Chrysler, GM, GMAC: "Where Bailout Money Goes to Die"

by Robert Farago

Published: July 28th, 2009

chrysler gm gmac where bailout money goes to die

Despite TTAC’s GM Death Watch and Chrysler Suicide Watch, the MSM was asleep at the wheel during the domestics’ dissolution. Now that New Chrysler and New GM have appeared, like sin from Satan’s head, the MSM is . . . asleep at the wheel (obscure reference of the day: “miles and miles of taxes”). That said, U.S. News and World Report has this Troubled Asset Relief Program (TARP) thing wired. The magazine commissioned the Ethisphere Institute to consult its weekly TARP index to calculate the odds that We The People will see our $700 billion (that’s billion folks) “investment” again. The bottom line: the Institute says anyone who thinks we’ll get out bailout bucks back from Chrysler, GM and GMAC should be committed. Make the jump for the run down on the troika of former auto industry stars disappearing your tax money down a TARP-shaped black hole.

Chrysler — $14.9 billion: “The return to the government will probably be well below face value, since the government holds a relatively small stake in a company that’s still endangered. ‘The government will get back materially less than its $8 billion principal,’ says analyst Stefan Linssen of Ethisphere.”

GM — $50.7 billion: “Ethisphere estimates that taxpayers will be lucky if they get back $20 billion, a mere 40 percent of their investment in GM.”

GMAC — $12.5 billion: “Ethisphere believes that with GMAC’s vast exposure to two depressed industries—cars and homes—at least $5 billion of GMAC’s TARP funds are a complete write-off.

Robert Farago

More by Robert Farago

Comments

Join the conversation

4 of 14 comments

Wsn on Jul 28, 2009
97escort : July 28th, 2009 at 1:05 pm The government will get back every penny and then some. How? Taxes of course. Auto workers and management are well paid and in high tax brackets. And then there is the multiplier effect as the money is passed around after it is paid out. ------------------------------------------ The taxes paid (or to be paid) by auto workers are for their protection (national defense), eduction (of their children) and social/physical infrastructure. It's not a favor that they do to the rest of the nation. It's an exchange of services. Almost all working class people pay taxes. The taxes that auto workers pay are not repayment of the debt GM owes us.

Like Reply
Wsn on Jul 28, 2009
# jkross22 : July 28th, 2009 at 4:29 pm Imagine the government funding VHS makers to stave off the threat of DVD’s or better yet, subsidizing abacus makers because of the looming threat of, (cue Friday the 13th music), CALCULATORS! ------------------------------------------------ I totally agree. The essence of a central planned economy is that the Chairman (or Fuhrer) knows better than the entire population about everything. Thus, the Chairman will decide which auto maker is too big to fail, what EPA mileage needs to be achieved, what ratio of corn to be mixed into your gasoline ... No, you puny one, you are not smart enough to make your own decisions. Just know that your are in good hands.

Like Reply
U mad scientist on Jul 28, 2009
No, you puny one, you are not smart enough to make your own decisions. Just know that your are in good hands. This is absolutely true to a large extent. That's why the most dominate features of successful capitalism are its authoritarian corporations. The fact that so many of the puny people still can't understand why some sort of bailout was necessary after all this time is a testament that they should leave decision making to those who know better.

Like Reply
Katherine Benson on Jul 27, 2010

while gm and chrysler were in bankruptcy they should have gotten rid of the uaw.it would have been legal and then they could compete.there are plenty of people who wuould take the jobs at ten dollars an hour.

Like Reply