A liberal think tank with close ties to the Obama administration took money from General Motors and other businesses it did not disclose while campaigning for policies benefitting those companies, according to The Nation magazine.
Members of the “Business Alliance” of the Center for American Progress (CAP) include bailed out car company GM, unsafe Bangladeshi factory utilizer Walmart, and embattled solar energy company First Solar, according to a membership list obtained by the liberal magazine.
CAP, as the article lovingly goes on to note, supported the auto bailout. Reading between the lines, this seems to be a grudge match between CAP and The Nation, or maybe a grudge match between the Clintonistas and the hardcore progressives, or maybe even the first shots of 2016. Not that you care about that, any more than I do: all you care about is whether both sides are ready and able to carve each other up into seething little lumps. Continue reading The Nation calls out the Center for American Progress for *selling* out to corporations.
The short version? Having the government do your restructuring for you isn’t necessarily the brightest thing in the world. Particularly when there’s a variety of conflicting objectives. At least, if what you’re trying to do is actually create a better version of your company; if your goal is to use government fiat to streamline the operations of your newly government-owned automobile manufacturer it apparently works out just fine.
If you’re not listening to this feature by Francis Cianfrocca of the The New Ledger (also a RS Contributor, of course), start. Here’s the latest one, about the slow-motion death and reanimation of General Motors. Well worth your time to listen to in full.
Let’s walk through the mercury problem (H/T: Instapundit).
Automakers used mercury as a component for various auto systems until 2004.
They stopped because mercury is toxic, and it gets into stuff that we eat (the actual level of risk is in fact not relevant for this discussion).
People get very touchy about toxic elements being thrown out with the rest of the garbage, so there’s an industry designed around collecting the mercury at the end of a car’s life. The big (only?) one of these is ELV Solutions.
Autoblog Green calls the reason why “convoluted,” but it’s not. There are now two GMs. Good GM is the one with good assets and a chance of actually making money; Bad GM is the one with all the garbage assets, bad debts, and onerous obligations.
Good GM does not make cars using mercury, and technically never has (its predecessor Old GM did, not it), so it sees no particular reason why it should fund mercury recovery.
Bad GM… doesn’t make anything, or indeed do much of anything except sit there and slowly decompose; but Bad GM is the one that ELV Solutions needs to talk to about funding mercury recovery.
No, Bad GM doesn’t have any money. Money is a good asset, which is why Bad GM doesn’t have any of it.
No, ELV Solutions is not able to break even on mercury reclamation. If you could do that, ELV Solutions wouldn’t exist: the car companies would have done the job themselves and directly.
So now we come to the Cash-for-Clunkers program, which has suddenly put a large number of pre-2004 cars up for immediate destruction (and mercury reclamation). A lot of those cars were built by the Old GM.
ELV Solutions is thus stuck for reclaiming the mercury of a major car company’s old vehicles, without getting funded by that car company.
And, given that there’s no GM ‘flavor’ of mercury, or GM-only junkyards, ELV Solutions is really stuck for reclaiming the mercury a major car company’s old vehicles, without getting funded by that car company.
One last thing, and please note this carefully: none of this is a bug. The intent all along was to shunt money-hemorrhaging expenses like mercury reclamation to a zombie company that could go belly-up without also killing General Motors. So don’t expect the administration to do anything about this. Although I suspect that the hand of the government that was establishing the GM reorganization [did not know] what the hand that was putting together Cash-for-Clunkers was doing… which may mean that (depending on how this all turns out) a seafood diet may be contraindicated again for a couple of years.
(H/T: Instapundit) I am honestly surprised to find that there are people surprised by this.
Among those clamoring for attention and payouts from Motors Liquidation Co., the company that assumed General Motors’ unwanted assets after its Chapter 11 filing, are the environmental and economic redevelopment departments of state governments. According to reports, when GM exited bankruptcy, its polluted factory and land sites were consumed by the Motor Liquidation, allowing the automaker to avoid the responsibility of cleaning up its mess, and state leaders fear there won’t be any money to clean the locations.
After all, this was the original point of the exercise. GM was an unsustainable, debt-ridden mess; the government takeover and bankruptcy was designed to let it cut out the most diseased portions of its operations and reorganize as something more… ‘untainted,’ as it were. Or possibly even just ‘less tainted.’ That this ends up with individual state governments left holding the bag on the cleanup* is either an unintended consequence, or just a previously-obscure detail, of the bailout/bankruptcy; it all depends on whether you see the administration as a collection of dangerous idiots, or as a collection of dangerous idiots. A federal bailout of the state governments’ obligations to clean up a private industry’s ecological mess would certainly be a useful weapon in the federal government’s ongoing quest for ever-more power and oversight.