GM Bailout: Bait And Switch And Drive That Lemon Away

-By Warner Todd Huston

General Motors was too big to fail. This is why President Obama had to ride in on his white steed with billions of taxpayers dollars in hand to bailout GM rechristening it Government Motors. Besides, we were told it would be a great deal, a money maker, right? Well, not so much. The Administration has reported a dramatic increase in the money We The People have lost on the GM bailout.

This week the Treasury Dept. has announced that the estimates of our loss has gone from $14.33 billion tax dollars to $26.6 billion.

To put it in terms easier to understand, for the American people to just break even on the bailout deal the more than 500 million shares owned by the U.S. Treasury must sell at $53 a share. Unfortunately for all of us, GM stock has tumbled to just $22.99 (as of closing on Nov.14). We are waaay off from the break even point, folks!

So, what is Obama going to do about this failed bailout program? How is he going to rectify it all? He intends to make it worse by changing fuel standards to the point where new cars will cost another $2,000 per car.

Obama has decreed through his powers to regulate that the auto industry must raise fuel efficiency standards by five percent by 2025. There is only one little problem with these demands. Current technological development and science cannot yet reach those goals. Obama has set standards just because he feels like it, not standards based on realistic goals.

These requirements will make cars harder to afford for folks in the middle class and lower middle class not to mention the additional burdens it will place on small businesses trying to purchase cars for their businesses.

Worse, with the costs of new cars skyrocketing, the costs of used cars will go up commensurately. And none of this will help GM’s stock prices go up high enough for the American people to break even on the billions our president gave away to the auto giant.

Sadly, Obama’s polices don’t appear to be too big to fail.

Comments

Leave a comment
  • IIRC, and I do, the idea of using TARP money for GM and Chrysler started under the Bush administration. See for instance, the Wall
    Street Journal of December 20, 2008 at http://online.wsj.com/article/SB122969367595121563.html.

    Now, it does say that it left the bulk of the decision to Obama, but Bush could have let GM and Chrysler fall off the cliff before Jan. 21, 2009, if he wanted to. Hence this is not the partisan issue you continually try to make.

    You also don't seem to have faith in such things as the article today that Northwestern scientists have come up with a battery that will have much more capacity and cost a lot less. Sometimes technology can be pushed, especially since it appears that other carmakers signed on to the proposed regulations.

    Maybe we should stay hostage to the oil potentates such as the psycho socialist Chavez.

  • This author is a moron to say "bait and switch and drive off with a lemon". For those who don't know, GM is now making world class cars. This moron is too stupid to know or his mind is polluted with bias.

    Take at a look at the Chevy Cruze which I own is the best car in it's class, and the number of sales will attest to that.

    Because you've had a miserable life, don't try to make others miserable.

  • In reply to Capt America:

    ... says the name calling jerk.

    For those who have a hard time with concepts, the article did not mention a thing about the quality of the cars being made, but of the efficacy of the bailout being made. Apparently high concepts are too difficult for "Capt America's" tiny little mind to grasp.

  • "Current technological development and science cannot yet reach those goals (of a 5 percent increase in fuel economy)."

    You have to be kidding me with this statement. What are you basing this statement on? Mazda is using skyactive technology that is pushing their mpg into the high 30s. The Chevy Equinox, a very large automobile, is getting 32mpg without any pricey gimmicks. Volkswagon's TDI vehicles are now into the mid to high 30s and even 40s. These are just a handful of affordable high mpg vehicles that were no where close to these numbers just 5 or 10 years ago.

    What I find most laughable about this constant drive away from "socialism" is that so-called socialist economies like Canada, South Korea, and Germany are handing it to the US right now, while people like you cling tot he notion that a US government has no role in guiding technology, health or education. Shame on you for helping to hold this country back from true progress. The reality is that your ilk is in the minority now, and you better get used to it because the middle class is pissed off and no longer the silent majority.

  • In reply to Progreg:

    Uh, Canada is not a socialist government. In fact, of late, they are more conservative than WE are! And "my ilk" is NOT "in the minority right now." Republicans hold the House of Reps and more state houses than the left. So, you make yourself foolish with your uninformed claims.

  • In reply to publiusforum:

    Really? I lived in Canada for more than 25 years my friend. The government subsidizes education, healthcare on a massive scale.
    It is not even close to conservative. Its not perfect, but it works really well. Taxes were only marginally higher than they are in the US when you factor in outrageous american property and local taxes. Canada, like most of the rest of the developed world understands that the if you free market every aspect of society greed will inevitably corrupt, and you end up with zero safety nets, and essentially chaos in the middle class. But hey, if you think the you're on the side of the middle class I wonder why your side is having so much trouble picking a candidate for president? Could it be that the days of fear-based manipulation and failed trickle-down economic policies are done? Look, you had your chance , since Reagan, the US has bent over for corporate interests and lowered the taxes to nil and gutted social programs other than military. It didn't work and the proof is in the pudding. Canada, Germany, South Korea, Norway..these are balanced economies who understand that without government involvement in education, healthcare and science you end up with a massive never-ending recession. We will see who is right about who the middle class backs, but the polls are clearly on the side of progress.

  • In reply to Progreg:

    LOL. Your ENTIRE message is fear-based. But, go ahead. Turn us into Greece. Your ideas are bankrupters.

  • In reply to publiusforum:

    It was tax evasion, corruption and a lack of productivity that brought Greece down. Facts, facts, those silly things called facts. The reason that the republican party is having so much trouble finding a candidate is because the lies are so much harder to sell these days. Fact about greece: http://articles.cnn.com/2011-10-27/world/world_europe_greece-tax-evasion_1_tax-evasion-prime-minister-george-papandreou-income-taxes?_s=PM:EUROPE

Leave a comment