Auto Bailout "Progress" Defined: "Only" $28b in TARP Losses
Last week’s announcement that had Chrysler turned a Q1 profit and GM had “repaid” taxpayer loans brought a flurry of political posturing about the success or lack thereof of the auto bailout. With Republicans laying into the auto bailout from several angles, President Obama dedicated his weekly address to a defense of industry assistance. Obama still frames the bailout as an unpleasant necessity, but argues that last week’s news means the chances that taxpayers will recoup their “investment” are improving. And apparently the Treasury agrees. According to the Detroit News, Treasury has revised its estimate of auto bailout losses (not counting GMAC) downwards, from $30.6b to $28b. Progress, sure, but hardly a sign that taxpayers can expect full payback from its state-owned automakers.
mikey, you need to print this message out, tape it to your bathroom mirror, and ponder it each morning until the reality of it finally sinks in: I WILL NEVER SEE A DIME OF BAILOUT MONEY, EVEN IF GOVERNMENT MOTORS SOMEHOW PAYS BACK* ALL MONEY TAKEN FROM TAXPAYERS. (* "Pays back" copyright 2010, Grandpa Whitless) Our government used some $60 billion of our money to prop up two miserable, non-competitive, failing companies (okay, 1.3 with Chrysler) that the market had determined should disappear, or at least be ripped apart through the standard bankruptcy process. The feds stole that money right out from under us -- no election, no national referendum -- and used it as an affront to one of the principles this country was founded on: free enterprise. That offends me, just out-and-out offends me. Yeah, the feds did the same with AIG, too... but in this case, I can do something to hopefully tip the scales. I can refuse to buy another Government Motors product, and encourage others to do the same. I'm happy to see I'm not alone there, either. So yes, let me go on record here: All things being equal... yes, I want Government Motors to die. I want UAW members at unemployment offices by the thousands, dragging their false senses of entitlement with them. I want Detroit to implode on itself, its shattered remains an eternal monument to the inevitable outcome of the rampant greed, myopia and largesse shown by the Big 3 over the past 50 years. Why? Because the important lessons are most often the most painful ones to learn... and if this country is going to last, while holding true to its own principles, we need to start learning those lessons now.
I thought I saw Whitacre say that GM had paid back all their loans with interest, 5 years ahead of schedule. Here, the President is saying our chances of recouping the money are improving. Since there is more than a little difference of opinion, one person is lying more. And for once, I don't think it's the politician.
President Obama says, "The rapid dissolution of these companies – followed by the certain failure of many auto parts makers, car dealers, and other smaller businesses – would have dealt a crippling blow to our already suffering economy. The best estimates are that more than one million American workers could have lost their jobs." Now $28 billion is what percent of the U.S. GDP of $12 trillion? President Obama is getting my vote in 2012.
The acid test is what happens in the coming years. I'm not convinced that GM - let alone Chrysler - is really out of the woods yet. If GM and Chrysler still need more money, will the government have the fortitude to say, "Enough is enough, we bailed you out to prevent a bad situation from getting worse, but now you have to face the music?"