A billion here, a billion there, and before you know it . .
Would you hire President Obama as your financial adviser? Three years ago his administration invested more than $100 billion in taxpayer money to bail out General Motors. On Tuesday, the entire company, not just what the government owns, was worth less than $34 billion. By anyones definition, that investment is a glaring failure. Yet over the last few days the Obama campaign, in a $25 million marketing blitz, has flooded the airwaves with ads in battleground states, claiming the bailout should be counted a rousing success.
Unfortunately, assertions that all loans have been repaid to the federal government, that the bailout saved more than one million American jobs, that U.S. automakers are hiring hundreds of thousands of new workers, that GM is again the number-one automaker all are based on creative accounting.
The money the government spent adds up quickly: $50 billion in TARP bailout funds, a special exemption waiving payment of $45.4 billion in taxes on future profits, an exemption for all product liability on cars sold before the bailout, $360 million in stimulus funds, and the $7,500 tax credit for those who buy the Chevy Volt. GMs share of other programs is harder to quantify but includes, for example, some of the $15.2 billion that went to Cash for Clunkers. Those costs are in addition to the billions taken from GMs bondholders by the Obama administration.
Obamas economic advisers told him during an April 2009 meeting that job losses in the auto industry would be only a fraction 10 to 20 percent of these claimed numbers, even for the much weaker Chrysler. The advisers reported the obvious: Bankruptcy would not kill all jobs at GM and, even with cutbacks, suppliers would pick up other work. But Obama keeps using numbers that his own advisers told him were wrong.
Even saving 20 percent of 400,000 comes at quite a cost at least $780,000 per job. How many workers would have been willing to quit working for GM for a $400,000 severance payment?
The number-one automaker assertion is no more accurate. Obamas sales totals include 1.2 million mostly cheap commercial vehicles built by Chinas Wuling, a company in which GM owns a small stake
Obama and GM Cook the Books - John Lott - National Review Online