It took about 500 days of negotiation. But on Thursday, February 9, attorneys general representing nearly all 50 states made the announcement: Five banks will pay a combined $25 billion over three years in civil penalties and loan write-downs for having serviced mortgage foreclosure paperwork over the previous four years without proper review. The settlement, say supporters, will compensate homeowners for prior predatory lending practices, reform the banking industry and give the economy a boost. But the context of the case suggests an ulterior motive: socializing the housing market. This by no means is the first such attempt during the Obama years. And the true cost of this shakedown, the largest of its kind since the 1998 tobacco industry settlement, may be far higher than $25 billion.
Last week, Greencarreports.com reported that crony corporation, General Electric, will be purchasing only Chevy Volts for employee use. The move will help General Motors proclaim that the Volt is a success (and help ensure that GE sells more charging stations) as thousands of orders for the vehicle hit the books, conveniently timed to coincide with the run up to the 2012 presidential election.
Last night, NLPC President Peter Flaherty criticized GM's bonuses to United Auto Workers while the company is stil deep in the hole to taxpayers. He appeared on CNN's Situation Room. Here's a transcript:
General Motors reported year end earnings figures today. The company made about $9 billion dollars in 2011. How much of its "fair share" is GM paying in taxes? Zero. In fact, from GM's financial report, they actually received a "benefit" of $110 million for the year. The UAW benefited as well, as they are set to receive $7,000 per worker in profit sharing bonuses.
In a major victory for the National Legal and Policy Center, the Federal Communications Commission (FCC) yesterday reversed itself and revoked a controversial waiver it had granted LightSquared, which would have allowed the company to deploy a national wireless network. The reversal is not only a major setback for LightSquared's billionaire owner Phil Falcone, but puts a harsh spotlight on the role of FCC Chairman Julius Genachowski.
How did a start-up electric car company that raised more than $1 billion suddenly fail to meet government-lending standards, to the point where it can no longer draw on an awarded Department of Energy loan and has therefore halted renovation work on a Delaware plant?
Now Wall Street analysts are wondering the same thing, and the beleaguered lenders at the Department of Energy must be deeply concerned about what they will do next. As Forbesreported yesterday, the close ties between the two speculative companies could produce “two Solyndras for the price of one."
In the words of Yogi Berra, it looks like déjà vu all over again as General Motors plans to "relaunch" the Chevy Volt. Just in case you missed the first rollout that saw certain financial news networks dedicate loads of airtime to help GM build the hype surrounding a vehicle that was to be a savior for GM as support was garnered for a taxpayer bailout and subsequent IPO, we now get a second take on the failed first production.
Among the objections about taxpayer subsidies for the high-profile Chevy Volt, manufactured by Government Motors, is that the many grants, loans and tax breaks that lowered the sticker price on the electric hybrid car facilitated its (paltry) sales for the benefit of wealthier individuals who were purchasing it – those with average annual salaries of $170,000. So can you imagine how happy the affluent customers (like Leonardo DiCaprio) of the heavily subsidized, $102,000 electric Fisker Karma are, to be able to purchase their gimmicky sports sedan at a discount, with a $7,500 tax credit to boot?