As if the Obama Administration has not ripped off the taxpayers enough already with the GM bail-out, the regime is doing it again. The feds are selling off their shares of GM in an IPO this week. And it is expected to go well.
But if you are thinking that you, the U. S. taxpayers can make back some money by participating in the IPO, you probably have to think again. The average guy cannot participate, and many brokers, including the one I use and Schwab among others, are cut out of the deal altogether.
So us taxpayers foot the bill for the GM bail-out, but we do not get to make some money back by participating in the IPO? That is an outrage.
And it is not only Democrats who have shafted taxpayers that way. I remember way back when the feds privatized Conrail in an IPO under Reagan. Although taxpayers subsidized Conrail for years, most, including me, could not get any shares in the IPO. I still have not forgiven Elizabeth Dole, the Secretary of Transportation at the time.
Maggie Thatcher knew how to do privatizations right. If Joe UK Taxpayer wanted shares in an IPO of, say British Telecom, he got some. And that is the way it should be. If your taxes went to bail-out or subsidize a business, you should get to participate in the privatization.
An important benefit of her policy: when Thatcher became Prime Minister, 3 million British were private shareholders; when she left, the number was over 11 million. She gave working people a real share in corporate profits far more than the Labour Party ever did.
But instead, the policy of the Obama Administration is to force taxpayers to bail out GM and its unions, then stiff-arm those same taxpayers in the privatization.
So how does it feel to get shafted twice over?
Past GM bondholders are ticked, too. Behind one of the paywalls at thestreet.com, the normally mild-mannered Tim Melvin fumes:
The more chatter I hear about the GM IPO this week the angrier I get. As a former GM bond holder who took a haircut in favor of the government in the unions I have a question. If this deal is so successful how about you give me back some of the money you took from me and other bond holders against not just my wishes but the basic concepts of contract law? How about just a favorable allocation of stock to those of us who were dumb enough to lend the company money thinking the basics of the bond indenture and bankruptcy laws made our investment safe? Maybe I could flip my shares to all the taxpayers who are shut out of the deal in the aftermarket for enough of a gain of partially offset my losses!
And seeing how Obama favored the unions who helped bring GM down over the bondholders in blatant violation of contract law, I share his anger.