Obama is Wrong About Auto Bailout

National Legal & Policy Center ^ | August 5, 2010 | Peter Flaherty

[jazusamo]

 

The auto bailout is a massive failure. It did not save jobs. It is a fallacy to claim that more jobs exist in an economy because particular firms have been saved from going out of business. Automobile jobs exist in the United State because of consumer demand for automobiles. Bailing out car companies does not increase demand, nor will it increase the number of cars built and sold.

All the auto bailout did was shift jobs from one set of firms to others. Because GM and Chrysler are poorly managed, and are joined at the hip with the United Auto Workers, they will not produce cars as efficiently as competitors. In the long run, the bailout will cost American jobs.

All car companies, but especially the bailed-out ones, are burdened by government regulations and mandates, like the recently tightened fuel efficiency standards. Obama said today that the standards are “good for consumers.” Millions of consumers voting with their dollars are more competent than government officials to decide what kinds of cars are built.

Obama also claimed the standards are “good for the environment.” In the past, increased fuel efficiency has resulted in people just driving more. If fuel economy can be mandated without negative economic consequences, why not require cars to get 200 or 300 MPG?

Obama is dramatically lowballing the cost of the bailout. He cited a figure today of $60 billion. The total is over $100 billion if you include two GMAC bailouts, the parts supplier bailout, cash for clunkers, GM and Chrysler warranty guarantees, and TALF subsidies for auto loan securities. It is likely taxpayers will never be paid back for bailing out GM but Goldman Sachs and other Wall Street firms will profit royally from the GM initial public offering.

Ford is the recipient of a $6 billion Energy Department loan, which will enable it to produce “energy efficient” cars, in which it otherwise would not invest. The taxpayer is subsidizing electric automobiles, the widespread use of which would create problems. The power grid in many parts of the country is already overburdened.  For the most part, electricity is produced by burning fossil fuels. Electric cars are not zero emission.

[jazusamo]

Obama did it for his union thug buddies.

[bgill]

Obama is Wrong About Auto Bailout

Fixed it.

[La Lydia]

And others.

"U.S. automobile giant General Motors Co. said Tuesday it plans to invest close to $500 million in its Ramos Arizpe plant in northern Mexico to produce a new line of engines as well as a new vehicle...General Motors has invested $4.1 billion in Mexico over the last four years." -- WSJ

Your tax dollars at work.

[jazusamo]

You’re right...Isn’t it just wonderful our tax dollars bailed them out so they could invest more in Mexico. Grrrrr

[Blood of Tyrants]

Saved jobs? Hell, the VERY FIRST thing they did was order the closing of hundreds and hundreds of dealerships and the layoff of tens of thousands of mechanics, salesmen, and administrators.

[bt579]

Obamas an ignorant marist ass. He will destroy free enterprise with the support of the 51% of leeches who depend on government to survive. EXPATRIATE NOW !!!!!!!!!!!!!!

[Da Coyote]

Not to worry for me at least.

GM and Chrysler will never see my money again.

[Jack Hammer]

Of course it’s a massive failure from the business point of view.

But Obama is a socialist in the Soviet mould, and his criteria for business success is a very different one from that of the rest of us.

If there’s employment while turning our crap that doesn’t sell and that falls apart almost immediately, then the president considers it a “success.”

The problem is that, as history plainly shows us, the Soviet Union was a miserable failure and fell apart in a supremely ignominious fashion - a lesson completely lost on our Fearless Leader as he hunkers down in the White Dacha or tees off for yet another round of golf.

[La Lydia]

... the VERY FIRST thing they did was order the closing of hundreds and hundreds of dealerships ... BASED ON RACE.

[Gene Eric]

>> Obama did it for his union thug buddies.

Exactly. He saved the union, and everyone knows it.

[NewHampshireDuo]

GM and Chrysler will never see my money again.

Don't worry, it's getting siphoned out of your wallet a bit every day.

[jazusamo]

Yep, Zer0 doesn’t give a tinkers damn.

[facedown]

Your tax dollars at work.

BASED ON RACE.

It gets even better:

The carmaker gave $41,000 to groups associated with lawmakers, the vast majority of it -- $36,000 -- to the Congressional Black Caucus Foundation, the company reported on a disclosure form last week.

[Recon Dad]

The union guys must be thrilled.

[Howie66]

Stroker isn’t very often right about anything.

[ExTxMarine]

“GM and Chrysler will never see my money again.”

You mean directly out of your pocket - they already are seeing your “money again” - indirectly.

But I understand what you mean. I have looked at the new GM/Dodge products and NONE of their products are good enough to pay for - TWICE!!

Now understand, I am a Dodge man - up until three months ago I had a 2007 Dodge Ram 1500 and a 2007 Dodge Durango.

[ExTxMarine]

“...up until three months ago I had a 2007 Dodge Ram 1500 and a 2007 Dodge Durango.”

I traded up in size and down in payment. And I even get to feel better about myself. I now own a 2006 Ford F150 and a 2001 Ford Excursion!

Actually, I feel MUCH better about myself! LOL!

[truthguy]

"U.S. automobile giant General Motors Co. said Tuesday it plans to invest close to $500 million in its Ramos Arizpe plant in northern Mexico to produce a new line of engines as well as a new vehicle...General Motors has invested $4.1 billion in Mexico over the last four years." -- WSJ

Your tax dollars at work.


Or you could say putting manufacturing in Mexico helps to contain costs. In this way they can stay competitive. Besides GM sells a lot of cars in Mexico. I've been there and seen them. I saw more American Cars in Mexico than California.

[Gator113]

Obama is not wrong... HE LIED.

[Vendome]

And the Volt is a massive scam as well.

$400million in taxpayer monies underwrote the developement costs.

GM is thinking they will sell 10,000 of these things, first year.

That puts the real value of the car not at a $40k sticker but a total cost of some $80k!

Last year hybrids accounted for approximately 2.5% of all auto sales.

Does anyone think their sales will be an accretive value of any meaningful effect?

[jazusamo]

I think GM is whistling Dixie on the Volt.

It’s over priced at $41,000 and there was an article a day or two ago that said dealers were going to try and add $20,000 of dealer markup on the first ones. LOL!

I think it’ll be the GM version of the Edsel and I’m not the first one to say it.

[USALiberty]

Imagine if we had let the banks, Fannie, Freddie, AIG, the automakers, etc. go down and just stood back. Imagine the PROSPERITY we would have now!

[editor-surveyor]

We would at least have the solid foundation on which to build real prosperity.
.

[editor-surveyor]

“I think it’ll be the GM version of the Edsel and I’m not the first one to say it.”

.
You might be more right than you know. The Edsel was also introduced during a recession that was actually the last dip of the depression. The planning for the Edsel had started in 1953 when some were saying that the economy would be rising, but it didn’t until JFK’s tax cuts.
.

[Vendome]

I saw that adding $20k to the sticker.

What a joke.

They are suppose to save money and this POS doesn’t come with all the amenities of a Ford Taurus.

In fact, I just read somewhere you won’t even have vents in the back.

This car is like moving back to the 50’s.

LAME-OH

[jazusamo]

Yep, I remember the Edsel well.

My girlfriends neighbor who was the postmaster of our town bought a brand new ‘58 and was he ever proud of it.

A couple years later he was so upset about it he reconfigured the letters on the rear to read D E L S E.

[editor-surveyor]

Boy did those things have the horsepower!
.

[jazusamo]

I never drove an Edsel but a lot of the late 50’s and 60’s cars with the larger V-8s had way more horsepower than needed but they were sure fun to drive. :-)