The GM Plan

C

czygvtwkr

Guest
kwillia said:
Saving General Motors from bankruptcy was among President Obama’s most frequently cited achievements when he ran for re-election last year. Democrats everywhere touted the company’s revival as proof of the 2009 bailout’s wisdom. That was then. Now, Obama has quietly released the auto manufacturer from a bailout requirement that it increase its production in the U.S. Instead, GM is spending billions of dollars building up its production capacity in ... China.

This is happening despite the fact that the Treasury Department has to date recovered just $36 billion of its original $51 billion loan to GM. By most analysts’ predictions, American taxpayers will be out approximately $10 billion when the remaining stock is sold off. Which is a long way of saying that it now appears that taxpayers paid $10 billion to make it easier for GM to accelerate its foreign outsourcing and send more manufacturing jobs to China.

Examiner Editorial: GM got bailout, now ships jobs to China | WashingtonExaminer.com
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And they called Romney an outsourcer.
 
Tilted

Tilted

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Government sells the last of its GM stake: Treasury

The U.S. government ended up losing $10.5 billion on the General Motors bailout, but it says the alternative would have been far worse.

The Treasury Department sold its final shares of the Detroit auto giant on Monday, recovering $39 billion of the $49.5 billion it spent to save the dying automaker at the height of the financial crisis five years ago.

Without the bailout, the country would have lost more than 1 million jobs, and the economy could have slipped from recession into a depression, Treasury Secretary Jacob Lew said on a conference call with reporters.
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The $10 Billion loss is, in my view, far from the most troubling aspect of the auto industry related bailouts.
 
Larry Gude

Larry Gude

Strung Out
Tilted said:
The $10 Billion loss is, in my view, far from the most troubling aspect of the auto industry related bailouts.
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The last 10-12 years has seen momentous changes to the very fabric of this nation and it's not really even talked about. Even more so from '08 on.

Amazing.
 
Larry Gude

Larry Gude

Strung Out
Without the bailout, the country would have lost more than 1 million jobs, and the economy could have slipped from recession into a depression, Treasury Secretary Jacob Lew said on a conference call with reporters.
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That thinking is so effed up. Those jobs, by his view, were unsustainable, which is not true, and just would have evaporated into thin air and yet, somehow, they needed to be 'saved'?

:banghead:
 
Tilted

Tilted

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Larry Gude said:
That thinking is so effed up. Those jobs, by his view, were unsustainable, which is not true, and just would have evaporated into thin air and yet, somehow, they needed to be 'saved'?

:banghead:
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And I think statements like that (the one you quoted) obfuscate what happened with the 'auto bailout'. The suggestion is that without the bailout the going concern would have ceased with the result being great damage to the economy. I think that suggestion, if it were earnestly made rather than just vaguely implied so as to skirt under the radar of critical thinking, would be quite sillily made. Obviously the going concern had substantial value, certainly on the backside of normal bankruptcy proceedings where it could have been separated from most of its crippling liabilities. That was likely going to happen anyway. (I'll defend that assertion if some think it incorrect.)

The effect of the bailouts was to protect particular creditor interests and to ensure that they emerged from the situation as whole as could be, even if that meant doing additional harm to other creditors and leaving the going concern in worse shape than it could have been had the government not taken over and perverted the bankruptcy process. The companies (GM and Chrysler) were not bailed out, they weren't saved. They went bankrupt, they were destroyed - as they should have been. Government money did not save them. It was the going concerns that were 'saved', and it was bankruptcy that did that not government money. Government money saved UAW retirees and current employees, it kept in place, for the most part, their highly advantageous deals (which likely would not have survived more ordinary bankruptcies); and less notably it may have saved some other interests. The new GM and Chrysler, though the former is certainly in much better shape than the old GM was, would likely be better off today absent the bailout - at least, absent the second round of the bailout.
 
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