My eyebrow rose last week when I read that GM CEO Ed Whitacre’s Wall Street Journal op-ed was titled “The GM Bailout: Paid Back in Full.” This isn’t true–GM may have paid off loans from the federal government, but the Treasury is still GM’s majority shareholder, at a cost of about $50 billion. That money won’t be recouped (at a probable loss) until GM goes public. Wall Street Journal headline writers: The GM bailout is not paid back!
Then I saw Whitacre make the same claim in this new ad, and I really lost it:
Even President Obama, in his weekly address, acknowledged that the GM stock still has to be sold. Here’s Mickey Kaus:
Update: After the bailout, GM and Chrysler made “few changes to [their] pension plans,” which are of the “defined benefit” variety, according to the Government Accountability Office. As a result, taxpayers may have to shore them up with another $10+ billion. … 10:18 A.M.
Kaus links to a Shikha Dalmia column you can read here.
In his weekly address, the president proudly announces that the “investments” the Treasury made in the banks and autos in 2008 and 2009 will be paid off at a fraction of the estimated cost. That’s swell, but Obama’s rhetoric not only ignores the losses from AIG and Fannie and Freddie, he also assumes the money should have been “invested” in the first place. In my opinion, TARP was necessary in the emergency circumstances surrounding the Lehman Crisis. But I’m still waiting for an explanation of what made Detroit so special–other than the power of Big Labor.
