Geithner's Spin: Auto Bailout A Success

-By Warner Todd Huston

At the Detroit Economic Club today, Treasury Secretary Timothy Geithner tried to claim the auto bailout is a success.

It certainly doesn't seem like a success for the taxpayers. GM stock is about $30 today, and unless it gets up to $54, the taxpayers lose money on the deal. Why would it go up? You want to fight high gas prices by buying a Volt? How does $41 grand a pop sound? And still GM loses money on every one it sells even at that price. Not only that but we are seeing that government subsides for electric cars is good tax money wasted in any case.

It doesn't get any better. Worldwide, U.S. cars aren't selling worth beans and domestically, GM is lagging because people who hate the bailouts won't support it with their car-buying dollars any more than they did with their votes last year when they kicked out every incumbent they could find who'd been for it. And GM still has all its old problems, too, like those big fat union pension obligations. Sadly, nothing that caused GM's financial trouble has been fixed. But the spin continues. Last December, Geithner said the auto bailouts were "investments," which "will show a positive return, not a negative return."

As the 2010 midterms proved, the people know better. They know government can't run an automobile company and they know the deal was mostly political payback to the UAW, the biggest culprit in why GM and Chrysler were in trouble in the first place -- not that company execs did themselves proud, either.

People didn't believe Geithner when he said we'd make money on the deal, and they were right. Today's speech was more of the same, and it still won't fly.

Geithner, Obama and the rest of the gang that brought us this monstrosity may or may not actually still think they kept the economy from chaos by the bailout, but they're just believing their own scare tactics if they do.

As George Mason University Professor Todd Zywicki pointed out in depth, a normal bankruptcy would have worked just as well. Sorry, Timmy. Your spinning wheel is getting us nowhere.

Comments

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  • Get your facts straight. The auto bailout was on Bush

  • In reply to Crowned:

    You seem not to know that Obama is the one that has appointed all the members to the GM board. This is no mess you can pin on Bush. Nice try, though.

  • In reply to publiusforum:

    That's because when the Obama administration took office on Jan 20, it inherited nothing in the auto industry; no staff, no stacks of analyses from experts, and no plans of any kind from the Bush administration.

    When Bush decided in late December that GM and Chrysler were not going to go bankrupt on his watch and had shoveled that 17.4 billion of TARP money into the companies in an attempt to keep them afloat, his administration made no attempt at restructuring.

    After the negligent mismanagement of the federal loan money Bush gave GM CEO, Rick Wagoner and his team in '08, to the tune of 21 billion of cash in a year and 13 billion in the first quarter of 2009, Obama's administration was forced to restructure and create some form of organization that Bush failed to put in place after Bush loaned the 17.4 bill to the car companies.

    What does appointing a board of financial experts over a company that bankrupted itself have to do with the fact that Bush was the one to announce and hand over the bailout money?

    Here is Bush's press conference approving his auto bailout plan: http://youtu.be/1N5kRVfmMoE

  • In reply to Crowned:

    Facts are all relative man.

  • In reply to koolking83:

    "Relative" thinking is what turns you into a person with no principles.

  • In reply to publiusforum:

    I love how easily you label me void of principles. Black and White thinking is indicative of mental illness/cognitive impairment my friend. W was afflicted with such a disorder. Your problem is that your selective with your facts, and feel you (and "your kind") have a copyright on the "principles" which fuel our Country. I simply disagree.

  • In reply to koolking83:

    Reading English would be nice. You should try it. I did not accuse you of being void of principles. I don't know you and could not make that judgment.

    A proper reading of what I ACTUALLY wrote would inform any sensible reader that I was saying that relative thinking leads turns one into a person with no principles.

  • In reply to publiusforum:

    Uhhhhh, I got a good idea. Let's give dem car companies 17 and a half billion of our taxpayers' money to bail them out of the financial disaster they got themselves in and not install independent boards to create oversight and ensure it doesn't happen again. Is that okay daddy Bush?

  • In reply to Crowned:

    I have a better idea. Give them nothing and let them fail.

  • In reply to publiusforum:

    Very thoughtful and insightful retort sir.

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