Despite TTAC’s GM Death Watch and Chrysler Suicide Watch, the MSM was asleep at the wheel during the domestics’ dissolution. Now that New Chrysler and New GM have appeared, like sin from Satan’s head, the MSM is . . . asleep at the wheel (obscure reference of the day: “miles and miles of taxes”). That said, U.S. News and World Report has this Troubled Asset Relief Program (TARP) thing wired. The magazine commissioned the Ethisphere Institute to consult its weekly TARP index to calculate the odds that We The People will see our $700 billion (that’s billion folks) “investment” again. The bottom line: the Institute says anyone who thinks we’ll get out bailout bucks back from Chrysler, GM and GMAC should be committed. Make the jump for the run down on the troika of former auto industry stars disappearing your tax money down a TARP-shaped black hole.
Chrysler — $14.9 billion: “The return to the government will probably be well below face value, since the government holds a relatively small stake in a company that’s still endangered. ‘The government will get back materially less than its $8 billion principal,’ says analyst Stefan Linssen of Ethisphere.”
GM — $50.7 billion: “Ethisphere estimates that taxpayers will be lucky if they get back $20 billion, a mere 40 percent of their investment in GM.”
GMAC — $12.5 billion: “Ethisphere believes that with GMAC’s vast exposure to two depressed industries—cars and homes—at least $5 billion of GMAC’s TARP funds are a complete write-off.
Preventing Total Economic Collapse… Priceless.
So, the government will get back less than 45% of what it loaned to the auto companies. We would have been far better off if they had pumped the money into the slots at Vegas (and hey, Nevada would be feeling much better about it too).
Sadly, some of the other TARP recipients (such as AIG) aren’t doing any better, or are actually even less likely to repay the “loans.” While I can begrudgingly acknowledge that an AIG bankruptcy may have totally destroyed our economy, I find that a tough argument to swallow with GM and Chrysler (especially the latter).
I’m glad USNWR is at least making a token effort to track this stuff in light of the near-total lack of transparency from the feds. But it still makes me grumpy and depressed.
Look at all the votes they bought nationwide with our money. Now that’s priceless.
GS650G-Considering the length of the average voters attention span it is still a dumb investment. ;^D
Hey, since Prez Goodwrench believes we will get the dough back does that mean he should be committed?
Bunter
GM – $50.7 billion – “Ethisphere estimates that taxpayers will be lucky if they get back $20 billion, a mere 40 percent of their investment in GM.”
How much would we get back if they’re liquidated and some of the assets are purchased by someone else? Is that where the $20B is coming from?
RF–
Just a comment about the Athena metaphor: Athena did spring fully formed from Zeus’ head, but she is the personification of wisdom and thought, sort of the opposite of the point of this article. I’d have gone with Milton’s writing about sin springing from Satan’s head as a more apt image.
On another point that is very much off target, just down the highway from me this week is the Experimental Aircraft Association air show, the largest air show in the world. My friends, let me suggest that at some point in your lives you try to make it to Wisconsin for this event, for if you love the sound of engines, there is no better sound than a huge WWII era radial engine at takeoff. And this year, a P38 flew in, which sounds like the gods’ own fury, twin Allison V12s producing over 1000 hp per engine. Like is good.
I promise to be on topic from here on.
Look at all the votes they bought nationwide with our money. Now that’s priceless.
How many of those purchased votes will be lost when the taxes to pay for this crap start coming? It’ll be a cold day in hell before I vote for anyone on the list of people that okayed this bullshit.
The government will get back every penny and then some. How? Taxes of course. Auto workers and management are well paid and in high tax brackets. And then there is the multiplier effect as the money is passed around after it is paid out.
And since when does is the government a profit making enterprise? How much of the interest on the national debt will the government get back? How much of the hundreds of billions spent on defense, the Iraq war and the Afganistan war will the government get back? How much of the the money wasted on NASA will the government get back?
I can name just about any government expenditure and few will show any monetary return, let alone gain.
Government is about politics and getting by until the current powers that be are either out of office or re-elected. Nothing more.
The bailouts are no worse than anything else the government does.
The government will get back every penny and then some. How? Taxes of course. Auto workers and management are well paid and in high tax brackets. And then there is the multiplier effect as the money is passed around after it is paid out.
How long does it take to get $50 billion in taxes from GM employees? And exactly how many jobs will be saved over the long run; exactly how many would never find jobs elsewhere if GM went out of business earlier rather than sooner?
I can agree with large parts of the rest of your comment, but this paragraph is just fantasy.
How much of the interest on the national debt will the government get back?
Yes, but by giving the TARP money, the government increases the national debt and the interest. It’s not like the government has a choice of either spend the money on GM and Chrysler, or increase the debt. By necessity when it does the first, the second happens.
@97escort:
“The bailouts are no worse than anything else the government does.”
The government has essentially delayed the eventual Ch. 7 filing of GM. That’s it. Oh, and they gave a huge chunk of Chrysler to Fiat, who have proven extremely adept at making a quality product.
The bailouts epitomize what government does poorly… interfere with the ecosystem of business that naturally kills some while making the strong thrive.
Imagine the government funding VHS makers to stave off the threat of DVD’s or better yet, subsidizing abacus makers because of the looming threat of, (cue Friday the 13th music), CALCULATORS!
97escort :
July 28th, 2009 at 1:05 pm
The government will get back every penny and then some. How? Taxes of course. Auto workers and management are well paid and in high tax brackets. And then there is the multiplier effect as the money is passed around after it is paid out.
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The taxes paid (or to be paid) by auto workers are for their protection (national defense), eduction (of their children) and social/physical infrastructure. It’s not a favor that they do to the rest of the nation. It’s an exchange of services.
Almost all working class people pay taxes.
The taxes that auto workers pay are not repayment of the debt GM owes us.
# jkross22 :
July 28th, 2009 at 4:29 pm
Imagine the government funding VHS makers to stave off the threat of DVD’s or better yet, subsidizing abacus makers because of the looming threat of, (cue Friday the 13th music), CALCULATORS!
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I totally agree.
The essence of a central planned economy is that the Chairman (or Fuhrer) knows better than the entire population about everything.
Thus, the Chairman will decide which auto maker is too big to fail, what EPA mileage needs to be achieved, what ratio of corn to be mixed into your gasoline …
No, you puny one, you are not smart enough to make your own decisions. Just know that your are in good hands.
No, you puny one, you are not smart enough to make your own decisions. Just know that your are in good hands.
This is absolutely true to a large extent. That’s why the most dominate features of successful capitalism are its authoritarian corporations.
The fact that so many of the puny people still can’t understand why some sort of bailout was necessary after all this time is a testament that they should leave decision making to those who know better.
while gm and chrysler were in bankruptcy they should have gotten rid of the uaw.it would have been legal and then they could compete.there are plenty of people who wuould take the jobs at ten dollars an hour.