First he bailed out the UAW, now it’s Detroit

One of Barack Obama’s signature achievements was the bailout of the UAW that he and his cronies sold as a bailout of the “auto industry.”

The $80 billion that he dumped into GM and Chrysler had nothing to do with the auto industry, they are alive and well and employing more people than ever. It’s just that they aren’t employing UAW members and it’s centered in the South and as the UAW just found out in Chattanooga, they really don’t like unions.

The $80 billion saved UAW pension funds, at the cost of billions invested in GM and Chrysler bonds by state pension funds around the country. The Detroit based auto manufacturers could have – and should have – gone through a pre-packaged bankruptcy filing.

Hundreds of other large firms have successfully done it. They would not have gone away, they’d be stronger today than they are because it’s likely a bankruptcy court would have restructured their union contracts which are about 50% above market leaving GM at a big labor disadvantage that will come back to bite them. Again. This makes the third time the federal government

You’re no doubt familiar with the bankruptcy filing of the city of Detroit. We’re not going to revisit the cause of the BK, other than five decades of progressive, crony, minority, incompetent leadership in the mold of Coleman Young and Kwamie Kirkpatrick might be the cause.

The union pension funds are going to take a big hit, given that they’re a major factor in the $18 billion hole facing Detroit. Needless to say, the Obama administration isn’t going to stand by and let the incompetence and criminal activity of progressive black mayors fall on the unions who fund Democratic campaigns.

The President has already been told, in no uncertain terms, by a Detroit city councilwoman, that it’s his job to “bring home the bacon” because Detroit residents voted overwhelmingly for him.

In other words, “pay up chump.”

It should be obvious that a direct bailout of the city’s unions will never get through the House. Heck, it might not even get through the Senate. So the President needs to find some newly digitized “money” already budgeted that he can redirect to Detroit’s unions. He needs to answer JoAnn Watson’s call for cash.

So far, the State of Michigan looks like they’re going to pony up about $350 million to help the city. We think that’s a stupid waste of money, but that is the problem of Michigan residents. If Republican Governor Rick Snyder can live with that deal we certainly can since none of our federal or Arizona state taxes are going into the pot.

The city has already reached a tentative deal with “first responders” to maintain their pensions at the cost of deeper cuts to other city employees. We view that as the potential for “blue-on-blue” war and we’re OK with that. Pass the popcorn.

The Obama administration has a big pot of money available for “homeowner assistance” left over from the housing crisis. Now we thought the housing crisis was over, at least that’s what the administration has been telling us for a couple of years. So, if the housing crisis is over why is there still a pot of cash laying around to help out? We’re thinking it’s a convenient way to pay off JoAnn Watson and her cronies for their votes in 2012.

Union leaders want federal money originally slated for struggling Michigan homeowners to help plug a pension hole in Detroit as officials work to resolve the nation’s largest municipal bankruptcy, according to people familiar with the talks.

Under the plan being discussed, Detroit Emergency Manager Kevyn Orr would get access to $100 million earmarked for Michigan from a fund the U.S. Treasury Department established in 2010 to provide relief in the wake of the housing crisis.

Michigan would send the federal money to Detroit for blight reduction, as has been done in the past. Mr. Orr then could take other funding already earmarked for blight elimination and use that in a plan to help make up a $3.5 billion shortfall in the retirement system for city workers, according to people familiar with the discussions.

In other words, they’re cooking the books. Again.

Frankly, if we get out of this mess for $100 million it’s a sweet deal. The other “good” part of the deal is that no immediate precedent is set that the federal government will bail out local pension funds. Given the sad state of public pension funds in the US – depending on who you believe they’re well over $3 trillion in the hole – that would be the nightmare on Pennsylvania Ave.

http://www.theminorityreportblog.com/2014/04/17/first-he-bailed-out-the-uaw-now-its-detroit/