GM Files for Bankruptcy, Costing Taxpayers $100 Billion
The Wall Street Journal wrote on June 2:
“General Motors Corp. became the second-largest industrial bankruptcy in history Monday as it filed its landmark case… The government-orchestrated shrinkage will cost taxpayers $30 billion, on top of $20 billion in U.S. funds already put into the company. In exchange, the U.S. will own 60% of the new GM. In all, the rescue of the car industry could cost taxpayers close to $100 billion.”
GM Bankruptcy Plans Would Extinguish Certain Auto Accident Claims
The Hill wrote on June 3:
“Consumer groups and trial lawyers are crying foul over the Obama administration’s bankruptcy plans for General Motors and Chrysler. Those plans would extinguish all ongoing auto accident claims that blame a death or serious injury on a defective GM or Chrysler vehicle… those claims must be made against the old GM company after bankruptcy, meaning people with the claims will need to stand in line with other unsecured creditors to seek compensation from the old company’s remains… The new GM that arises out of bankruptcy will not be liable for those claims.”
German Reactions to GM Bankruptcy–“Not Much Hope” for Obama’s America
Der Spiegel Online reported on June 2:
“The insolvency of General Motors shows America’s weakening industrial clout and poses major risks not just for the economy but for Barack Obama, write German media commentators. If the planned restructuring of the automaker fails, his economic policy will lie in ruins, they say…
“German media commentators say GM’s insolvency marks further proof of American’s waning economic influence in the world, and they express concern that Obama’s administration, despite its assurances that it won’t interfere in GM’s business, will distort competition by running the firm according to political rather than market principles.
“Business daily Handelsblatt writes: ‘America’s economy is losing power and influence in the world. It’s a creeping process… which began with the relocation of textile production to Asia and then pushed steel producers, tire plants and many other industries out of the country… [It] has plunged the country’s political leaders into increasing despair. How else can one interpret the gigantic rescue operation for GM that will end in the nationalization of the biggest auto company in a country that has always hailed itself as the paragon of capitalism?…’
“Business daily Financial Times Deutschland writes: ‘The restructuring of the group will turn into a political drama. That creates considerable risks for the entire US economy, but also for international competitors operating in the American auto market. The restructuring of GM will be extremely expensive for the American taxpayer, $50 billion could disappear into a black hole…’
“Center-left Süddeutsche Zeitung writes: ‘If Obama fails in his attempt to save America’s automobile industry, his economic policy will lie in ruins… In the nationalized General Motors, serious conflicts of interest are unavoidable…’
“Conservative Frankfurter Allgemeine Zeitung writes: ‘The insolvency of General Motors is a historic moment for America. June 1 also marks the day on which Barack Obama rewrote the rules of American capitalism. It’s an alarming development. The government’s insistence that it’s a reluctant shareholder which will play a largely passive role in General Motors doesn’t seem very credible. That’s already clear from the list of principles it has compiled for its handling of future stakes in private companies. The government says it will give companies leeway but at the same time cited a number of cases in which it would intervene in corporate management.
“‘In fact Barack Obama has shown in the case of General Motors and Chrysler that he’s prepared to play a very active role. He dictated very unattractive debt reduction terms for creditors and then labelled them as speculators. Who is going to lend a government-owned company money in the future if they’re treated like that?… General Motors mustn’t become a pawn of American political forces. Barack Obama’s actions so far don’t inspire much hope.'”
U.S. Nationalizations of Companies and Industries
The Associated Press reported on June 2:
“The U.S. assumption of a controlling interest in General Motors Corp. isn’t the first time the government has nationalized a company or an industry. It has taken shares in banks, railways, steel mills, coal mines and foreclosed homes. Most nationalizations were during wartime. But the current financial crisis has generated more than a few.
“Last year, the government took effective control of mortgage giants Fannie Mae and Freddie Mac. It stopped short of nationalizing insurance giant American International Group, but forced a major restructuring and leadership change with a $180 billion taxpayer bailout.
“… nearly 600 banks nationwide have received a total of $199.2 billion under the government’s $700 billion bailout fund… In 2001, the airport security industry was nationalized under the Transportation Security Administration as a response to the Sept. 11 terror attacks.
“Under terms of a proposed bankruptcy agreement, the U.S. and Canadian governments will own nearly 75 percent of General Motors, with the U.S. holding a 60 percent controlling stake and Canada with 12.5 percent… Existing stockholders would be wiped out…”
Unprecedented U.S. Debt
USA Today reported on May 29:
“Taxpayers are on the hook for an extra $55,000 a household to cover rising federal commitments made just in the past year for retirement benefits, the national debt and other government promises… That’s the biggest leap in the long-term burden on taxpayers since a Medicare prescription drug benefit was added in 2003.
“The latest increase raises federal obligations to a record $546,668 per household in 2008… That’s quadruple what the average U.S. household owes for all mortgages, car loans, credit cards and other debt combined… Bottom line: The government took on $6.8 trillion in new obligations in 2008, pushing the total owed to a record $63.8 trillion.”
Chinese Laugh at Geithner
BBC News reported on June 1:
“US Treasury Secretary Timothy Geithner… is on his first official visit to China, the biggest foreign investor in US treasury bonds… he said the US and China must work together to fix the global economic system [and]… that the US would move swiftly to get its debt under control.
“In a speech at Beijing University… Mr Geithner reassured his Chinese hosts that they need not worry about the estimated $770bn (£475bn) they have invested in US treasuries… ‘Chinese financial assets are very safe,’ he said, drawing laughter from the audience…”
The Chronicle Sacramento Bureau reported on May 22:
“Gov. Arnold Schwarzenegger’s finance officials, faced with a growing budget gap, Thursday unveiled more ways to cut spending by doing away with a popular health care program for children, welfare payments to poor families and grants to university students. Funding for state parks also could end up on the chopping block, the officials said.
“The cuts were proposed as additional ways to save money after the governor said he is reconsidering his plan to borrow $5.5 billion in short-term loans from Wall Street to close what he estimates will be a $21.3 billion deficit through June 2010…
“Anthony Wright, executive director of Health Access, an advocacy group, called Schwarzenegger’s additional spending cuts ‘insanity’… Wright said eliminating programs such as Healthy Families, which provides health care to nearly 1 million children of poor families, would also result in California turning away billions of dollars in federal matching funds…”
British Catholic Adoption Societies Under Fire
Mail-On-Line wrote on June 3:
“Catholic adoption societies which refuse to offer children to gay couples face closure following a tribunal yesterday. Judges ruled in a test case that the charities, which find homes for hundreds of children each year, will be breaking the law if they refuse to accept same-sex couples as adoptive parents.
“The ruling means some Catholic agencies face a choice between abandoning their adoption services or their religious principles… In its appeal, the Catholic Care charity… said that the right to discriminate against homosexual couples was ‘a principle of a Catholic organisation.'”
Merkel and Obama Not Close Friends…
Der Spiegel wrote on June 3:
“Barack Obama is only passing through Germany on his trip to Europe later this week and does not plan to hold substantial talks with Angela Merkel. The White House views the chancellor as difficult and Germany is increasingly being left out of the loop…
“Even before his inauguration, Merkel made clear that Obama shouldn’t expect much by way of additional military aid from Germany for his theaters of war. Now the US is largely taking care of the deployment of troops in Afghanistan itself, and it is currently dispatching 21,000 additional soldiers… Berlin has categorically rejected missions in the dangerous south, where many British, Canadian and American soldiers are dying.
“… all the major German parties in Berlin want little to do with Pakistan, currently the hottest front in the battle against terror… In America’s view, Germany is opening up its pocketbooks in an attempt to buy its way out of the responsibilities it should be sharing with other Western countries… Nor can Obama hope for much help from Merkel in closing the controversial Guantanamo prison camp… Germany’s interior minister… is so far refusing to accept Guantanamo prisoners in Germany…
“In the eyes of the Americans, though, Merkel’s worst failure was during the early days of the financial crisis… Washington has not forgotten how [Merkel] thwarted the US Treasury’s attempts to solve the crisis within the forum of the G-20. The Chancellery instead used diplomatic channels to push for a meeting of G-8 states. The thinking in Berlin was that Germany would have had more influence over G-8 decisions. And that would have meant that China, the world’s third largest economy and the US’s biggest creditor, would not have been involved. However, the US regarded Germany’s stance as unacceptable both economically and politically. In the end Berlin had to back down.”
Germans Rediscover Sense of Patriotism–With Limits…
Welt On Line wrote on May 18:
“As Germany celebrates 60 years as a democracy and the 20th anniversary of the fall of the Berlin Wall, Germans are rediscovering a sense of patriotism and are no longer ashamed to wave their flag and sing the national anthem. They are even daring to discuss bringing back a bravery medal, unthinkable a decade ago in a country which rejected militarism and turned fiercely pacifist. This year, after six decades atoning for the crimes of the Nazis, a non-aggressive self confidence, also evident in a more assertive foreign policy, is increasingly manifesting itself as Germany…
“The nation startled itself during the 2006 soccer World Cup tournament, when millions of people painted flags on their faces, wearing red, gold and black hats and chanting the national anthem. Younger generations seem to be particularly relaxed…
“However, there are limits to the newfound pride. While Germans feel close to the fatherland, they lack a sense of duty towards it… only 14 percent of Germans are prepared to die for their country, far fewer than in such countries as the United States and Britain. And while Germans want their politicians to be more assertive, they are still nervous about flexing military muscle.”
Merkel and Sarkozy Want Strong Europe
Der Spiegel Online wrote on June 1:
“The German and French leaders issued a joint plea to voters to turn out this week for the European parliamentary elections. Angela Merkel and Nicolas Sarkozy said they wanted a ‘strong Europe’ in order to weather the difficult times… The two conservative leaders emphasized the role the EU can play in regulating the financial sector…
“The pair also gave strong backing to the Lisbon Treaty… ‘Europe must play a leading role in the world,’ they wrote. ‘For that, it must have efficient institutions.’ The treaty aims to streamline Europe’s institutions and decision-making processes and could be ratified later this year if Ireland supports it in a second referendum expected to be held in the autumn.
“The two leaders, both known opponents to Turkey’s membership of the bloc, reaffirmed that stance, albeit without naming the country…”
European Elections Under Way
On June 4, Deutsche Welle reported the following:
“Voters in Britain and the Netherlands are heading to the polls on Thursday to kick off elections for the European Parliament. In four days of voting, about 375 million people will [be] eligible to cast their ballots across the 27 member states in what will be the world’s second-largest election after India’s… There are concerns however in Brussels over voters tending to focus on the performances of their national governments rather than on European issues…
“In the case of Britain this is likely to mean that the ruling Labour Party will suffer a serious setback. Prime Minister Gordon Brown is struggling to assert his authority amid a scandal over MPs’ expense claims and Labour is expected to bear the brunt of public outrage. Brown himself is under mounting pressure to step down. Several government ministers have already resigned over the issue… public outrage over the expenses scandal is also expected to boost the performance of fringe and extremist parties due to protest votes. The anti-EU UK Independence Party is expected to do well and the far-right British National Party could win its first seat in the European Parliament.
“In the Netherlands, the far right Freedom Party under Geert Wilders is also expected to increase its support. There are 736 seats up for grabs and each of the 27 EU member states sends a different number of MEPs to the parliament in Strasbourg. Germany, with the biggest population, gets the most – 99 – while Malta will have just 5. Each country is to hold its own elections for the parliament and near-complete results won’t be known until late on Sunday when the last polling stations close.
“Voter turnout has dropped steadily since the first European elections in 1979 and opinion polls suggest that this year will follow that trend with a new record low despite the increasing importance of EU legislation for the member states… Today approximately 75 percent of European Union legislation is decided by the European Parliament together with the council of ministers.”
Israel Prepares for War
CNN wrote on May 31:
“Israel started its biggest emergency drill in the nation’s history Sunday to prepare civilians, soldiers and rescue crews for the possibility of war… The five-day drill… comes amid the nation’s rising tensions with Iran…
“The Israeli government considers Iran’s nuclear program as the dominant threat facing the country… An Israeli poll released this month found that 74 percent believe that the U.S. policy of engagement with Iran will fail and 81 percent think Iran will develop a nuclear weapon capability.”
Obama’s Approach Unproductive
The Financial Times wrote on June 1:
“From North Korea to Guantánamo Bay, from Iran to Afghanistan, Mr Obama is confronting a range of vexing issues that cannot be charmed out of existence…
“In particular, there is chatter in official Washington that the Israelis may be gearing up to attack Iran’s nuclear facilities before the end of the year. The Obama administration is against any such move and it is normally assumed that Israel would not dare to pull the trigger without the go-ahead from Washington – not least because the Israelis would have to fly across US-controlled airspace to get to their targets. But the Americans do not have a complete veto over Israel’s actions. One senior US official asks rhetorically: ‘What are we going to do? Shoot down their planes?’
“A conflict between Israel and Iran would scatter the Obama administration’s carefully laid plans for Middle East peace to the winds. It would also make talk of improving American soft power around the world seem beside the point. The immediate task would be to prevent a wider regional war…
“Mr Obama’s preferred tools of diplomacy, engagement and charm do not seem to be of much use with Kim Jong-il of North Korea, either. The North Koreans have just tested a nuclear weapon – leaving the Obama administration scratching its head about what to do.”
Obama’s Muslim Roots
ABC reported on June 2:
“Given widespread unease and prejudice against Muslims among Americans, especially in the wake of 9/11, the Obama campaign was perhaps understandably very sensitive during the primaries and general election to downplay the candidate’s Muslim roots. The candidate was even offended when referred to by his initials ‘BHO,’ because he considered the use of his middle name, ‘Hussein,’ an attempt to frighten voters.
“… then-Sen. Barack Obama, D-Ill., and his campaign did everything they could to emphasize his Christianity and de-emphasize the fact that his father, Barack Obama Sr., was born Muslim. The candidate’s comment at a Boca Raton, Florida, town hall meeting on May 22, 2008, was typical: ‘My father was basically agnostic, as far as I can tell, and I didn’t know him,’ he said…
“Back then, [Obama’s] campaign’s ‘Fight the Smears’ website addressed the candidate’s faith without mentioning his father’s religion… Since the election, however, with the threat of the rumors at least somewhat abated, the White House has been increasingly forthcoming about the president’s roots. Especially when reaching out to the Muslim world. In his April 6 address to the Turkish Parliament, President Obama referenced how many ‘Americans have Muslims in their families or have lived in a Muslim majority country. I know, because I am one of them.'”
“Obama’s Unfinished Speech in Cairo”
Der Spiegel wrote on June 4:
“With his address, US President Barack Obama offered an olive branch to the Islamic world. Whether his speech will go down in history will be determined by the mullahs in Tehran and the hardliners in Israel…
“He offered the prospect of a Palestinian state. But will he be able to convince Israel to take that step? He called for a dialogue with Islamic youth. But can the recruiting successes of the Taliban be stopped? He called on Iran to abandon its efforts to produce a nuclear bomb. But will the ayatollahs in Tehran even listen?
“The historic magnitude of a speech isn’t primarily determined by what is said. What is important is what happens after, that the words have an effect… In the Arab world… [some] want to negotiate, others want to build bombs. Some understand Obama’s speech as a prelude to peace, the others see it as a declaration of war — because they realize this peace won’t be achieved in full accordance with the word of the Prophet Muhammad.
“Obama has defined his mission but not accomplished it. The speech must now be followed up by policy proposals and everything that goes along with them — promises, deals and threats. And one can only hope that the day never comes when human lives must be lost in order to execute those threats. The road to peace has already led, many times, to war.”
Reuters added on June 4:
“U.S. President Barack Obama sought a ‘new beginning’ between the United States and Muslims in a speech on Thursday but offered no new initiative to end the Palestinian-Israeli conflict, an omission likely to disappoint many.”
Excerpts from President Obama’s Speech
“America and Islam are not exclusive, and need not be in competition. Instead, they overlap, and share common principles – principles of justice and progress; tolerance and the dignity of all human beings…
“I am a Christian, but my father came from a Kenyan family that includes generations of Muslims…
“It was Islam… that carried the light of learning through so many centuries, paving the way for Europe’s Renaissance and Enlightenment. It was innovation in Muslim communities that developed the order of algebra; our magnetic compass and tools of navigation; our mastery of pens and printing; our understanding of how disease spreads and how it can be healed…
“Islam has always been a part of America’s story… In signing the Treaty of Tripoli in 1796, our second President John Adams wrote, ‘The United States has in itself no character of enmity against the laws, religion or tranquility of Muslims.’… American Muslims have enriched the United States. They have fought in our wars, served in government, stood for civil rights, started businesses, taught at our Universities, excelled in our sports arenas, won Nobel Prizes, built our tallest building, and lit the Olympic Torch. And when the first Muslim-American was recently elected to Congress, he took the oath to defend our Constitution using the same Holy Koran that one of our Founding Fathers – Thomas Jefferson – kept in his personal library… So let there be no doubt: Islam is a part of America…
“America’s strong bonds with Israel are well known. This bond is unbreakable. It is based upon cultural and historical ties, and the recognition that the aspiration for a Jewish homeland is rooted in a tragic history that cannot be denied. Around the world, the Jewish people were persecuted for centuries, and anti-Semitism in Europe culminated in an unprecedented Holocaust. Tomorrow, I will visit Buchenwald, which was part of a network of camps where Jews were enslaved, tortured, shot and gassed to death by the Third Reich. Six million Jews were killed – more than the entire Jewish population of Israel today. Denying that fact is baseless, ignorant, and hateful. Threatening Israel with destruction – or repeating vile stereotypes about Jews – is deeply wrong, and only serves to evoke in the minds of Israelis this most painful of memories while preventing the peace that the people of this region deserve.
“On the other hand, it is also undeniable that the Palestinian people – Muslims and Christians – have suffered in pursuit of a homeland. For more than sixty years they have endured the pain of dislocation. Many wait in refugee camps in the West Bank, Gaza, and neighboring lands for a life of peace and security that they have never been able to lead. They endure the daily humiliations – large and small – that come with occupation. So let there be no doubt: the situation for the Palestinian people is intolerable. America will not turn our backs on the legitimate Palestinian aspiration for dignity, opportunity, and a state of their own… the only resolution is for the aspirations of both sides to be met through two states, where Israelis and Palestinians each live in peace and security…
“Hamas must put an end to violence, recognize past agreements, and recognize Israel’s right to exist. At the same time, Israelis must acknowledge that just as Israel’s right to exist cannot be denied, neither can Palestine’s. The United States does not accept the legitimacy of continued Israeli settlements. This construction violates previous agreements and undermines efforts to achieve peace. It is time for these settlements to stop…
“Too many tears have flowed. Too much blood has been shed. All of us have a responsibility to work for the day when the mothers of Israelis and Palestinians can see their children grow up without fear; when the Holy Land of three great faiths is the place of peace that God intended it to be; when Jerusalem is a secure and lasting home for Jews and Christians and Muslims, and a place for all of the children of Abraham to mingle peacefully together as in the story of Isra, when Moses, Jesus, and Mohammed (peace be upon them) joined in prayer.
“… No single nation should pick and choose which nations hold nuclear weapons. That is why I strongly reaffirmed America’s commitment to seek a world in which no nations hold nuclear weapons. And any nation – including Iran – should have the right to access peaceful nuclear power if it complies with its responsibilities under the nuclear Non-Proliferation Treaty…
“It is easier to start wars than to end them… We have the power to make the world we seek…
“The Holy Koran tells us, ‘O mankind! We have created you male and a female; and we have made you into nations and tribes so that you may know one another.’ The Talmud tells us: ‘The whole of the Torah is for the purpose of promoting peace.’ The Holy Bible tells us, ‘Blessed are the peacemakers, for they shall be called sons of God.’ The people of the world can live together in peace. We know that is God’s vision. Now, that must be our work here on Earth. Thank you. And may God’s peace be upon you.”