Via HotAir, Rep. Paul Ryan (R-WI) on “crony capitalism.”
You may have read reports from the Obama Administration or seen ads on TV claiming that General Motors has fully paid back what it owes you the American taxpayer.
These claims struck me as odd and misleading. The federal government still owns over 60% of this auto company. This so-called repayment is actually a transfer of $6.7 billion from one taxpayer-funded bailout account to another.
As this is your money, I think you deserve some clarity on this shell game. My colleagues Congressmen Jeb Hensarling, Scott Garrett and I have asked Treasury Secretary Tim Geithner to provide an updated, accurate, and honest account of the taxpayer money that is still propping up General Motors.
If anyone is owed a clear and honest explanation it is those hit hardest by the downturn in the auto industry, including those I serve in Janesville, Kenosha, Oak Creek and the surrounding communities in Southern Wisconsin.
It is time to put an end to the crony capitalism in Washington.
Ed’s exit question: “Does the FTC not concern itself with government-owned businesses? Crony capitalism, indeed.”
Moe Lane
Dan McLaughlin
Steve Maley
Daniel Horowitz
Seeing a GM ad makes me ill. It is grotesque that the government would disadvantage FORD
Mike gamecock DeVine (Diary) Friday, April 30th at 12:37PM EDT (link)and punish Toyota. Sick
Mike DeVine’s Examiner.com and Charlotte Observer columns
“One man with courage makes a majority.” – Andrew Jackson
This is all a way to make GM and Chrysler automakers of the Government
Richard Mullins (Diary) Friday, April 30th at 12:48PM EDT (link)Later on they might make not buying a GM or Chrysler a crime. It’s time to kill this ownership now before we lose more money. I remember telling my dad that if the Federal government keeps GM and Chrysler for more than 6 months that it be really bad for the US. Both are nothing more than money losing entities and therefore we should even own them.
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Joe Biden is like a Decrepit Park owner with a Meth lab that happens to not only be a dealer but a user.
Let’s Bankrupt the Democratic paty. Make spend all the money to defend thier candidates.
amen, cause all it is, is a welfare plan for us to guarantee union "jobs" and pensions-nt
Mike gamecock DeVine (Diary) Friday, April 30th at 1:23PM EDT (link)Mike DeVine’s Examiner.com and Charlotte Observer columns
“One man with courage makes a majority.” – Andrew Jackson
GM jobs...
leftybehind Saturday, May 1st at 8:16PM EDT (link)In 2009 GM employed 250,000 approximately. The loss of those jobs would have flooded many a job market already reeling. The semi-skilled labor probably would still be unemployed today, and still be suckling off tax payers.
More or less than now? I haven’t seen proof one way or another whether the loss of that business and those jobs would’ve been worse than saving GM. If there are numbers crunched somewhere, I would love to see the side by side comparison of the money spent, and the burden of losing GM completely.
Well, let me give you something to research
Jack_Savage (Diary) Saturday, May 1st at 9:44PM EDT (link)At the exact same time GM was in trouble, a company based in Richmond, VA was liquidating. The company was Circuit City. Because it was non-union and had the misfortune of not sucking up to Barack Obama and the Democrat thugs, they had their going out of business sale and closed the doors. It sure didn’t help things from an employment standpoint, but apparently we were all able to live through it.
I don’t care what comparison you use, saving GM wasn’t worth $50 billion. Period. Their cars left too many people on the side of the road, and the unions had sucked the remaining life out of them. They needed to die.
The company that?
SteveLA (Diary) Saturday, May 1st at 9:56PM EDT (link)Jack
The same company that fired all it’s sales people, offered them their old jobs back at a reduced salary? That one?
The company that used to be “Electric Avenue” as part of Montgomery Wards, or as we used to call them Monkey Wards?
Sorry, not that sad to see them go out of business. .
______________________________________
Competency over ideological purity and litmus tests
Exactly my point
Jack_Savage (Diary) Saturday, May 1st at 10:18PM EDT (link)No one should be sad to see anyone go out of business if they make decisions that lead to that outcome. At one time, Circuit City had the most highly trained and dedicated employees in the industry and the most advanced compensation and delivery systems available.
The employee decision you mention led directly to the bankruptcy outcome. I don’t understand the point you are trying to make – is it that bad decisions should be bailed out, or should not be bailed out? That GM should have gone into bankruptcy, or that the government did the right thing by bailing them out? Or that you just don’t like Circuit City?
It's called "bankruptcy" you idiot.
mbecker908 (Diary) Saturday, May 1st at 9:54PM EDT (link)GM should have declared BK, the court would have done the right thing by protecting the secured holders and would have restructured the UAW contracts on the spot. The only thing that got propped up was overpriced UAW “jobs”.
GM would still be around, they might even have a shot at being profitable.
Rather inflammatory aren't we.
leftybehind Monday, May 3rd at 7:55AM EDT (link)How would bankruptcy save jobs?
Usually that requires restructuring, it doesn’t just wipe the slate clean for them to go on performing as usual.
Saving those jobs is costing jobs elsewhere.
Achance (Diary) Monday, May 3rd at 8:29AM EDT (link)All three of the “Big Three,” Ford is only a little better, are simply manifestations of the kleptocracy of the Third Sector in this Country. The only “private sector” industries that are unionized are those that rely on government money, government permitting, or are a regulated monopoly. The auto industry relies on government permitting/regulation and to a large degree on government money even before the bailout.
Since the Nadar days of the late ’60s, the auto industry has relied on the favor of the federal government to keep environmental and safety regulations in check enough for it to make and sell a marketable product. Consequently, it had to have the favor of the unions especially but not exclusively when Democrats were in power. Consequently, rather than collective bargaining based on the relative economic power of the union versus the company, the union could essentially blackmail the company politically; play ball with us or we call our friends in Congress and legislate you into oblivion.
The Delphi bankruptcy was the bellwether. The rest of the industry should have gone bankrupt to escape their unsustainable legacy labor costs. Because of foolish federal legislation, the taxpayers would have been on the hook for the lucrative retirement and H&W for a guy who last worked putting the third lugnut on the right rear wheel of a ’57 Edsel, but that would have been cheaper than owning the money-losing company and the legacy benefit costs, which is the current situation. Every taxpayer dollar that is going into keeping unprofitable companies afloat, is a dollar that isn’t out working in the economy elsewhere and giving someone else a job. As to the 250K job loss you lament, that is only about half of the new jobless claims in our faltering and overtaxed economy EVERY WEEK.
In Vino Veritas
I don't care one way or another about "those jobs".
mbecker908 (Diary) Monday, May 3rd at 8:53AM EDT (link)The US government gave GM $50B. $6.7 was a “loan”. $13ish went into an “escrow account”, basically for cash flow needs, the rest – $30B – went for “equity”. At the time of the equity purchase – in other words, the government bought stock in the company – the market cap was less than $4B, I’m sorry but I can’t find the exact number. Bottom line, the government paid roughly ten times what the market cap of the stock was worth. Today, that stock is worth about $400M. Hell, the NYT has a market cap that’s three times GMs.
Oh, and lets not forget that GM is currently pimping for another $10B or so in a “low interest loan” for new tooling to meet the new government EPA standards.
Oh, and how much money did GM make in the last reported quarter? Hint, it wasn’t in the black. It won’t be this quarter either. GM is nothing more than Medicare on wheels. Their board of directors now consists of essentially reps of the US Treasury and the UAW. Neither of whom have a clue about running a company profitably or care about it either. They both know how to suck cash out of the federal treasury – make that pull cash off the federal printing presses.
As far as restructuring, the profitable parts of the company could have been sold off and run by real businessmen. Some jobs would have been left and they would be jobs that pay what they are worth – which isn’t a bad payday – but the the UAW would be no more.
If you think for one second that GM going into BK would have been tough, just wait until the folks on main street really figure out what the hell is going on in DC and they elect an Administration that will shut down most of the domestic side of government. All those $100K government toads who couldn’t find a real, productive job hit the streets and you’ll be able to buy a five BR house in MD or VA for five figures.
Paul Ryan continues to impress
RedBeard Friday, April 30th at 1:19PM EDT (link)He speaks clearly and understandably, obviously based upon strong principles and education on the issues. Tells it like it is, in other words, without hedging, covering his bets, waffling, etc. This man needs to have the Speaker’s gavel.
Now, that begs the question: Why aren’t we hearing the same clear, undiluted, focused comments from very many other Republicans? Speaking the truth is really not difficult, if one stands on a strong foundation of principle. Whoops… asked and answered.
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Government Motors and Chrysler
Loren Heal (Diary) Friday, April 30th at 1:38PM EDT (link)should be sold. If that makes them fail, then it does. They should have failed last year.
If the Treasury takes a loss, the it does. That’s the nature of paying too much for stock. Besides, someone will come out ahead, probably enough ahead to pay the difference in taxes.
Other short term negative effects I would dispatch with similar arguments. Every second that passes during which our government owns a car company is an affront to the Republic and its Constitution.
–
Join the Concord Project, and follow @lheal, if you dare.
"Why aren’t we hearing the same clear, undiluted, focused comments from very many other Republicans?"
ColdWarrior (Diary) Friday, April 30th at 2:18PM EDT (link)In my humble opinion, even if the other Republicans know the truth, they have no real incentive to stick their necks out because they are afraid of the flak they would receive from the likes of Keith Overbite, who might call them “The Worst Person In The World.” As long as the make-up of the Republican Party remains the same as in the 2008 election cycle, with half the precinct committeemen slots unfilled and the half that are filled split about 50-50 between conservatives and RINOs, history tells the long-time incumbents that, under the status quo, they have a better than 90 per cent chance of getting re-elected.
But what if we conservatives united in every consgressional district? And invaded the grass roots of the Party?
Assume, for example, that overnight, in a particular long-time Republican congressman’s district, the conservative registered Republicans flock into the Party precinct committeemen ranks by the thousands and organize themselves to get the vote out on primary election day for a conservative challenger to the incumbent. Even the conservative long-time Republican incumbents don’t tell their conservative Republican audiences to come into the Party as precinct committeemen, because they TERRIFIED that, maybe, some newcomer will challenge them in the primary, running as a “true” conservative who won’t, as a newcomer, bow to special interests or compromise their principles to “go along to get along (almost all incumbents are beholden to some special interest and have “traded” their votes in return for a vote on some pet legislation).
Cajoling the incumbents won’t work. The ONLY thing they fear is a threat to their re-election chances. And the ONLY way we can create that threat is if we INVADE and TAKE OVER the Republican Party.
See the link below for the strategy.
For Liberty,
ColdWarrior, PC
Conservatives, UNITE! CHANGE the Republican Party and save the world by UNITING INSIDE the Party as precinct committeemen. NOW!
In 2012, will YOU become a “voting member” of the Republican Party in your precinct?
Where it all started. Twitter @kaltkrieger
Unified Patriots.
Learn how to GOTV at The Concord Project and at Procinct and
The ad was factually accurate
wildbilll Friday, April 30th at 3:37PM EDT (link)I like reading this blog, but I am dismayed at the perpetuation and blind acceptance of the false claim of using TAPR money to pay off other TARP money.
GM was purchased by us, the taxpayers in a 363 sale during the bankruptcy.
Part of the price paid was the incusion of the account with the extra money in it to assist the cash flow.
GM also had some loans outstanding with the government.
They took some of the extra money in the bank that was depositied as part of the equity paid by the US in the 363 sale to retire the loan.
They could not legally give the money back to the US. They could use to to pay down debt, as they did.
GM did the responsible thing with that paid in capital and used it to pay off a creditor. What people need to understand is the US is not just a creditor. They are an equity owner. When the IPO comes along, the US will be able to sell their interest in GM.
Can anyone disagree that at the end of the day, the taxpayers have less capital extended into GM than they did before? It’s as if some want it to fail so they can blame Obama. I don’t like him but I am able to look past that and see the bottom line here.
Let’s all hope GM does well so we can all get our money back. The story is that the US is making money on the Citigroup and PNC bailouts, lets all hope for the same with GM. Everyone should buy a GM vehicle to help make that happen.
The plot thickens...
rbdwiggins (Diary) Friday, April 30th at 10:32PM EDT (link)It’s a political ploy, and a cover-up?…
GM is using taxpayer’s money ($6.7 Billion) to pay back taxpayer’s money ($49.6 billion) in order to get more taxpayer’s money ($10 Billion) from DOE that it doesn’t have to begin to repay until after the government sells its equity shares in the company.
Looks more like the Obama Administration used the illusion of “repayment” to hide the refinancing scheme from the American public, and the “new” debt-obligation to US Taxpayers will be $52.9 Billion.
“Well, the trouble with our liberal friends is not that they are ignorant, but that they know so much that isn’t so.” – Ronald Reagan
So what GM dealership do you own?
izoneguy (Diary) Friday, April 30th at 10:42PM EDT (link)GM makes a crappy product.
Made by overpaid union scum.
I actually owned a few GM vans….
What piles of crap.
GM & Obama are bloodsucking parasites on America.
The sooner we get rid of GM & the UAW the better.
Those who had once simpered: “I don’t want to destroy the rich, I only want to seize a little of their surplus to help the poor, just a little, they’ll never miss it!” – then, later, had snapped: “The tycoons can stand being squeezed; they’ve amassed enough to last them for three generations” – then, later, had yelled: “Why should the people suffer while businessmen have reserves to last a year?” – now were screaming: “Why should we starve while some people have reserves to last a week?” – Atlas Shrugged
Meet the "New GM"
6eorge Jetson (Diary) Saturday, May 1st at 12:14AM EDT (link)Same as the Old GM
It’s still losing money hand over fist.
Had he not meant to mislead, Govt Motors Central Planning Committee Chairman Ed Whitacre would have said something like:
Click to see full size image
Well Ed Whitacre couldn't be a part of GM and tell the truth
Richard Mullins (Diary) Saturday, May 1st at 12:23AM EDT (link)So you must lie because they are appendages of the Federal Treasury.
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Joe Biden is like a Decrepit Park owner with a Meth lab that happens to not only be a dealer but a user.
Let’s Bankrupt the Democratic paty. Make spend all the money to defend thier candidates.
Factually accurate? Technically accurate? Accurate baloney?
RedBeard Friday, April 30th at 7:58PM EDT (link)Ryan was quite correct in his assessment. There were just enough facts in the GM ad to make it believable. That does nothing to lessen the deliberate attempt to deceive.
Standard-bearer for grouchy curmudgeonry since, oh, 1975 or so.
D'oh
RedBeard Saturday, May 1st at 3:56PM EDT (link)Again, I failed the “Reply to This” test. My post above was aimed at wildbilll.
I don’t know if wildbilll works for GM, owns a dealership, or is part of the Obama cabal, but I would suggest to him that deliberately misleading commercials like the one in question will do nothing to improve GM’s image. Quite the contrary.
When I trade in my GMC pickup in 18 months or so, the actions of GM will determine whether or not I will consider another GM product. If I see honesty and hard work, stuff that is clearly leading to a restoration of GM as a non-governmental entity, I might want to support the effort. If I see more smoke and mirrors, and a continuation of lousy management, my choice will be a Ford F150. It’s called a free market (at least for now, until Obama and his congressional goon squad wreck the whole thing) and GM management had better start understanding that fact.
Standard-bearer for grouchy curmudgeonry since, oh, 1975 or so.
Deliberately Misleading
leftybehind Saturday, May 1st at 8:26PM EDT (link)You would be surprised how a well worded commercial, where they don’t lie, but let a poorly informed consumer make a judgement (like EVERY commericial) that would most likely result in a positive view of GM, stengthening the likelyhood of GM selling a car, and further increasing the chances of -not- burning a bigger hole in our collective pockets.
I don’t see how GM making commercial about how much money they owe, or how poorly designed their cars have been would benefit the taxpayers who own them, or GM itself.
I wouldn’t expect -any- company to promote a negative view of itself. I don’t know why so many posters here think this is some new outlandish tactic by a car company. Toyota has been doing it ever since the recalls, apologizing in their ads, while recalling hundreds of thousands of vehicles. Will apologizing fix their vehicles? No. Will it sell more vehicles than -not- apologizing? Probably.
Wait...
RedBeard Saturday, May 1st at 8:42PM EDT (link)You said, “I don’t see how GM making commercial about how much money they owe, or how poorly designed their cars have been would benefit the taxpayers who own them, or GM itself.”
Where on earth do you get the idea that such a commercial is the only alternative to one that deliberately misrepresents GM’s financial dealings?
Any GM spokesman would be expected to tout the cars they make, features, warranty, style, price, anything positive. This is how to interest a consumer. Lying by misdirection and omission, particularly in a way that is so easily seen through, is not.
Standard-bearer for grouchy curmudgeonry since, oh, 1975 or so.
Looking closer
leftybehind Sunday, May 2nd at 8:28PM EDT (link)I just don’t see it as misdirection, just the usual tactics by marketing departments. Nor do I see it as easily seen through.
Even a tactically sound commercial such as this one can fail, regardless of what failings you find with it, those will not necessarily be GM’s (continued) downfall nor without some unnatural interest in GM’s finances will it be the commercials failings.
Most Americans really are not paying enough attention to know what GM was talking about nor will they try to figure it out. You and I will know, but we probably are not buying GM vehicles already because of our curious nature and our ability to investigate things further.
The average consumer won’t look closer and will most likely be heartened somewhat by the commercial. It is not for you or I to vouch for it, but for the next year and their resulting sales numbers.
I don’t expect some amazing recovery, but I do expect as the economy bounces back, even small improvements at GM will be exagerated enough for most people to see the results as a success.