By David Freddoso
President Obama and his union allies have decided that the 2012 reelection will prominently feature a defense/justification of the General Motors and Chrysler bailouts. This nascent effort included Treasury Secretary Tim Geithners op ed in the
Washington Post this week which was both inaccurate and ill-timed.
Geithners op-ed included this amusing whopper about Chrysler:
Nothing about the presidents call was popular. It may have been more politically expedient to let Chrysler fail. But the president knew that if Chrysler collapsed tens of thousands of jobs would have been shed in the near term a body blow to an economy already on the ropes.
Obamas top economic advisor Austan Goolsbee disagreed strongly with this assessment at the time the decision was made as Obamas auto czar Steve Rattner recorded in his book Overhaul. Rattner disagreed with it as well although he went along without raising as much noise as Goolsbee. Rattner states in his book that political and social considerations were the only reasons for the Chrysler bailout -- there was practically no economic case for it at all.
Geithners op-ed was also noteworthy because it came the day before GMs stock price plummeted on disappointing May sales numbers. Year-to-date GM is selling more cars than last year but its sales were down year-over-year for May. And it is selling all those cars only by offering incentives more than 50 percent more generous than the industry average. The company has now lost more than 10 percent of its value since its IPO just seven months ago and its stock is off about 25 percent from its peak in February.
So way to go taxpayer. And keep your wallet handy because youre probably going to have to bail them out again eventually.
