Bailout Watch 574: President Obama on Chrysler, GM Bailouts: "We'll Get Our Money Back"

Words are cheap. Detroit bailouts are expensive; the feds have spent more than $100 billion on the Motown meltdown. But don’t worry. Be happy. According to Reuters, “President Barack Obama said on Wednesday that General Motors and Chrysler Group were companies worth saving, but he expects both to repay their government loans.” But? The Prez made his prediction to celebrate the latest stats from the car buyers’ bailout (a.k.a. Cash-for-Clunkers or C.A.R.S. program). Even Reuters isn’t buying that one—much. Apparently, it’s all about the mix. “The impact on GM, Chrysler and Ford Motor was not immediately clear with passenger car sales outpacing those of pickups and sport utilities.” Translation: the Big Three need pickup and SUV sales to survive. Fair dinkum, albeit on a very, very small scale in this case. It gets better/worse . . .

“If GM and Chrysler were willing to do what was necessary to make themselves competitive and if taxpayers were repaid every dime they put on the line, it was a process worth supporting,” Obama said in Raleigh, North Carolina.

“We saved hundreds of thousands of jobs as a result and expect to get our money back.”

Funny, I thought the bailout helped Chrysler and GM cut jobs. Oh wait; I remember: the federal money allowed them to cut jobs with big buyout packages, paid for by the U.S. taxpayer. No, that’s not it. I mean it is, but ALL those jobs would have disappeared completely without the bailout. Right? Total economic catastrophe. That kind of thing.

As much as I like the word “if” (it’s so much more realistic than “Yes we can!”), three questions. First, who decided “what was necessary”? Second, how much faith do we have in them? And third, what are the odds the automakers will repay every dime “invested” Chrysler and GM?