Bailout of the Auto Industry

22 Apr

I’ve noticed that Obama has attacked Romney for having opposed the bailout of GM and Chrysler, declaring that Romney would apparently have just preferred these giants of American industry and culture to go bankrupt.

But what really happened?  Thousands of people lost their jobs because the government took them through a “soft” bankruptcy anyway.  Factories closed, suppliers, closed, dealerships closed — all at the direction of our all-knowing government.

But, wait!  The “soft” part of this is that Obama preserved much more of the unionized labor force than a pure bankruptcy would have — and he preserved more of the debt.  He took care of his union cronies, but left the two companies in more danger of future bankruptcy.  Another bailout coming?

And for those who listen to the rhetoric about these companies having paid back the bailout money, let’s see — it is my understanding that, yes, they did pay back the loans.  BUT, we, the taxpayers, are still hugely invested in GM and Chrysler stock, and I believe these stocks are under water.  So our money is still at risk.

And getting riskier, since the American people refuse to have electric cars rammed down our throats.  Oh — yes — by the way — the taxpayer is on the hook for both the subsidies to GM on every Volt sold, but also for the tax break that the buyer receives.  Oh — yes — by the way — production of the Volt was suspended due to lack of interest on the part of the car-buying public.

On the other hand, a “regular” bankruptcy, as Romney would have preferred, would have let these companies get out from under more debt (including huge indebtedness to the unions), and restructure themselves as a company SHOULD do.

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