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I Wade Into Presidential Politics

posted by Stephen Lubben
Or why the bankruptcy professor is relevant, over at Dealbook.


I would like to dispute:
"The only way the government guarantee would have changed this is if it were nothing more than a fig leaf, disguising what would have been for all intents a government-financed debtor-in-possession loan."

I think it would have been possible to subsidize a DIP loan so that the DIP provider only had some percent of of their investment at risk. The percent might be 50%, 25%, or 5% The precise amount could be determined by a bidding process.

Berkshire-Hathaway had money for a price and sufficient security all through the crisis.

I don't think it was an all or nothing situation.

Note that the 2010 IPO was helped along by the existence of tax losses carried over from old GM to new GM.

It's hard to take anything either candidate says about GM very seriously. Everything is merely calculated to appeal to their base while trying to win independents in Ohio. Factual accuracy is at best secondary.

Trying to counter political positioning with appeals to facts seems like a rather thankless task.

Note that Judge Gerber in his decision on the 16th states, entirely in dictum but still, at page 11 that no private money was available.

AndrewDover - I think you are describing exactly what Mr. Lubben was referring to as a fig leaf. Unless the public risk amount was quite low, all you are describing is a public subsidy to a private lender to offer a loan. I also don't think that this is what Romney thinks he means, although as D points out, he probably doesn't really mean anything except for vague talking points.

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