assault on the wealthy. It’s an assault on hedge funds. Hedge funds are the villain. And furthermore, he is now impugning their motives. They were hoping everybody else would make sacrifices and that they would have to make no sacrifices. Some demanded twice the return that other lenders were getting? Since when does any of this have any relevance once the federal government moved in with bailout money and with orders and instructions to the CEO on how this thing is to be restructured. This is classic statism, an authoritarian figure dumping on the private sector at every opportunity, to mischaracterize their motives, to mischaracterize the reasons for the investment in things. Here’s the third sound bite from President Obama.
OBAMA: That’s why I’m supporting Chrysler’s plans to use our bankruptcy laws to clear away its remaining obligations so the company can get back on its feet and onto a path of success. This process will be quick. It will be efficient. It’s designed to deal with those last few holdouts, and it will be controlled. It will not disrupt the lives of the people who work at Chrysler.
RUSH: Oh, of course, can’t have that. It’s going to disrupt a lot of other people’s lives, but we can’t disrupt the lives of the union workers and the people who work there.