“Investor” Remorse
Kevin Hermening
June 6, 2009
Last week, you, Mr. and Mrs. American taxpayer, became the proud owner of an automobile manufacturer. With about 300 million business partners, you undoubtedly wish you had a say in that decision. You didn’t.
But still, you own in excess of 70 percent of “Government Motors,” or what used to be known as GM.
Yearn for the heady days of Carl Icahn or some other giant of economic rebirth – though always with many painful aspects to go along with his numerous restructurings – and it’s hard to understand why both the Obama and Bush Administrations chose to invite you into the venture instead.
Why the worst-run business in America wasn’t allowed to fall into bankruptcy last fall may turn out to be the worst government decision since Jimmy Carter’s opted to appoint Billy Carter as a quasi-ambassador to Libya in 1978.
Your $20 Billion from last fall’s TARP bill, plus the additional $50 Billion Obama plans to slide to corrupt union leaders heading up GM’s newest bungles, just may be down payments. After all, the business plan that sought the recent round of money is based on projected car sales of 14 million, compared with today’s 9 million in sales.
That’s the promise of the Obama leadership designed to deliver your money back.
Most people want both a return “on their money” and a return “of their money.” You, my friend, and fellow proud owner of GM, will get neither! Sucker! You had a better chance with Bernie Madoff – oops, is it really fair to compare your elected members of Congress and the President(s) to the largest swindler in Wall Street history? (Quick – which one is worse?)
Four decades of failed car company leadership, including the board of directors and the union stewards who never bargained in good faith, has brought us to this point.
And, all of this happening while the greenies in Obama-land are forcing upon automakers higher mandatory mileage efficiency (CAFE) standards assures us of a failed business venture with our “investment” in GM.
The UAW has made it clear that the union won’t let the new green cars be manufactured abroad, so the new vehicles are assured of unprofitability. I know it’s shocking, but your “new” GM plans to make more cars that more people don’t want to buy…now isn’t that a smart marketing plan?
So, now that you have bought a car company, what’s in your future? You’re gonna buy California, and probably a few other poorly managed companies and states, to boot. I’m all for “Terminating” the U.S. relationship with the biggest state in the nation; a “reverse” secession, of sorts.
Every day I hear that Americans are increasingly disgusted with the decisions being made to increase government’s heavy hand in the U.S. economy. If that’s true, we need to stop “investing” in failed business enterprises, and stop propping up bankrupt governments, and demand a return to fiscal reason and sound management responsibilities.
If we don’t, we face only two solutions to Obama’s big-government tax and spend and borrowing policies: inflation by “growing” the money supply or huge tax increases. Neither one is attractive.
I have confidence in our ability to reverse course over the long-term. But it’s time to get a grip on today’s orgy of government spending, and its control over the free enterprise system.
For nearly 20 years, Kevin Hermening, CFP® has operated his own financial planning firm, Hermening Financial Group LLC (HFG), an independent firm with a focus on comprehensive financial planning, tax planning, and investment management, as a fee-based investment advisor. He is a member of the Financial Planning Association, the professional organization for independent financial advisors, and is a member of several local civic and veteran’s organizations. From 1993 to 2000, he was the host of "Your Business, Your Money, and You," a weekly hour-long live radio broadcast on Wausau talk radio 1230AM WXCO.
Kevin is an accomplished public speaker, having addressed numerous audiences nationwide over the past 30 years, often about his experiences as the youngest of the 52 Americans held hostage at the U.S. Embassy in Iran for 444 days from 1979 - 1981. He served a total of 13 years in the Marine Corps and Marine Corps Reserve, and received an Honorable Discharge in 1994. He is the recipient of the U.S. State Department's Award for Valor, and received the Prisoner of War Medal and the Defense Meritorious Service Medal, the nation's highest peacetime military decorations, from the Department of Defense.
Kevin has been involved in national, state, and local politics for many years, and has twice been a candidate for the U.S. House of Representatives and the Wisconsin State Legislature. He and his wife, Wendy, have two daughters, Kacey and Kaitlyn and currently reside in Mosinee, Wisconsin.