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US Treasury Completes Bailout of General Motors
Hugh Pickens DOT Com writes "Jim Puzzanghera writes in the LA Times that the federal government has sold its remaining shares of General Motors stock, ending the controversial $49.5-billion bailout of the automaker begun in late 2008 under former President George W. Bush. Although the GM bailout ended with a $10.5-billion loss for taxpayers, Treasury officials say the goal never was to turn a profit. The rescue prevented further damage to the economy and the potential loss of 1 million jobs says Treasury Secretary Jacob J. Lew. 'This marks one of the final chapters in the administration's efforts to protect the broader economy by providing support to the automobile industry.' At its height, taxpayers had a 60.8% ownership stake in GM. The auto bailout will rank as 'one of the most important interventions, maybe the most important, in U.S. economic history,' says Sean McAlinden, chief economist for the Center for Automotive Research. Without it, 'the upper Midwest would still be a gaping, double-digit unemployment hole in the economy, 600,000 retirees would've lost their pensions.' ... The Cadillac CTS was picked as Motor Trend's car of the year and the Chevrolet Impala was the first U.S. car chosen as the best sedan on the market by Consumer Reports in 20 years. 'We will always be grateful for the second chance extended to us and we are doing our best to make the most of it,' says GM CEO Dan Akerson. 'Today is not dramatically different from the hundreds of preceding days during which we have worked to make GM a company our country can be proud of again.'"
The government previously forgave $15.4 billion in loans to GM: http://www.reuters.com/article/2009/05/19/gm-bankruptcyplan-idUSN1943363120090519
In addition, the government would extend a credit line to the new company and forgive the bulk of the $15.4 billion in emergency loans that the U.S. has already provided to GM, the source said.
The government also made a "special ruling" for companies receiving bailout money... http://online.wsj.com/news/articles/SB10001424052748704462704575590642149103202
It [GM] won't have to pay $45.4 billion in taxes on future profits.
Not only is the taxpayer out over $70 billion to bail out GM, but the original bond holders who were illegally robbed are still waiting for their money too.
You think so? You don't think the smoking carcass would own all of the patents and make it impossible for a bunch of new startups to get into the industry?
Because in pretty much every other industry patents essentially prevents that from happening.
I'm of the opinion that in many cases, you'd just end up with a huge patent troll which prevents newcomers from entering the market.
There can be no innovation without really deep pockets to cover all of the rent seeking which happens. Because the game has been stacked that way.
Lost at C:>. Found at C.
You don't think the smoking carcass would own all of the patents and make it impossible for a bunch of new startups to get into the industry?
Patents are assets. Assets are auctioned off in bankruptcy. The owner of a patent benefits from licensing the patent for fees, not from sitting on a patent and preventing anyone from using it.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
The Evil Corporations[TM] aren't the problem — GM was bailed out against the wish, desires, and the better judgement of executives and bankers nation- (and world-wide). No, the bailing out of the auto-industry profited unions — not corporations.
Freshly elected Bush, enjoying the support of the his party's majority in Congress, did not bail-out Enron in 2001. Likewise MCI got liquidated in 2006. What made GM and Chrysler different? Unionized work-force — that's what. But blaming "unionocracy" just does not have the same ring to it, does it?
In Soviet Washington the swamp drains you.
Even Lehman Brothers was allowed to go under as late as September 2008 — under Bush.
Interesting example - because that's exactly what caused Bush and Paulson to panic and start handing out goodies to the rest of the finance industry.
The subsequent TARP was a bow to Congress
Really? The same TARP that was the brainchild of Bush's SecTreas Paulson? The one that congress initially rejected because it was a few pages that basically said give the SecTreas $700B and he pink swears to do the Right Thing with it (the same SecTreas who'd was chairman and CEO of Goldman-Sachs).
the taxpayers recovered 97% of the monies given to the evil "banksters" under the program. Compare to the figures of the auto-bailout
Ok. Auto-bailout: $10.5B. TARP: $24B (read the 2nd paragraph of your own link - that 97% number is very deceptive). For bonus points, discuss how much of the TARP money was paid back because the Fed loaned the banks money at an even lower rate. It doesn't take a financial genius to realize that it makes sense to payoff loan A using the loan B money, if loan B is at a lower rate.
Go back to the auto-bailout (and the subsequent cash-for-clankers fraud). Nothing represented as blatant a wealth-transfer from taxpayers to "workers" (or, indeed, to anyone else) in recent history.
Nice of you to limit transfer of taxpayer's money to only that received by "workers". You conveniently left out bank executives, bank shareholders, highly speculative "investors", etc.
The bottom line is that you are obsessed with how much money "workers" get from taxpayers, regardless of the fact that much more was transferred to people who aren't "workers". Your ideology blinds you to any real concern for the taxpayer's money. You may call yourself a Libertarian, and you may even vote that way, but considering your agenda and your defense of Bush, it's obvious that you're a Republican in libertarian's clothing. A corporatist (not excusing Democrats here) is as far as you can get from a genuine libertarian.