Success Criteria

President Obama is actually bragging about this.

President Barack Obama wears his decision to rescue General Motors and Chrysler three years ago as a badge of honor, a move to save jobs in an industry that helped create the backbone of the middle class more than a half-century ago.

…pointing to GM’s reemergence as the world’s largest automaker and job growth and profitability in the U.S. auto industry.

But Obama disingenuously argues from a false premise.  The American auto industry was—and is—in sound health.  Two auto companies, GM and Chrysler, were in trouble.  One of those, courtesy of the Obama “bailout,” now is no longer an American car company.  Chrysler is owned by the Italian company, Fiat.  And both companies still owe significant amounts of money to the government.

The American auto industry, though, consisted—and consists—of GM, Chrysler, Ford, Toyota, Honda, Kia, Nissan, and a number of other companies, all of whom assemble cars at plants in the US, and none of whom build cars from the ground up in the US.  All but two of these never were in serious trouble, and all but two are very sound companies today.  Without bailouts.

Furthermore, if GM is so profitable, why is this administration reluctant to sell the shares of government ownership—oh, wait, that would result in an enormous loss.  GM stock currently sells for $24; it needs to reach $53 to recoup the bailout money poured in.  This highly “profitable” company began 2011 selling at $36, and it’s been downhill all year.  We taxpayers have $23 billion in the wind as GM stock falls away from that break-even point.  On the other hand, why won’t Obama’s administration issue the government’s shares to its rightful owners—us, whose tax money funded the bailouts and paid for those shares—and let us retain or sell our shares according to our own decision criteria?

Chrysler is privately owned, so its valuation is harder to determine, but we Americans, through the Obama administration, own a significant fraction of this private company.  The same questions apply here.

Governor Mitt Romney pointed out at the time, and he repeats it today,

[C]apital markets and bankruptcy—it works in the U.S.  The idea of billions of dollars being wasted initially, then finally they adopted the managed bankruptcy.

Indeed, Obama’s “bailout” abused the bankruptcy system already in place, and it abused the companies’ creditors: GM’s senior creditors got a tiny fraction of what they were owed—and were denounced by Obama as “greedy speculators,” and threatened with getting nothing at all if they didn’t shut up—while the union was handed a 17.5% ownership.

Today, Obama, Vice President Joe Biden, et al., claim the decision saved an estimated 1 million jobs throughout the Midwest.  Former Governor Ted Strickland (D, OH) even says,

I don’t know how any reasonable person can fail to acknowledge that this rescue plan worked and the country has benefited.

However, they cynically refuse to offer any concrete, objective evidence to substantiate these claims.

They provide, instead, only anecdotes of union assertions and claims by those beholden to the Obama administration for having received government paymentshandouts from it.]

Notice that.  It doesn’t get any plainer.  This administration ignored bankruptcy law, ignored bankruptcy courts, pushed senior creditors to the back and gave the companies to the unions and to the government.  We’re still owed $30 billion on the “bailout” that we’ll never get back, and the fiasco resulted in two companies being owned by the US government, the Canadian government, the auto unions, and the foreign car company, Fiat.  The unions and Fiat remain the primary owners, the US government still owns significant portions.

Think about this administration’s definition of success and its view of the law as it implements its definition as you go to the polls this fall.

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