The Last Nail

“Obama deliberately raised the cost of capital for every unionized business in the country. It’s worth asking why he would think that’s a good idea.”

Yeah, though since he doesn't know what PE means, he probably doesn't know what Cost of Capital is.

But just in case Obama has taken a break from Andrew Sullivan's blog and is getting policy advice from Spyral Notebook, let me mention this.

I work for one of those highly leveraged, highly unionized companies. We are selling real estate from under the business to meet union pension obligations. Our consortium of lenders have us on a week to week profitability plan. We have fired twenty percent of its labor force, cut thirty percent of the salaried folks, and we've had across the board salary and benefits cuts.

Now, what do you suppose the conversation is around the water cooler on the executive floor?

A. Obama will never let us fail and watch 55,000 union jobs disappear. No worries.

or

B. They're screwing the secured debt holders! The bank consortium is going to cave! I'm calling my headhunter!

Here's your first clue. It's B.

Basically, anyone with a reputation has got one foot out the door. The executive floor is getting weaker and weaker. At the end of the day, it takes smart people to run a business well. All ours are leaving. My bet is that within a couple of weeks the biggest transportation industry failure in history will go down.

The last nail in the coffin will be the increased risk the banks perceive as a result of Obama's actions with the Chrysler deal, which translates into an increased cost of capital when we could not afford it.

Thanks, man. If only you had learned just a teansy bit about business before taking over the free world.

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