The Most Irresponsible Thing You’ll Read This Weekend

GM Seeks $16.6 Billion More in U.S. Aid

GM said it might need as much as $100 billion in financing from the government if it were to go through the traditional bankruptcy process. Rick Wagoner, GM’s chairman and chief executive, said the bankruptcy scenarios are “risky” and “costly,” and would only be pursued as a last resort. —WSJ February 18, 2009

The most irresponsible thing you’ll read this weekend is—well, you’ve already read it, we think.

That would be General Motor’s Chairman and CEO, Rick Wagoner’s threat that a GM bankruptcy would be “risky” and “costly.”

Why irresponsible? Well, think about those words for a minute.

Think about the fact that GM stock was above $60 a share when Wagoner was made CEO in June of 2000—last trade $1.95.

Think about the fact that GM has reported losses of close to $70 billion in the last three-and-three quarters years under Mr. Wagoner’s leadership.

Think about the fact that GM is a 101 year-old company which under Mr. Wagoner has accumulated negative retained earnings of $60 billion-and-climbing—meaning that in more than 100 years of operation, the company has not managed to keep a dime’s worth of retained earnings for its shareholders.

And ask yourself if letting GM continue as it is could be any riskier, and any more costly, than it’s been as a public company under Mr. Wagoner.

Now, we have no doubt the political money-launderers in Washington—of both parties—will agree with Mr. Wagoner, and will continue to fund GM in what essentially amounts to nothing more complicated than a continued effort to secure Michigan Electoral College votes for each party’s future Presidential bids.

But that wouldn’t make the statement that a bankrupt GM would somehow be riskier, and more costly, than GM as an independent public company has been, any less irresponsible.

Jeff Matthews I Am Not Making This Up

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