Skip to comments.How much did the auto bailout really cost us?
Posted on 05/09/2011 1:05:46 PM PDT by Nachum
E.J. Dionne seems perfectly comfortable with the fact that he doesnt understand economicsas long as the Washington Post continues to allow him to interpret economic events in a manner that comports with his political predispositions. Dionne sees GMs recent good fortune as evidence of the propriety of government step[ping] in when the market fails. Dionne, like others before him, stands slack-jawed, in awe, ready and willing to buy the Brooklyn Bridge, donning narrow blinders and viewing just a narrow sliver of the world, oblivious to the fact that related events are transpiring in the other 359 degrees that surround him. Dionne is the perfect Bastiat foil.
Last week, GM reported first quarter profits of $3.2 billionits best quarterly performance in ten years and its fifth consecutive profitable quarter. Thats good for GM (although it remains to be seen how GM performs going forward). But that is really beside the point. Dionne creates a straw man, contending that bailout critics thought that the government couldnt resuscitate GM. But the most thoughtful criticismmy opposition to the bailout, at leastwasnt predicated on the notion that GM couldnt be saved by the government extinguishing debt, rewriting ownership, providing cash infusions, and underwriting sales rebates. That opposition was borne of concern that that the government would do just that. And it did.
In the process of saving GM (which I still contend would have survived without the intervention and the number of jobs losses in the industry would have been comparable to the job losses that occurred anyway),
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It is still costing us.
IIRC, this "profit" is because the US government owns GMs pension debt.
Check out GM cars you see on the road. Many of them have SG license plates...state government. This whole thing sounds like corruption to me.