As taxpayers are beginning to feel the effects of big government with the introduction of ObamaCare and its high premiums, inconceivable deductibles and the accompanying taxes, the consequences of another government intervention in our lives has slipped under the radar. It’s the result of our government’s ill-advised auto bailout, investments and standards.
On the surface, recent news of the government’s sale of its remaining stock in General Motors for $39 billion sounds positive, until you learn that we taxpayers are out $10.5 billion. As we might expect from a liberal and someone with no business experience, the president’s rationalization for the $10.5 billion loss was that it was well worth the investment.
Five years ago in an unprecedented bailout deal, the government received some 900 million shares of GM, a 60.8 per cent stake in exchange, leaving senior bondholders hanging high and dry while the government made the United Auto Workers union a major partner.
Phony “paid in full” stories began circulating in 2010, including a TV commercial featuring former CEO Ed Whitacre. Democrats spoke of the payback and predicted taxpayers would get their money back. Except it didn’t happen. They ridiculed Mitt Romney’s suggestion that the automakers should go through a proper, legal bankruptcy, and erroneously claimed the bailout had been repaid in full.
They believed the auto bailout would save Detroit, preventing shuttered plants, layoffs and the domino effect on supply companies and community businesses. Today, Detroit is officially bankrupt and footage of shuttered businesses and homes there are now common place. After 50 years of Democrat control, Detroit’s population has dropped from nearly two million to 700,000.
Last month we learned the president can no longer claim he saved America’s auto industry as the Italian automaker Fiat will gain full control of Chrysler with the acquisition of a 58.5 per cent share of the company. While Fiat was only able to acquire the stock after repaying the U.S. Treasury $3.5 billion of the $7.6 loan it made to Chrysler, the $3.5 billion came from a fuel-efficient vehicle loan administered by the Energy Department, according to Conn Carroll of the Washington Examiner. Therefore, U.S. taxpayers funded the sale resulting in the loss of a Big Three automaker.
As recent news reports from the auto industry revealed the average new car transaction price was $32,890, we see another result of big government’s role in auto manufacturing. Several administrations have contributed to the increase in auto prices through misguided café standards designed to improve fuel efficiency. While a few models have impressive MPG ratings, the average improvement over the past 10 years has been minimal.
Rather than let the market decide the public’s desire for electric automobiles, the Obama administration has taken another step with his impractical goal of one million electric cars on the road by next year. Energy loans to battery and auto manufacturers have led to bankruptcies, and $7,500 rebates to those who purchase an electric car have not spurred sales sufficient to reach that goal.
I’m reminded of a television interview in which former British Prime Minister Margaret Thatcher reflected on governments that try to control everything, saying they make a mess out of everything and “eventually run out of other people’s money.” And with our debt now at $17 trillion, President Obama and his Democrat-controlled Senate continue to “invest” our money in support of their big government agenda.
