By on July 29, 2010

The Obama administration went here before, when it tried to quantify how much worse things would have been without its stimulus bill. And considering the task force has enjoyed access to GM and Chrysler’s business plans, it’s surprising that this graph (from the Auto Task Force’s just-released Bailout “report” [PDF]) is based on notoriously iffy BLS data. Instead of projecting how many jobs were saved by Detroit’s $86b life raft, couldn’t the White House have cited GM and Chrysler’s pre-bailout Chapter 11 plans? Or were there pre-bailout bankruptcy plans? Either way, the Task Force’s claim that 56k jobs have been created in Automotive since mid-2009 is a bit hard to swallow given the SIGTARP’s recent finding that

Treasury made a series of decisions [regarding the bailout-era dealer cull] that may have substantially contributed to the accelerated shuttering of thousands of small businesses and thereby potentially adding tens of thousands of workers to the already lengthy unemployment rolls.

By narrowing a broad bailout to just the manufacturing side (the report leaves out dealer cuts and the GMAC rescue), the Task Force is simply defining its way to victory. Besides, the problem is that there’s really no way of knowing what might have happened without last year’s landslide of government sugar. For all we know, Fiat might have bought a bankrupt Chrysler with its own money. GM might have shuttered dying brands and cut its bloated capacity of its own volition. Both might even be in mediocre-to-OK shape right now. The only thing we know for sure is that the auto bailout has been a qualified success at best so far. Luckily for the bailout boosters, it will be years before Treasury fully divests from GM and Chrysler, so there will be plenty of other opportunities to declare victory.

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87 Comments on “What’s Wrong With This Picture: Saved Or Created Edition...”


  • avatar
    Da Coyote

    It’s always light entertainment when libs try to use numbers.

    Numbers are NOT their friends.

    • 0 avatar
      Telegraph Road

      Heh…I’m a mathematician.

    • 0 avatar
      Bokonon

      What’s a “lib”, coyote? Word use like that are a symptom that you listen to talk radio a bunch. Maybe too much.

      And seeing as the Republicans are peddling gravity-defying ideas like, “cutting taxes always increases revenues”, after passing massive unfunded social spending increases, waging two separate wars on borrowed money and off the budget, thereby tripling the national debt in just seven years, I don’t think you can exactly can claim that numbers are the GOP’s friend.

    • 0 avatar
      john.fritz

      Delete libs. Insert politicians.

      Problem solved.

    • 0 avatar

      @john.fritz: Word.

    • 0 avatar
      windswords

      “What’s a “lib”, coyote?” Well, what’s a “right winger”, a “tea bagger”, a “socialist”?

      “cutting taxes always increases revenues”, yes, it does, ever since it was first tried by — John F. Kennedy (the “experts” told him it wouldn’t work too, but revenues to the treasury increased).

      As for tripling the national debt in just seven years, that’s child’s play. It took Obama and the dems only 6 months to double that. Well, I guess they’re good at something!

  • avatar
    jkross22

    There are so many moving pieces to this story that it’s disingenuous to claim credit for a story that’s half way told.

    Look at what’s happened to the used car market b/c of C4C. Fewer cars available at lower prices meaning those at the bottom rung financially who need a car have a harder time buying one.

    What to make of the $7500 tax credit for the Volt that someone at GM will hoover up when the car is leased as opposed to purchased? Is that money part of what GM has yet to repay?

    And then there’s Ford – the poster child for what happens when a struggling company hires a qualified outsider who knows how to lead.

    Just more smoke and mirrors from the government on this issue, but no shortage of running around trying to take credit for it. Arrogance doesn’t seem to be lacking in this administration, but attention to detail and honest communication sure is. I know that’s standard fare for either a D or an R, but considering we’re talking billions, a little candor would be refreshing.

    • 0 avatar
      charly

      it is not c4c that produces the problem on the second hand market. How many cars were sold during c4c? 3 million or so and not all of them had a clunker. The real problem is that during the last 2 years almost 15 million less cars have been sold and that creates the drought in second hand cars.

    • 0 avatar
      Telegraph Road

      “And then there’s Ford – the poster child for what happens when a struggling company hires a qualified outsider who knows how to lead.”

      Bill Ford Jr personally thanked the President for the rescue of GM and Chrysler.

    • 0 avatar
      Syke

      “Bill Ford Jr personally thanked the President for the rescue of GM and Chrysler.”

      I don’t blame him. If anything, it made Ford’s already competent efforts look even better.

    • 0 avatar
      Advance_92

      If anything it’s lucky the stimulus money went to Ford suppliers so it doesn’t look like Ford got any. But really they did.

  • avatar
    twotone

    But at what cost? Let’s add another graph:

    US DEFICT

    2008 — 9.98 trillion
    2009 — 12.3 trillion
    2010 — 14.5 trillion

    Twotone

    • 0 avatar
      forraymond

      Let’s add in the cost of the two wars that were not included in the Bush Budgets, then let’s add the Medicare part D that was not in the Bush Budget either. Then let’s compare apples to apples.

    • 0 avatar
      Bokonon

      Agree with forraymond’s comment. Your numbers don’t tell the story you intend them to.

      Not only do we have a massive recession underway that is sharply reducing government revenues, but we are stuck with a yawning structural deficit that began when Bush was President and the GOP controlled Congress. The spending that Obama and the Democrats have added – including the stimulus – is only a small part of the total.

      Plus, the Democrats are placing the Afghan and Iraq war appropropriations ON BUDGET. Which the GOP did not do. They waged the wars off budget through emergency appropriations.

      So … no, this is not simply the result of the Democrats increasing spending. Nor is the GOP serious about reversing this trend … since they have zero intention of fixing the structural deficit that dates back seven or eight years, since that would require cutting spending for entitlements AND the Pentagon, plus raising taxes (or letting the Bush tax cuts expire – ).

      Make sense?

    • 0 avatar
      John Horner

      Twotone, as long as you are also rip snorting mad about the two trillion dollars of wasted Bush tax cuts, the doubling of US military spending in the past ten years and the wasted billions in the botched Katrin response … then I’m with you.

    • 0 avatar
      mythicalprogrammer

      ha! Bat girl forgot to add the tax cuts that add to the deficit too. We had two wars and medicare part D while reconciliation for tax cuts. It was a tie and you know who flew down to break that tie for tax cuts? Darth Vader himself, Dick Cheney. We’re going to fund stuff through tax cuts!

  • avatar
    Lumbergh21

    As someone who has to deal with these job reports, it’s all a bunch of BS. You have an ARRA funded project that requires four people one month to complete, that’s four jobs saved, not 1/3 of a job (4 jobs for one month divided by 12 months in a year). For them, the ideal scenario is a job that employs as many people as possible for a short time because that type of project saved/created the most jobs. In reality, the opposite is true; a long term project will save/create the most jobs because those jobs are there for the longest term until another project comes along.

  • avatar
    carguy

    The problem with all Keynesian stimulus economics is that the benefit (or damage) is very difficult to measure. Economics is the dismal science because there is no control group and nothing is repeatable. That’s why economics and politics were meant for each other: you can make all the claims you want about your policy but nothing can ever be proven.

    • 0 avatar
      cackalacka

      True, there are no vacuums and controls. But the problem with the Austrian School is that its destructive results are highly repeatable.

    • 0 avatar
      charly

      The same is true of astronomy and it isn’t called the dismal science. The problem with economics is more politics/power/money than repeatability.

    • 0 avatar
      Advance_92

      This is what bothers me when this site (and many investment sites, blogs and new programs) treat economics like first year physics where everything has a predictable outcome.

    • 0 avatar
      mythicalprogrammer

      I love Keynesian man.

      This is the problem, you can’t prove it because you probably adverted it. If you didn’t adverted it then everything goes to hell, then people will know it, and complain at you. So would you choose for everything go to hell or to take the blame and advert it?

      It’s kinda like being a system admin, when everything is fine and dandy no one thank you or notice anything. But damn, when the email server goes down, everyone goes after you. They all expect everything run fine and normal but they don’t realize or notice how hard it is for you to keep stuff running smoothly that no one actually notice your hard work.

      Whatever, we had a choice Obama/Biden vs McCain/Palin. And it wasn’t even a tough choice to make.

  • avatar
    Telegraph Road

    Without TARP money during the financial crisis, GM and Chrysler’s Ch 11 restructurings would have turned into Ch 7 liquidations, causing the bankruptcies of many parts suppliers and Ford as well. Alternative DIP financing was simply not available for GM and Chrysler. But today both are viable companies thanks to both administrations, Congress, and the Fed. Untold numbers of jobs would have been lost and the industrial Midwest economically devastated without Federal help.

    A good analysis of the situation was published this week by economists Binder and Zandi in “How the Great Recession was brought to an end” at http://www.economy.com/mark-zandi/documents/End-of-Great-Recession.pdf . The analysis also praises the timing and effectiveness of Cash for Clunkers.

    • 0 avatar
      Lumbergh21

      The title itself brings this publication into question. Show of hands, who thinks the recession (depression if you prefer) is over? Anybody? Bueller. Bueller.

    • 0 avatar
      Sam P

      Given that Zandi advised McCain during the 2008 campaign, the linked report actually has cred (as opposed to just another Obama administration PR release).

    • 0 avatar

      Sam P, While they may have been “McCain economists”, McCain and Obama were pulling apples from the same barrel. They were all rotten. I refuse to believe these yahoos given the proof that an overabundance of government spending and printing of money has caused harder times for every civilization and government throughout time. You can’t help your credit debt as an individual by maxing out those cards… Same logic applies to everything whether it is an individual or a government. If it doesnt work at home, it wont work in Washington reguardless of how many numbers or stats they try to make up.

    • 0 avatar
      psarhjinian

      Show of hands, who thinks the recession (depression if you prefer) is over? Anybody? Bueller. Bueller.

      Wonderful quote, considering the question that actor was asking was about George Bush’s characterization of Reagan’s policies as “Voodoo Economics”.

      Your point is doubly appropriate: the recession isn’t over. In a sense, the recessions of the early 1980s never really ended: real, sustainable, middle class wage started it’s erosion about that point. We’ve been recovering by numbers, in that GDP has grown, but we haven’t grown the earning power of the bulk of society; in fact, we’ve eroded it.

      We’ve replaced the engine of the economy: it used to be a lot of relatively well off people with a very small group of very, very wealthy but very fickle people. It’s not economically sustainable in the long term: that was part of Bush’s point.

      Each successive recession has wounded the middle class more and more. The emergence of credit is largely a response to this: without earning power, credit was the only way to stimulate spending. It’s a mug’s game, though: eventually you get to a point where everyone is badly overextended and the ability of the middle class to drive the economy is compromised.

      To draw this back to automobilia: a lot of those jobs are in manufacturing, as is a lot of the spending. The job base is being steadily eroded, but we’re still expecting sales to increase. Where is the money to buy these products going to come from?

      Government stimulus isn’t a bad thing: it temporarily pumps up the middle class, which is necessary for driving consumer spending and getting the wealthy to unlock their purses as well. The problem is that we need a strategy for getting well-paying jobs back en masse so that we’re not facing the same problem (or worse) in a few years’ time.

      I couldn’t say what the solution is, but what it isn’t is doing what we’ve been doing. I think it will require some ideologically uncomfortable changes on both sides of the spectrum; one one side, government can’t drive industry all the time; on the other, industry can’t continue hoovering up middle-class wealth. The nature of intervention is going to have to change.

    • 0 avatar
      Cammy Corrigan

      “Show of hands, who thinks the recession (depression if you prefer) is over? Anybody? Bueller. Bueller.”

      Ben Stein is a tosspot.

  • avatar
    Gardiner Westbound

    “If my grandmother had wheels, she’d be a streetcar.”

  • avatar
    trucosm

    counterfactuals. m’eh.

    to add another, it’s just as likely that post-Ch. 7 liquidation, you’d have GM China owned by BYD or some other PRC-based entity. Chevy, Caddy and Opel owned by the Russians and all the GM/ChryCo light truck stamping shipped to Mexico by some American private equity company.

    People would be just as mad.

  • avatar
    Mike999

    WE can Still Have China Own all of the USA!

    Just vote “Tea Party” next election!

    Oh, you don’t want that?
    You don’t want China as a super power?
    You don’t want all Jobs in China?
    You don’t want the US as the next third world country?

    Then I guess you guys are going to have to vote for that d*** “Liberal”.

    • 0 avatar
      Lokki

      Pretty words, Mike, pretty words. However you’ll have to explain how you get there for me please?

      You don’t want China as a super power?
      You don’t want all Jobs in China?
      You don’t want the US as the next third world country?

      Who is going to prevent these things, and exactly how again?

    • 0 avatar
      Lokki

      Another politics thread in an an automobile blog. I understand the need to report this stuff, but this slant is getting old.

      Hint: Go back to moss-covered classics of the Northwest.

    • 0 avatar

      Mike, Sorry but China is already a super power. Actually.. I have to correct you as well. I work for a company that is Chinese owned and they OUTSOURCE HERE! We still have one of the best work forces in the world. Personally, I believe the “tea party” is like a blow off valve. It’s giving America a way to let off steam without the need for violent uprisings such as happen in many countries. Who cares who someone votes for? That’s a personal decision and you should keep your mouth quiet about it. I’ve never understood why someone would be so intolerant of idea or opinions different than their own. Let’s keep the name calling to a minimum, accept that we are not the only superpower, and that we need to stop spending to truly take our place as a “city on a hill” again. Many people throughout time have had great ideas. However, as many have said, if you have a great idea… do something that’s helpful… but end up doing something shitty, your efforts were worthless. Good intentions count for nothing.

    • 0 avatar
      mythicalprogrammer

      You know I’ve already have a pretty bad view of the Tea Party. From the racism, to the senseless irrational knee jerk comparison to Nazism, to whatever weird none sense, and you just added more to that.

  • avatar
    Telegraph Road

    “Luckily for the bailout boosters, it will be years before Treasury fully divests from GM and Chrysler, so there will be plenty of other opportunities to declare victory.”

    The planned partial IPO of GM in October will give the nation a monetary valuation of the U.S. Treasury’s equity stake in GM and a clearer idea of the cost of the GM rescue. That’s the point of doing it before election day.

  • avatar
    TomH

    This is similar to Steven Rattner’s “Mission Accomplished” piece from last summer and an attempt to divert attention away from the fact that the auto bailout was a thinly veiled money laundering exercise for channeling funds into the UAW

    Evidently the Auto-politburo is counting on gaining support from the sound-bite satiated majority despite Lincoln’s dictum regarding the ability to fool some of the people all of the time, all of the people some of the time,

    but…

  • avatar
    Telegraph Road

    There is no need to politicize the rescue of GM and Chrysler. To their credit, both the Bush and Obama administrations contributed to its evident success.

    • 0 avatar
      Toad

      Virtually any enterprise will be “successful” if you wipe out all of their debt, unwanted contracts, and pension obligations, then throw in a few billion dollars for recapitalization. Hell, my dog can create a very successful conglomerate under those conditions.

      If that is all it takes to be successful we could restructure every business in the country by October 1st. When we are done doing that we can make ourselves taller, smarter, and vote ourselves a raise.

    • 0 avatar

      Agreed.. people need to stop the Bush vs Obama rhetoric and realize that is just used to create a divide in the country. If people focus on party affiliation, they wont focus on the actual problems. It’s not about the blame game, but it’s about the actual problem. The real problem is these companies were propped up because they were “too big to fail” while tons of little mom and pop places were hung out to dry. Gotta keep our eyes on the ball and really pay attention to these numbers. “Hold their feet to the fire” as I’ve heard mentioned.

    • 0 avatar
      1996MEdition

      Toad – “Virtually any enterprise will be “successful” if you wipe out all of their debt, unwanted contracts, and pension obligations, then throw in a few billion dollars for recapitalization.”

      The true test will be if any culture changes have been made at GM and Chrysler or is it business as usual. GM’s touting of their small volume, overpriced, 5-yrs late to the show savior tells me that not much has changed. We’ll see about Chrysler after the new line-up comes out.

  • avatar
    sfdennis1

    “For all we know, Fiat might have bought a bankrupt Chrysler with its own money. GM might have shuttered dying brands and cut its bloated capacity of its own volition. Both might even be in mediocre-to-OK shape right now.”

    HAHAHAHAHAHAHAHA….yeah, and Unicorns might fart magic rainbows that absorb CO2 to eliminate all our global warming issues as well….so we don’t need no stinkin’ climate bill or new enery policies, neither…

    “The only thing we know for sure is that the auto bailout has been a qualified success at best so far.”

    Ya know, a “qualified success” is damn well better than 8 years of the Repulican’s disasterous fiscal policies which helped to drive us into the ditch in the first place….Yeah, continue tax cuts for rich people while the middle class starves, champion unregulated ‘free’ (Ha!) markets and no regulation of industry because ‘they know best’, and sitting around with your thumb up your ass saying “NO” to everything while the economy IMPLODES ain’t gonna solve it either.

    And for all the tax haters out there, current taxation levels are at the LOW end of modern historical norms for this country…not that teabaggers or some conservatives ever let “facts” interrupt their blathering on about anything…

    • 0 avatar
      jkumpire

      BS sf,

      Since 2007 the Democratic Party has controlled the purse strings, and spent like nobody’s business. A lot of conservatives have warned for years about what might happen, but got ignored by the people you supposedly support, and now they are spending us into ruin. And you assertions about tax rates are just plain wrong.

      The problem with our economy is that government spends too much, and we can’t afford it anymore. If you want to locate to Europe or Russia to find out how life over there really is with Social democracy, then don;t let the door hit you on your way out loser.

    • 0 avatar
      Toad

      I would rather be a “teabagger” than a “teabagee,” but to each their own…

    • 0 avatar
      sfdennis1

      @jkumpire

      we were WELL on the way to ruin before 2007 with unchecked and useless war spending, virtually ZERO corporate accountability, and again, tax cuts for the wealthiest of our society at the expense of everyone else…The Republican controlled government of 2001-2007 sucked up pretty much ALL of our budget surplus and began the deficits we see today.

      I do not place 100% of the blame on the Republican’s, but all these “the debt is out of control” wingnuts were completely M.I.A. from 2001-2007 when Bush was in office, and now there’s a screeching panic that has overcome them = FAIL !

      It’s just a combination of partisan republican’s, asleep at the wheel libertarians (where where they when we needed them?!), deluded birthers, and veiled racism if they cannot hold republicans AT LEAST equally responsible for any financial problems we are experiencing in our country…

      Most respected economists also claim that the stimulus had, at the very least, some real effect on preventing an even worse financial disaster from occuring…did/does it solve the problem completely? No…but the repubs have been NOTHING but obstructionist and partisan, not putting country first at all…

    • 0 avatar
      NulloModo

      The Government has to spend. The economy will rebound quickest if the majority of the population have money to spend, which means there have to be programs that put money back into the hands of the majority of people. If 90% of our nation’s wealth is held by 5% of the population, a lot of that money is wasting away not doing anything – not being circulated into the economy and helping develop new business.

      I consider myself a social libertarian (screw and/or marry any consenting partner you want, smoke/grow/drink anything you want in your own home, etc) while my economic ideas fall more in line with traditionally socialist ideas (everyone should be guaranteed health care without devastating bills, the government should have the right to regulate pricing on certain necessities to insure that everyone can afford the basics to a quality life, etc). I’m not for unending handouts for those unwilling to work, nor do I believe in higher taxes for the lower and middles classes, but there is no reason not to put higher taxes on the incredibly rich to help promote growth throughout the rest of the nation.

      Rockefeller managed to do pretty well for himself despite a tax rate around 90%, and if we were to bring the same levels back we could redistribute wealth from where it sits now doing nothing in the hands of multi-millionaires and billionaires into the hands of middle class working people who will spend it, put it back into the economy, and encourage business to grow. Everyone wants to believe that they have the chance to be the wealthiest man in the world, and thus they rationalize not increasing huge tax increases on that upper bracket, but in practical terms if you are making $100 million per year, even if you only get to keep $10 million, after one year you still won’t ever have to worry about money for the rest of your life.

      We could have the best public education system in the world, the most up to date infrastructure, the highest quality and most accessible health care, and the most vibrant economy for new business if we could wrap our heads around the notion that our devotion to pure capitalism has allowed those in the highest echelons of income to effectively remove most of our nation’s wealth from circulation. It’s time for the majority of America to trade the dream of the one in a hundred million chance of becoming Bill Gates for the reality that 90% of our country could have a much higher quality of life at the expense of a very few that would still be very well off.

    • 0 avatar
      John Horner

      “Rockefeller managed to do pretty well for himself despite a tax rate around 90%, and if we were to bring the same levels back we could redistribute wealth from where it sits now doing nothing in the hands of multi-millionaires and billionaires into the hands of middle class working people who will spend it, put it back into the economy, and encourage business to grow. ”

      No kidding. Many of those who are rip snorting mad about the current administration also look back to the 1950s as the halcyon years for the United States. Oddly enough, they don’t want to look at what the actual income tax rates and importation tariffs were in that very same time period! If a politician in modern times advocated simply rolling back the income tax rates to those of Eisenhower’s administration they would be tarred and feathered as a communist, or worse.

    • 0 avatar
      1996MEdition

      sfdennis – “It’s just a combination of partisan republican’s, asleep at the wheel libertarians (where where they when we needed them?!), deluded birthers, and veiled racism if they cannot hold republicans AT LEAST equally responsible for any financial problems we are experiencing in our country…”

      veiled racism? Is that because all republicans are good ole’ white guys? Sounds like someone else is wearing a veil also.

      NulloModo – ” If 90% of our nation’s wealth is held by 5% of the population, a lot of that money is wasting away not doing anything – not being circulated into the economy and helping develop new business.”

      This is flawed argument. Who do you work for? Who pays you a wage for a service? Poor people? The 95% who hold the 10%? Unless you work for the government then odds are you are paid by the 5% that hold the 90%. People with wealth do not sit around on piles of money and laugh at the poor huddled masses. The wealthy invest, own businesses, create real and lasting jobs. Not the temp jobs that the current admin is declaring as a win for the unemployed. Let me keep my money and I will purchase goods, buy services, start a business, hire employees, etc. Take my money from me and my ability to do that is diminished.

    • 0 avatar
      TrailerTrash

      sfdennis1
      John Horner
      NulloModo

      Look, I love you guys/gals when you discuss the auto world.
      But you leave me gasping for my breath trying not to spill my single malt with shaking hands when you wonder off into social issues.

      You are historically and selectively wrong.
      MOST conservative mouths and pundits were all over Bush’s A#@ on his spending.
      McCain lost because most of us conservatives knew he was another spender, do what is best for him…so we didn’t vote for him.
      To remark otherwise is simply wrong, to not know history.

      One more B&B playfully and easily suggest REDISTRIBUTION of wealth as an option will force me to remove the self awarded title from my vocabulary.
      ONLY those who don’t have talk about taking from others. This is the most horrible thought of this time, that of taking from others because we feel they have to much.

      The blog talks about the savings of jobs from the bailout, as if we possibly could ever know what would have happened if these failed business were allowed to complete their own deaths.

      ANY prophesy is just that…but better left to the lady behind the curtain and her ball.
      It’s talking down to the rest of us.

      We are told we can’t stop illegals from coming because they do the jobs Americans will not.
      So we end up with crowds of punks on corners collecting money from the government(us) because there are no jobs.

      We are told millions can’t get health insurance so we are going to supply it for them.
      Then you look around here in the Ozarks and every 3 cars have occupants overweight and smoking.
      The Wal-Mart can’t keep enough electric carts around for the fat to use when shopping

      Lets keep the discussion to cars…the truth.

    • 0 avatar
      1996MEdition

      +1 Trailer Trash

      It’s Friday….where are the car reviews? How can I goof off at work all day if there are no car reviews?

    • 0 avatar
      John Horner

      Interestingly enough “trailertrash”, you didn’t respond to my actual argument about today vs. the Eisenhower years.

    • 0 avatar
      TrailerTrash

      John Horner…

      I am not an economist.
      I am a philosophy/religious studies major.
      So I try not to discuss things I am not totally trained in.
      I am somewhat aware of the human condition, especially my own.

      To try to address your 1950 period, from which I have some experience, these were years prior to the government’s creation of the welfare state.
      This was a period of massive industrial growth in America. When you are fat with food, you can waste it and not realize the waste being caused or the proper diet you should be on.

      We are now NOT fat.
      We are buried in fail policies that have become their own reason for existence. They are filled with government paid peoples that can not be fired.
      Yet we continue to create more and more of these bureaucracies.
      This is NOT the 1950 world. Please try not to use short, cut up period photos and show them as true explanations of the entire period.
      They are wrong.

      Put simply, we are now skinny and undernourished, economically speaking.
      As such we should not be trying to eat or spread dinner tables as if we were living in a glutinous time.

    • 0 avatar
      jkross22

      TrailerTrash,

      +50

      Thoughtful posts.

      JohnHorner,

      For those nostalgic for the 50’s, I’ve not heard one person wax poetically about the tax rates. It’s usually just nostalgia for one’s childhood or some fogey complaining about the damn kids on his lawn.

  • avatar
    wsn

    GM has 100k employee in NA. Let’s say, a Chapter 7 liquidation would eliminate half of that number of jobs (i.e. Chery/BYD/whatever bought the plants and fired 1 out of every 2 worker to keep the production lean.)

    That would be 50,000 jobs gone, without a bailout.

    Now, suppose the $50B bailout is paid to people at $2,000 per month. That would support 416,666 people FIVE years for doing nothing.

    So, the bailout of GM eliminated about 366,666 jobs.

    Yeah, I know that for every auto job saved there are 6 other jobs saved. But so is any other job.

  • avatar
    Telegraph Road

    The financial system and economy collapsed because the housing bubble burst, not because Barney Frank and Chris Dodd assumed more authority. The housing bubble was a bipartisan effort over two administrations, led by Mr. Greenspan.

    • 0 avatar
      Bokonon

      Hmmm … you mean that same Alan Greenspan guy who encouraged everyone to run out and leverage themselves in the housing market and get adjustable rate mortgages? The same guy who encouraged tax cuts as a way to get rid of that troublesome budget surplus? The same one who used the Federal Reserve as a weapon to shut down derivatives regulation? The same one who oversaw the inflation of the housing bubble with a wide-open Fed lending rate and a big smile?

      Oh yeah … that guy. Nobody on the right seems to want to talk about him any longer. Funny about that.

      The problem is – until people address what worked and didn’t work with Greenspan’s economic policies, we aren’t going to have an honest debate about what to do differently in the future. Like you said … both political parties are complicit. But the GOP in particular has doubled down.

    • 0 avatar
      Telegraph Road

      Yes, I mean that same Alan Greenspan guy who encouraged everyone to run out and leverage themselves in the housing market and get adjustable rate mortgages. Yes, the same guy who encouraged tax cuts as a way to get rid of that troublesome budget surplus. Yes, the same one who used the Federal Reserve as a weapon to shut down derivatives regulation. Yes, the same one who oversaw the inflation of the housing bubble with a wide-open Fed lending rate and a big smile.

    • 0 avatar
      John Horner

      How many people know that in his youth, Alan Greenspan was in the very tight inner circle of Ayn Rand, wrote for her newsletter and that they remained close friends throughout her life? Did you know that she stood beside him at his 1974 swearing in a head of the Council of Economic Advisers?

      http://en.wikipedia.org/wiki/Alan_Greenspan

    • 0 avatar
      psarhjinian

      Just to add a sex angle (because you can never have too much titillation, especially in economics) there’s some theories that Ayn Rand and Alan Greenspan may have slept together.

    • 0 avatar
      1996MEdition

      …..there goes my breakfast!

    • 0 avatar
      jkross22

      Psar,

      Wow, that’s disturbing. I wonder if the lefties on TTAC thought the same about Obama when the Rev. Wright ordeal was revealed. I’ll go out on a limb and guess no.

      When I started in business, one of the often stated marketing material quotes we used was:

      “You know us by the company we keep.” and then listed firms we had active relationships with.

  • avatar
    Conslaw

    I don’t know how many jobs the bailout saved, but I know it saved MY job. It also saved quite a few “company towns” that would have turned into blight and welfare havens but for propped open plants.

    It may be that GM or Chrysler can’t make it in the long run, but the odds are, when that long run happens, the overall economy will be better situated to take the hit.

    • 0 avatar
      Telegraph Road

      +1

      My job too was certainly saved by the rescue of GM and Chrysler. The billowing Rouge smokestacks I see from my office in Dearborn would have shut down if not for the concerted efforts of Washington to rescue the domestic auto industry and suppliers. It would have been a disaster for the region, and for the nation.

    • 0 avatar
      wsn

      It would have been a disaster for the region, and for the nation.

      From what happened to the many closed state-owned auto makers in China, it’s certainly a disaster to the workers whose skill sets are not in demand in a free market. But for the industry and nation, it clearly has been a good thing to shed some dead weight.

  • avatar
    TrailerTrash

    See, this has all got to end and end soon.

    People are seething and trying not to explode.

    The lies have to stop.

    They are sick of being told things are better when nobody can afford anything beyond the most important purchases.
    People can’t sell homes, because people can’t buy homes.

    They are fed up being told the economy is improving when all around them it is actually getting wors e. They are being told jobs are being created when all around them people are being laid off or are without jobs.

    People are fed up being told they must stop spending when their own government explains its planned escape out of debt is to spend more.

    The most horrible ecological disaster in American history has suddenly turned into yesterday’s CNN profit making sky is falling headline.

    Their fed up being told that the earth is warming because of their piggish way of life while those crying wolf live in mansions and fly private jets. When people find out Gore made millions off investments in green tech companies after screaming about the end of the world, they get even more angry.

    Now we are told our state and local law enforcement can’t enforce any laws that are federal, even when the federal laws aren’t enforced.
    …this after our entire American history being federal, state and local officers supporting and aiding each other side by side or alone.

    This mockery of logic and common sense is recognized and soon the only poll that counts, an election, will show the anger and disgust.

    • 0 avatar
      Telegraph Road

      “Their [sic] fed up being told that the earth is warming because of their piggish way of life while those crying wolf live in mansions and fly private jets.”

      The earth is indeed warming. We must find sensible public policies to cope with this.

    • 0 avatar
      Steve65

      Economic suicide is not a sensible policy.

      And it’s really hard to take seriously “austerity and pain is the cure” preaching from a guy living in a 14k square foot house.

    • 0 avatar
      Telegraph Road

      Don’t let Mr. Gore’s hypocrisy blind you of the urgency of issue.

    • 0 avatar
      TrailerTrash

      Telegraph Road

      I never implied the earth wasn’t warming.
      I don’t know if it is or is not.
      What I do know, is that we cannot be the cause of it nor can we control it.
      The hubris of those that claim we can talk nonsense do a lot of believing.
      I am not one for belief. Zealots and TRUE BELIEVERS carrying torches in the night haunt me.
      Consensus scares me. At one time it was the consensus that the earth was flat, or that Zeus was god.

      No, I am humbled and depressed to the point of drink by my insignificance.

  • avatar
    TrailerTrash

    sorry…I got a little emotional.

    The numbers are wrong.
    This much wrong makes a lie.

  • avatar
    cardeveloper

    Anyone that believes this was a company bailout, is sadly mistaken. This was nothing more then union payback for getting Obama elected. The alleged bankruptcy was a bastardization of law.

    Now, the govt today is NPV somewhere around 70 TRILLION dollars in debt. Revenues are going down, debt is increasing at an unprecedented rate, and a debt ratio that makes Greece look like austerity program. At some point it will have to be dealt with, and continuing to put it off will increase the pain and suffering.

  • avatar
    Telegraph Road

    I don’t give a F*** about the UAW. The successful rescue of GM and Chrysler salvaged the economy of the industrial Midwest.

    • 0 avatar
      jkross22

      “I don’t give a F*** about the UAW. The successful rescue of GM and Chrysler salvaged the economy of the industrial Midwest.”

      … until we’re here again. Then what? Bail ’em out again? Where’s the bailout for the failed restaurants? Oh wait, entrepreneurs aren’t too big to fail.

      The gravy train needs to stop, but as long as people keep voting in the same people, cough, cough… Barbara Boxer, cough, the same results will ensue. When Clinton and the Congress cut welfare roles, many of those folks got jobs.

      But there is no accountability. Look at those 20 odd banks that took a bailout, but paid their executives in excess of the allowed amounts. There is no accountability except at the ballot box, and most of us are too busy with our iPhones or Dancing with the Stars to notice.

    • 0 avatar
      Telegraph Road

      As Blinder and Zandi assert (see the link above), the nation would fallen into “Great Depression 2.0” and deflation without the bipartisan efforts of two administrations, Congress, and the Fed. Failed restaurant would have multiplied.

    • 0 avatar
      jkross22

      Can you please use your crystal ball and give me a few stock picks for Monday?

  • avatar
    golden2husky

    Did TTAC “self troll”…really, all that is missing is Fox News, Sarah Palin, Al Sharpton and gun control….I’ll sit this one out, thanks.

  • avatar
    Steven Lang

    I’ve already told all of you how this can be solved…

    We bring TIGHTWADS into office.

    http://www.youtube.com/watch?v=5aloZCNd_c4

    I want the guy living in the van to be our next POTUS.

  • avatar
    BDB

    Telegrap hRoad pretty much sums up my position on the auto bailouts, also thank God SOMEONE remembers this was a bi-partisan effort. I don’t live in the midwest and my state is not connected very much to the auto industry, but I’d hate to see a region of this country, any region, turn into an economic wasteland. The country needed to lend a helping hand to the midwest, and I’m happy it did. I have no problem with my tax dollars doing that.

    As to the budgets, FY 2009 was Bush’s last budget, Obama’s first budget is FY 2010. FY budgets are passed a year in advance.

    EDIT: It also nicely illustrates how out-of-touch many member of Congress are that when big Wall St. bankers came hat-in-hand begging for money in September in 2008, they got it easily, while when CEOs of industrial companies that actually make stuff asked for a much smaller amount of money they were treated like radioactive waste by many members of Congress.

    • 0 avatar
      BDB

      Everyone would also do well to read this from none other than TTAC’s own Jack Baruth from back in 2008:

      http://www.speedsportlife.com/2008/12/09/avoidable-contact-21-oppose-the-bailout-youre-a-moron/

      Says it better than almost anyone else could.

  • avatar
    NormSV650

    I know NHTSA hired a bunch of engineers when the Senate found out they had a couple of fulltime ones. Of course more staffing at NHTSA for Toyota cases!

    Does this off set the 35,000 lost with the dealership closings? Probably not. Can’t wait until we see how many $100,000 government jobs related to auto industry it created.

    Ten board members including car czar in s task force to over see bankruptcy of two companies with a secretary and support for each. I could probably find more.

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