By on May 31, 2011

“Midwestern auto-industry towns that were hit hard in the recession are becoming an important backdrop for President Barack Obama and other Democrats hoping to use reinvigorated factories to paint a picture of the improving economy ahead of the 2012 elections.”

That’s how the Wall Street Journal starts off an article on how “Democrats hitch a ride on the auto-industry rebound.” As we had noted on Memorial Day, our beloved bail-out is becoming the battle cry of the 2012 presidential campaign. Says the Journal:

“The White House has even taken some credit for recent success at resurgent Ford, the only Detroit auto maker to avoid bankruptcy and a bailout, arguing that a collapse of GM and Chrysler would have crippled Ford as well.”

Meanwhile in the opposition camp …

Republican presidential contender Tim Pawlenty on Wednesday blasted the auto bailout as “sweetheart” deal that favored union workers at the expense of shareholders and creditors.  “It was another example of crony capitalism,” the former Minnesota governor said. “If you’re a big business or bailout business and you’ve got buddies in big government, big unions, you get the special deal. But if you run the hardware store, run the butcher shop or run the bicycle-repair shop, then you’re out of luck.”

According to the Wall Street Journal,

“The U.S. Treasury has said it is unlikely to fully recover $1.9 billion still outstanding on the Chrysler rescue. The U.S. would lose around $10 billion if it were to sell its remaining stake in GM today.”

Write it off as campaign donations.

Before you write “this is getting old,” or “move on, nothing to see,” consider this: All presidential hopefuls think the bailout is very pertinent, and we’ll hear of it until November next year. Better get ready. Or earplugs.

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43 Comments on “How You Contributed $11.9 Billion To The Presidential Election...”


  • avatar
    KitaIkki

    Ford is still ahead of either GM or FIATsler.

    Ford is the only real American automaker.

    • 0 avatar
      vento97

      > Ford is the only real American automaker.

      RIIIGGHT…

      If it weren’t for Ford of Europe, this REAL American automaker would continue to manufacture Town Cars, Explorers and Expeditions like there’s no tomorrow….

      • 0 avatar
        JJ

        Ford got bailed out too, both through receiving billions in government loans and indirectly because many a Ford supplier either got bailed out itself or would have gone bust if it weren’t for GM and Chryco getting bailed out. The suppliers that would have went down would in turn almost certainly would have sent Ford over the edge as well; some people apparently forgot that at the time they were running huge operational losses, didn’t have the products needed to compete any more than GM did and had to sell Jaguar, LandRover and Volvo for a reason.

        If you type in ‘Ford bailout’ in the search box on the top left you can easily see this for yourself (article upon article, for example https://www.thetruthaboutcars.com/2010/12/blue-ops-the-clandestine-bailout-of-ford/), which is why it strikes me as a bit strange that Ford is now being touted as the example of a US manufacturer that survived without a bailout by TTAC itself, because this is simply an oversimplification of reality at best.

    • 0 avatar
      John Horner

      Yeah, think of all those world beating Fusions which were co-developed with Mazda and are all built in Mexico. ‘merica!!!!

      • 0 avatar
        VanillaDude

        There is a difference between owning the plantations and working in the fields. Whoever owns the plantations, makes the decisions and keeps the wealth. The fact that Americans pick the cotton doesn’t make a foreign car company American. I bet there are more foolish Americans believing their American-made Honda is “American” than there are foolish Mexicans believing that their Mexican-made Fords are “Mexican”.

      • 0 avatar
        Benya

        And who exactly owns Ford? It is publicly traded, so we can assume there are at least a few Mexicans owners along with the Americans. Does that make it a muli-national company?

      • 0 avatar
        OhioPilot09

        VanillaDude, I’ll forgive you for being ignorant on the “American” Honda. Many Hondas, especially for the N.A. only models, are developed 100% in the U.S.A. From styling, R&D, purchasing, manufacturing, etc are all here in America with 95% (at least) American workers. Of course there are Japanese transplants and you can say all the profits go back to the motherland but those profits are also used to re-invest in the U.S. Which Honda recentely did with the new plant in IN and I know the Koreans are doing down south. Just saying…

  • avatar
    OhioPilot09

    “this is getting old,” & “move on, nothing to see”

    There I said it!

  • avatar
    VanillaDude

    The auto bailout would not be an issue in the presidential election next year if the US economy improved enough to assure voters that the problems faced in 2008-2009 were behind us. It has not.

    The bailout would not be an issue in the presidential election next year if the loans were paid back.

    Another reason we will see this issue remain alive is because it reinforces the crony capitalism and crony unionism backroom deals the current administration continues to make in DC. One cannot call for shared sacrifices, yet continue to demonstrate that political connections with the right people avoids sacrifices. The Bailout is another example of corrupt dealmaking.

    The Bailout was necessary. How it was handled exposed to voters how badly the Federal Government operates. It exposed voters to the corruption in DC. It demonstrated to voters how calously their taxed wages are flushed away without concern. It exposed the unfairness of an administration elected to reinforce faireness. It exposed the current administration’s claims of openess and transparency as egregious lies.

    TTAC can debate the success or the logic behind the amount of Bailout money spent. We can debate if GM will survive, thanks to the Bailout, and for how long.

    But in a country where the Federal Government is demanding more daily decisions from us, when they inject government into our lives, our daily lives become more political – and that sucks. I long for a day when the government in DC returns to being an invisible partner in this country, not it’s nagging, stupid mother in law.

  • avatar

    Ford already had Jaguar, Land Rover and Volvo on the market before the bailout. If they lost any supplier’s they would have found others to replace them. Ford was making sound business decisions for years before the bailout. Chrysler’s sales reflect that it is not out of the woods yet.

  • avatar
    Bridge2farr

    Well said Van Dude!

  • avatar
    FreedMike

    “Republican presidential contender Tim Pawlenty on Wednesday blasted the auto bailout as “sweetheart” deal that favored union workers at the expense of shareholders and creditors. ”It was another example of crony capitalism,” the former Minnesota governor said.

    The same guy who defended tax breaks for oil companies making tens of billions in profits is really calling someone out for crony capitalism? Really?

    REALLY?

    At least the bailout saved jobs. Does it really matter if the jobs were union or non-union jobs? Think of it in those terms if you will – and Pawlenty and the right wing certainly do – but all I see is people doing an honest day’s work and getting paid for it. Who the hell knows what would have been if rightwingnut ideology had ruled the day?

    • 0 avatar
      VanillaDude

      You are claiming that Pawlenty is dishonest because of your belief that oil companies should not be given tax breaks because they are profitable. What a mix-up! Where to begin?

      Pawlenty’s statement is worthy of serious debate because one of the horrible things we saw was a reversal of centuries of corporate law without any new legislation, debate or vote. This should concern you even if you are not a shareholder, or just flat-out hate business. The Bailout broke laws awaiting court action to mend. What we saw was a presidential administration breaking corporate laws in order to save their preferred political organizations. Remove the partisan spin and you can better see how bad this was. We have centuries of corporate bankruptsy laws capable of correctly and fairly handling the Bailout. When you have an ad hoc government throwing legal precedent out the window, you replace stability with chaos and make the business and legal environments too unpredictable to invest within. Pawlenty is right to address this horrible situation.

      Comparing Pawlenty’s statement regarding the illegal sweetheart union deal within the Bailout with his support of tax breaks for oil companies is foolish. It is like a child’s sense of reasoning when he accuses his father of hypocracy when Dad skipped a salad during dinner when Dad reprimanded the child for playing with matches.

      And the bailout didn’t save jobs. It merely spred the negative impact of job loss over a longer period.

      There is nothing “right wing” about it. Just correct or incorrect, and you have been proven incorrect and too partisan on top of that.

      • 0 avatar
        FreedMike

        You are claiming that Pawlenty is dishonest because of your belief that oil companies should not be given tax breaks because they are profitable.

        No, I didn’t say he’s dishonest. You’re putting words in my mouth. What I did say was that he’s decrying crony capitalism – the bailout – out of one side of his mouth and approving another form of it – tax subsidies to companies that clearly don’t need them – with another.

        If the former is crony capitalism, the latter surely is as well.

        And for a country that supposedly replaced “stability with chaos,” and made “the business and legal environments too unpredictable to invest within,” the Dow’s – better known as individuals and companies investing in companies and other institutions – is doing rather well, wouldn’t you say?

        Or would the country have been more stable and ripe for investment if the Big Three had gone under, and turned our recession into a far worse downturn?

      • 0 avatar
        MikeAR

        FreedMike, your hatred of oil companies is making you think that they are doing something wrong when thye aren’t. They are doing their taxes the same way you do yours. They take advantage of breaks and loopholes just like you. Are you evil too? If you’re going to be consistent you have to complain about GM using carry forwards and GE using every break they can to pay no taxes whatsoever. You have to be consistent, your favored companies have to be held to the same standard as the evil oil companies.

        Now if you want to discuss the tax code and how it should be changed and loopholes and subsidies eliminated, then lets have that discussion. I’m sure that there will be lots of agreement on that.

  • avatar
    PenguinBoy

    Maybe it’s time to change the name of this site to “The Truthiness about Politics”

    It is impossible to know what the true cost of the bailouts was, as it would be necessary to compare with the total costs of a liquidation that never happened.

    Can anyone think of *any* current mainstream automaker from Europe, Asia, or America that has *never* been the beneficiary of some market distorting government interference of some sort?

    Bertel’s a pretty knowledgeable guy, but I suspect he has a vested interest in the success of some of the Asian marques.

    • 0 avatar
      geeber

      GM and Chrysler would not have been liquidated. Other manufacturers would have picked up the valuable parts, or else new owners would have used standard bankruptcy procedures to reorganize the companies into viable entites.

      • 0 avatar
        HoldenSSVSE

        And if we had adopted the Toyota and Honda will take up the slack approach, we would be in a world of crap right now. Sometimes the improbable needs to be considered, no matter how improbable. Who’d a thunk it, North American manufacturing capacity really is needed.

  • avatar
    Tommy Boy

    Whatever the bailout started out as, once Obama came into office it morphed into a political payoff (using extra-legal means) to a favored group (UAW / AFL-CIO), using taxpayer dollars (first borrowed from Communist China), just as the “stimulus” really didn’t promote “shovel ready” jobs so much as preserve a bunch of unionized public sector jobs.

    We can think of it as a “crony unionism” counterpart to “crony capitalism.”

    The best thing to do is not reward this (as columnist Michael Barone termed it) “gangster government” behavior by refraining from purchasing UAW-assembled products.

  • avatar
    Darkhorse

    If I correctly recall what Romney meant when he said “Let them go bankrupt”, he was saying that GM and Chrysler should file a classic Chapter 11 with the US government becoming the Debtor in Possesion (DIP). This would have allowed the government to provide funding during their reorganization. The government didn’t want this option because this would have allowed the courts to terminate any contract including the UAW’s.

    This is a case of Romney thinking like a businessman and not like a politician. Hence MSNBC’s shill and his piece. Obama and Rahm Emanuel followed their motto of “never let a crisis go to waste” and used this to their political advantage. They think like politicians since that’s all they’ve ever done. It will work for them. Enjoy four more years of this after 2012 since the GOP doesn’t have a chance.

    • 0 avatar
      Brad2971

      The GOP quite easily has a chance as long as the following question:

      “The Dow Jones 30 is doing better. Are you?”

      Is answered by most people “No.” Which is clearly the case right now. And frankly, that’s Tim Pawlenty’s point (not to mention Sarah Palin’s point as well).

      BTW, the only thing that might have been different about a GM/Chrysler bailout with a McCain presidency is that the UAW would have had much more substantial haircuts than what they already received. (And if you think the UAW got off relatively free and clear in this bailout, why do you think Bob King is rattling his tin cup at the transplants?)

  • avatar
    Jellodyne

    I feel half dressed, showing up without a tinfoil hat.

    • 0 avatar

      It appears that those of the left side of the aisle are incapable of debating an issue without resorting to namecalling. Your idea of debate is calling someone a ‘wingnut’ or inferring that we’re crazy as you did in this comment.

      Of course the last thing the left wants is actual debate. The left’s favorite method of debate is STFU.

      • 0 avatar
        MikeAR

        Ronnie, they can’t afford to think. If they did think then they would realize just how silly and unrealistic their beliefs are. Plus the’ve worked themselves into a frenzy because they’ve been told that anyone who disagrees with them is stupid and evil. All in all, it’s a pretty good way to live your life, no thought necessary, all emotions.

    • 0 avatar
      Jellodyne

      > It appears that those of the left side of the aisle are
      > incapable of debating an issue without resorting to namecalling.

      [4 minutes later]

      > Ronnie, they can’t afford to think. If they did think then
      > they would realize just how silly and unrealistic their
      > beliefs are. Plus the’ve worked themselves into a frenzy
      > because they’ve been told that anyone who disagrees with
      > them is stupid and evil. All in all, it’s a pretty good
      > way to live your life, no thought necessary, all emotions.

      I was going to pick out the part that was unproductively insulting, but I ended up quoting the entire MikeAR post.

      Ronnie, I didn’t get into debating the points because I have no illusion that I’ll convince you guys. All I’m trying to say (in a lighthearted way) is that I think your various conspiracy theories are a bit overwrought. I’m just checking in, registering my disagreement on those ideas. Never at any point did I say STFU, or try to tell you guys what you can and can’t say.

      My opinion? I think that the administration has done what they could with a really, really bad situation, and I think the results so far are better than I expected. Frankly, I was on the side of ‘let them go bankrupt.’ Certainly not the party line. In retrospect, I think the bailouts were a better choice. At least it appears to be so far. But I also think the unions were ‘saved’ not out crony unionism, but because there was an honest feeling that that was what was best for the American auto worker. Are you convinced? No, I didn’t think so. I was better off with the one liner.

      • 0 avatar
        mazder3

        It’s really sad but true but MikeAR’s comment applies equally to both sides. Politics suck. It makes fellow countrymen into enemies. We as a society have to rise up above our base emotions as we have some really big issues that need fixing and we’re not going to fix them by spouting conspiracy theories and name calling.

        McCarthyist is to communist/socialist as wignut is to moonbat.
        Saul Alinsky is equal to Karl Rove.
        Pissed-off redneck conservitive is equal to aging hippie liberal douche.
        Fox news is MSNBCx5 (ratings-wise anyway)
        Freedom is equal to Opportunity.
        Giant douche is equal to turd sandwich.

      • 0 avatar
        MikeAR

        There is one huge differnce between right and left, the right side generally wants to be left alone. They do not seek power and control over others. They react to overreaching by the left and get painted as zeolots by those who really do want power.

        What conspriracy theories have you seen here? There must be one somewhere or you wouldn’t have made the tinfoil hat crack. If you see a conspiracy let the resat of us know. You just got called on your conservative-as-crackpot bs, that’s all.

    • 0 avatar
      Jellodyne

      > There is one huge differnce between right and left,
      > the right side generally wants to be left alone.

      Well, THAT explains the Patriot Act, the TSA, the attempts to legalize what 2 consenting adults do in the privacy of their own bedroom, etc, etc, etc. I will grant there were plenty of democrats in on the massive privacy erosion during the previous administration, and I’ll grant that the current one hasn’t improved the situation, but those charge against our privacy and general rights to be left alone were led by the right.

      > They do not seek power and control over others.

      You know, you might be on to something… Most of the people running for office (aka ‘attempting to seek power and control over others’) on the Republican ticket these days are not true conservatives, since they clearly don’t believe in ANY of the ‘small government, states rights’ conservative tennants. But regardless of what you want to call Neocons pandering to the religious right for votes, they’re very much attempting to seek power and control. That’s practically the definition of politics.

      > They react to overreaching by the left and get painted as
      > zeolots by those who really do want power.

      Or it could be that the left and moderates aren’t actually twisting their mustaches and laughing evilly over your inevitable demise. It’s just possible that they are trying their best to lead the country as best they can.

      > What conspriracy theories have you seen here? There must be
      > one somewhere or you wouldn’t have made the tinfoil hat crack.

      You’ll not that despite your defensive reaction, I replied to the original poster, not a thread participant. “How You Contributed $11.9 Billion To The Presidential Election campain funding” is certainly the elephant in the room. Also Pawlenty’s croney capitalism claim, and claims that GM and the unions got treatment that the neighborhood hardware store would not have. No shit, Tim.

      Let me throw this out there. GM and the UAW are both organizations which each are legally permitted to exist and represent a large number of people. The UAW represents the workers and GM represents its stockholders. The UAW actually represents a lot more Americans than GM. You can argue that the bankruptcy was a result of these two organizations locked in a death struggle. The way the auto bailout was structured allowed both of them to survive, sort of. I know some of the people in this thread would say that GM has more of a right to exist than the UAW, but why is that exactly?

      > If you see a conspiracy let the resat of us know. You just got
      > called on your conservative-as-crackpot bs, that’s all.

      I didn’t get called on conservative-as-crackpot BS, because I never made that claim. I got called out and then insulted by you, as someone who is incapable of thought (sounds less than human!) because I called out certain crackpot theories (in my opinion, of course) as crackpot theories. . I’m sure it’s totally coincidental that there have been a ton of recent conspiracy theories (birthers, Obama is a muslum, Obama is a socialist, everything Glen Beck ever said, etc).

      • 0 avatar
        MikeAR

        Ok so many things to call you on nad so little time. First, did I make this between Republican and Democrat? No I didn’t so you either can’t comprehend or you deliberately chose to mischarcterize what I said. You are one of two things and neither one is good. Calling me incapable of thought was a great way to advance the discussion but hey, that’s how you guys do things. You might try thinking for a change, your life would change completely.

        All those things you bring out in your last paragraph, just where were they introduced into this discussion? Hint, you brought them up, yoou nutty conspiracy theorist you. What about your sides theories; the CIA controls the world, 9/11 was an inside job, and a lot of other things. So I guess that your theories are all fact by your standards.

        One last thing, who wants speech codes in schools, who has improved upon the Patriot Act to give it more teeth, which administration wants to expand the TSA’s authority over all mass transport, which President now claims he has the authority to order assasinations of anyone designated as an enemy of the state even US citizens in this country? I could go on but I don’t have time and it’s just too easy rebutting anything you can come up with in your vivid imagination.

  • avatar
    VanillaDude

    I know some of the people in this thread would say that GM has more of a right to exist than the UAW, but why is that exactly?

    Because there would be no workers if there was not any work. This is not a zero sum game. Productivity expands the market. When there is no work, there is no expansion. When the cost of workers exceed the value of the product, the product dies and all productivity transfers towards another producer.

    The fact that you have to ask this question exposes you as someone who simply doesn’t understand common truths, or one that has been led to believe that common truths have been replaced somehow.

    I was once similar to you, but discovered that my education degrees only led me to ignore reality. Open your eyes.

    • 0 avatar
      Jellodyne

      There’s got to be a balance between the value of work to the producer and the value of work to the worker. The most efficient worker for the factory owner is unpaid slave labor. It is in the best interest of the factory owner to pay their employees as little as possible, and it is in the interests of the employees to earn as much as possible. The rules of capitalism don’t only apply to factory owners.

      Anyway, I’ve been dragged into this conversation too long. Like I said, I’m not going to convince you of anything. Just because someone comes to different conclusions than you doesn’t mean they’re not thinking, and that their eyes are not open. Your talk as though your opinions are the bedrock truths upon which reality is constructed. My humble viewpoint can leave no imprint on something so perfectly formed and impenetrably defended.

      • 0 avatar
        VanillaDude

        There’s got to be a balance between the value of work to the producer and the value of work to the worker.

        There is naturally. You don’t like where it balances.

        The most efficient worker for the factory owner is unpaid slave labor.

        Not true. Slave labor is inefficient, expensive and immoral. What a silly thing to claim.

        It is in the best interest of the factory owner to pay their employees as little as possible

        Not true. It is the best interest of the factory owner to pay employees enough to keep the employees’ skills, experience and loyalty with a wage that is competitive enough to satisfy both parties. Underpaying an employee rewards the owner’s competition when the employee leaves for a higher wage, bringing along the experience, insider knowledge and skills developed at the employer’s expense. You are wrong.

        , and it is in the interests of the employees to earn as much as possible.

        Also not true. There are several factors as to why an employee would be willing to be paid less, but remain with an employer. Millions take part time jobs willingly when they could take full time positions. Ask any working mother. Ask any intern.

        The rules of capitalism don’t only apply to factory owners.

        What rules? So far you have been spouting out nonsense discredited decades ago. Have you owned a factory? Have you employed someone for full time work? Your statements are straight out of an obsolete text book published in 1920. Eugene Debs wouldn’t have believed that crap and he ran for president almost a century ago.

        Honestly. How could you still believe the BS we were forced to memorize in college? I had to do it in two languages. I did it for the grades and the degrees. You actually believed it?

      • 0 avatar
        Brad2971

        I’m going to take a decent guess and say that you’re one of those folks who thought the 1950s/early 1960s were the apex of American power and prosperity. And that you’re going to stick to that thought come hell-and-high-water, never mind the obvious fact that the conditions that created such “prosperity” were as unsustainable as buying a $300K townhome in Las Vegas on the hopes you can flip it and get a $25K profit.

        The last decade has taught me a hard lesson: True economic, social, and technological advancement does not occur until the assets that help make such advancement possible are cheap enough for purchase by as many economic players as possible. Regrettably, that includes labor.

      • 0 avatar
        MikeAR

        Brad, please explain more throughly what you mean by your post. I’d like to read just what your thoughts were when you wrote the post.

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