FRONT PAGE CONTRIBUTOR
Barack Obama’s Promises and the Geraghty Effect
As I may have mentioned a time or two, all statements from Barack Obama come with an expiration date. All of them.
– Jim Geraghty (HT:NRO)
Like the warranties sold by Radio Shack or a put option on the NYSE, Barack Obama’s solemn political promises are heartfelt. Also, like the warranties or the aforementioned put options, Barack Obama’s solemn promises have a sunset date. The sunset date is mentioned in and amongst a lawyerly thicket of Garble-Speak. It is accessible only to people who spend so much time on political news that they need to get out more often and develop a decent tan.
Our latest expired promise involves our so-called automobile industry. In July of 2009, President Obama exuded ebullience in the short-term burst of expenditure following the Cash For Clunkers program.
“You now have all those U.S. auto companies showing a profit. They’ve rehired 55,000 workers. We are going to get all the money back that we invested in those car companies,” Obama said in the interview.
We now fast-forward to 1 June, 2012, and hear the following assessment from Secretary of Turbo-Tax Timothy Geithner.
“We cannot guarantee their success, and at some point they may stumble. But we’ve given them a better shot,” Geithner wrote in an opinion piece in Wednesday’s edition of The Washington Post. “While we will not get back all of our investments in the industry, we will recover much more than most predicted, and far sooner,” he wrote.
Of course, if we follow the rabbit hole to the bottom, we discover that the Sec Turbo’s Statement is about as accurate as his Recovery Summer Editorial. It turns out that GM didn’t really repay Paul by selling to Simon. It sponged off of Peter instead. Senator Charles Grassley explains how GM really turned it around below.
Neil Barofsky, the government TARP watchdog, testified before the Senate Finance Committee. He explained that GM did not use earnings to repay its TARP debt. The April quarterly report to Congress from his office stated: “The source of funds for these quarterly [debt] payments will be other TARP funds currently held in an escrow account.” GM filings with the SEC reveal that GM was paying 7 percent interest on a $6.7 billion TARP debt. The filings also confirm that the source of funds for GM’s debt repayments was a multibillion-dollar TARP-funded escrow account at Treasury; that means it was taxpayer money — not earnings.
Senator Grassley continues with an explanation of exactly how large of a financial loss TARP ate in order to accommodate and subsidize the inexcusable failure known as the US auto industry.
The truth is that GM originally received over $49 billion from the US government and many billions remain to be recouped. That is why we were told at the Senate Finance Committee hearing that TARP losses related to the auto companies are expected to exceed $30 billion.
So like President Obama’s “Days, Not Weeks” War in Libya, we find ourselves faced yet again by the stark and shameless dishonesty of this man we elected on a platform of “Hope and Change.” Perhaps Megan McArdle of The Atlantic gives us the best perspective on what this chicanery has cost the United States.
..burn $10-20 billion in order to give the company another shot at life. To put that in perspective, GM had about 75,000 hourly workers before the bankruptcy. We could have given each of them a cool $250,000 and still come out well ahead compared to the ultimate cost of the bailout including the tax breaks.
But Meghan, you don’t tell us the half of it! Give the individual workers $250,000 to go live happily ever after, and you improve America in the following fashion. Chrysler, GM, The UAW and Barack Obama all at least partially go away. In November 2012, we can at least accomplish 1 out the 4. In professional baseball, at least, that isn’t entirely bad.