Posted on 11/22/2010 8:05:13 AM PST by MichCapCon
The Center for Automotive Research (CAR) released a study concluding that the U.S. government’s $80 billion bailout of the auto industry saved more than 1.14 million jobs. CAR is located in Ann Arbor.
David Littmann, senior economist with the Mackinac Center for Public Policy, gave his thoughts on the study’s findings.
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The very concept of a "taxpayer-forced bailout saving 1.14 million jobs" is ludicrous and does great violence to the genuine workings of a market-system. It appears to be political advocacy at its crudest level, rather than a legitimate economic analysis. The study is ridiculously biased and sentimental, rather than economically-rooted in basic principles or financially objective.
For example: What's the economic impact (private sector investment and spending) of wiping out bond holders?
Without the uncertainties created by government interventions and a fiat-money-created "stimuli," how much additional real spending, investment, and employment would have occurred?
Had GM been forced to confront a normal Chapter 11, at what fortuitous prices might their firm have been acquired, their most productive capital and labor absorbed, and a credible long-term (moral-hazard-free) environment have been created, and without a future fraught with coercions of profit-killing labor contracts and strikes?
(Excerpt) Read more at michigancapitolconfidential.com ...
Short answer: No.
GM would have renegotiated with all its creditors and with the UAW.
Auto workers would have had to make some drastic compromises based on the market value of their labor, but they would have kept their jobs.
And a rejuvenated GM would have created more jobs.
And millions of consumers would not have sworn off purchasing new GM (and Chrysler) products for life.
This communists regime hiding the real truth. Spreading this garbage in the media leads the weak minded to thinking all is well and the communists takeover is working.
My math and dates may be a little off, but my overall all point is accurate. Unemployment was at about 4% when Bush started the ball rolling on first bail out in 2007. Three years later, and after the second Onada bailout, unemployment is at least 18% (the gov’t numbers lie). So, the claim that 3 million jobs were saved is a lie unless you posit that 3 milliion additional jobs would have been lost without the bailout.
That premise, IMHO, is flat wrong. Reason: Left to its historical correction ability, and with minimal gov’t intrusion, the economy would already be steaming along at an average, conservstively, 3.5% to 4.5% annual GDP growth.
On the other hand, a claim that 3 million unions jobs (auto industry, civil service and teachers) may have been saved might have some validity.
Both the Kenyan and his Idiot are gonna be near here tomorrow boasting how they “saved” this Chrysler and GM dependent town.
http://kokomotribune.com/local/x1996461817/Obama-Biden-to-visit-ITP-II
BTW...the (R) IN State Treasurer who fought the Obama takeover of Chrysler in bankruptcy court won the county (and the state) with 62% of the vote despite a balls-to-the-walls union effort against him.
Is a Rabbi Catholic?
Does a wild bear ask to use your bathroom?
Is a bird in the bush worth two in the hand?
No, but remove the pensions and give them only SS instead and that will be a good start.
In the end bankruptcy would have been better.
It would have allowed for the real restructuring that is necessary to make these firms viable. All they did was kick the can down a ways but in years to come GM will still suffer from the same weaknesses they did three years back.
We’ll have to ask the Chinese for the exact count.
Thanks MichCapCon.
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