Flustered by the new capitalism (April 28)
By Chuck Doud
The Madera Tribune
The latest General Motors rescue plan would give the United Auto Workers 89 percent of the company, and the government 50 percent. Present stockholders would own only 1 percent. This must be the new capitalism. The new company will be worth 140 percent of the old company.
Or, maybe there’s something I don’t understand.
Ken Lewis, CEO of Bank of America, has testified under oath that he was told last year by then-Treasury Secretary Hank Paulson and Federal Reserve Chair Ben Bernanke to keep his mouth shut about the true state of Merrill Lynch, which BofA was in the process of acquiring.
Lewis said he was essentially told to keep his mouth shut or be fired, along with his board of directors. More of the new capitalism. The government can fire you and your board just by forcing you to take a loan you don’t want, and then telling you what to do with it.
Or, maybe there’s something I don’t understand.
Actually, Mrs. Doud will tell you there’s a lot I don’t understand. I had thought last year that I might buy a few shares of General Motors when those shares dropped into the $2 range, and she happened to mention that I would be crazy if I did that.
“They are having too many problems,” she said.
I figured GM would solve its problems in time to make us rich — well, maybe worth a few bucks more than we were then. But I never got around to buying any of that stock, because there was no way I could hide the purchase from Mrs. Doud.
But that was in the days of the old capitalism, when companies fought their way back from hard times and made money again. A small-timer like me could buy low and sell high — at least with a few shares.
Now those days are gone. I guess I’ll never understand this new capitalism.
