The Detroit Free Press’ announcement on Wednesday that taxpayers lost more on the General Motors bailout in 2009 than originally thought was brief, to the point, and missed most of the real story behind the GM bailout. Taxpayers lost $11.2 billion following the government’s sale of the last of the stock it held in GM following the company’s government-assisted bankruptcy and restructuring, according to the announcement.
The key quote from a Treasury spokesman, however, was revealing. Said Adam Hodge: "The goal of Treasury’s investment in GM was never to make a profit, but to help save the American auto industry, and by any measure that effort was successful."
Not if one was a bondholder in GM. Not if one believed that a company should be run by experienced automakers and not by government bureaucrats. Not if one believed that unions and their benefits should also be subject to negotiation during bankruptcy. Not if one believed that the Constitution was still valid, preventing the firing of a chief executive by the president of the United States who himself knows little if anything about the auto business — the same man who exposed his vast economic ignorance by remarking how sad it was that automatic elevators had necessarily replaced elevator operators!
Not if one believed that an ordinary bankruptcy and reorganization would have saved GM, rather than the hurried “363” bankruptcy rushed through at the last minute. Not if one was concerned about precedents being set to be used in the future when some entity is deemed by government bureaucrats as too big to fail. Not if one is persuaded that the free market would have rescued GM and turned it into a better company than the one that just suffered downgrades from Wall Street.
Former GM CEO Rick Wagoner was asked to “step aside” when the Obama administration determined, on its own, that Wagoner — a 31-year veteran of the auto business and GM’s chief operations officer and former chief financial officer — was no longer fit for duty in the brave new GM conjured by the administration.
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