In response to Senator Chuck Grassley’s concern that GM’s claim to have paid back taxpayer loans was misleading, the US Treasury is now saying that it has no problem with The General’s statements. According to the Freep, a Treasury letter to Grassley explains that:
GM’s decision to pay off the loan signaled the automaker did not face “extraordinary expenses,” and that Treasury approved the loan payoff.
“The fact that GM made the determination and repaid the remaining $4.7 billion to the U.S. government now is good news for the company, our investment and the American people,” said Herbert Allison, assistant Treasury secretary for financial stability.
Strictly speaking, GM’s claim to have paid back all US Government loans is correct. The only issue is that GM’s ad touting the payback makes no reference to the fact that it still owes the Treasury upwards of $40b. If that misleads folks, well, apparently the Treasury Department isn’t going to do anything about it.
And why would they? The better GM does, the better it looks like Treasury has managed the bailout, and GM’s success is undoubtedly tied to its ability to convince Americans that it doesn’t owe them anything, even if it does. The problem for both GM and the White House is that even former GM “ambassadors” are lining up to knock this misleading softball out of the park… and fan the flames of anti-GM sentiment in the process. All of which just increases the likelihood that taxpayers won’t ever be paid back in full.
Wouldn’t it be easier if some high-profile administration official simply acknowledged that GM has along ways to go? Or what about if GM didn’t try to score PR brownie points off this money-shuffle in the first place? At this point the auto bailout can’t be un-done, but it can still be made even more pointless by whipping up opposition with these Treasury-backed half-truths. After all, if you owe someone money but can’t pay them back, the least you could do is be honest about it.