Geithner’s Spin: Auto Bailout A Success

by Warner Todd Huston

At the Detroit Economic Club today, Treasury Secretary Timothy Geithner tried to claim the auto bailout is a success.

It certainly doesn’t seem like a success for the taxpayers. GM stock is about $30 today, and unless it gets up to $54, the taxpayers lose money on the deal. Why would it go up? You want to fight high gas prices by buying a Volt? How does $41 grand a pop sound? And still GM loses money on every one it sells even at that price. Not only that but we are seeing that government subsides for electric cars is good tax money wasted in any case.

It doesn’t get any better. Worldwide, U.S. cars aren’t selling worth beans and domestically, GM is lagging because people who hate the bailouts won’t support it with their car-buying dollars any more than they did with their votes last year when they kicked out every incumbent they could find who’d been for it. And GM still has all its old problems, too, like those big fat union pension obligations. Sadly, nothing that caused GM’s financial trouble has been fixed.

But the spin continues.

Last December, Geithner said the auto bailouts were “investments,” which “will show a positive return, not a negative return.”

As the 2010 midterms proved, the people know better. They know government can’t run an automobile company and they know the deal was mostly political payback to the UAW, the biggest culprit in why GM and Chrysler were in trouble in the first place — not that company execs did themselves proud, either.

People didn’t believe Geithner when he said we’d make money on the deal, and they were right. Today’s speech was more of the same, and it still won’t fly.

Geithner, Obama and the rest of the gang that brought us this monstrosity may or may not actually still think they kept the economy from chaos by the bailout, but they’re just believing their own scare tactics if they do.

As George Mason University Professor Todd Zywicki pointed out in depth, a normal bankruptcy would have worked just as well. Sorry, Timmy. Your spinning wheel is getting us nowhere.

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Tags: auto bailout, auto workers, bailout, Chevy Volt, detroit economic club, electric cars, Federal Spending, gas prices, GM, GM stock, subsidy, taxpayers, Tim Geithner, UAW, union pension
Posted Apr 30th 2011 at 10:19 am in Big Labor, Economics, Federal Spending, News, Obama, taxes | 26255276 Comments2011-04-30+18%3A19%3A33Warner+Todd+Huston

26255276 Comments2011-04-30+18%3A19%3A33Warner+Todd+Huston

Whats_Up - April 30th, 2011 at 10:33 am

WHO, in their right minds, BELIEVE this $hit. Geithner – you're one BIG joke !!! Geez.

knuckles - April 30th, 2011 at 10:42 am

Meanwhile, refugees are still trickling out of the village of Detroit…

Exspook1 - April 30th, 2011 at 10:42 am

Hmmmm….it looks like Mr. Geithner is relying once again on his allies in the MSN to spin the truth and convince the useful idiots that the sun rises in the west. Hmmm….who else used the press as an ally and a tool…..Gobbels…..who else…..oh yeah…..a comrade thug from Moscow:

The press is our chief ideological weapon. – Nikita Khrushchev

Yep….comrade dear leader and his cabinet have learned from history.

Whats_Up - April 30th, 2011 at 10:52 am

"Ring around the Rosie, Pocket full of" …uh oh, Lint ??? "Ashes, ashes. We all fall down." Soros & O happy.

Dirtt - April 30th, 2011 at 10:55 am

$41 grand? LMAO. I'd rather have 10 trucks at $4100. You can wrap 9 around random telephone poles and still have wheels.

$41 geebers on a Leaf? LMAO. If the Leaf were the only vehicle sold in the USA I would take that $41K, buy a sailboat and follow Superman to wherever he announces his new citizenship.

Memo to the UAW Volt and UAW "Leadership"… that giant sucking sound is the drain just below the wheels of GM. Good riddance!

Mikeyh0 - April 30th, 2011 at 11:02 am

Now we have absolute surety of what this group of "f" ing geniuses think success is. Loss on every item sold, stocks that are in the toilet, unions pensions and wages being supplemented by every taxpayer, products no one wants and empty rhetoric declaring victory over evil capitalism. THAT is Obama's idea of complete success. No one in their right mind could possibly support this nonsense – it runs counter to reality so strongly that only an idiot – and maybe not even all of them – could accept this definition of what success is.

MarkG - April 30th, 2011 at 11:10 am

Such a success that if the Government doesn't unload it's share we, the taxpayors will be in the hole for another 11BILLION dollars.

adastra2005 - April 30th, 2011 at 11:11 am

He and Obama do think it was a success. They successfully (and illegally) stole billions from bond holders and gave it to the unions. I no longer fear Biden and hope Obama chokes on Michelle's di*k some night.

EOD - April 30th, 2011 at 11:18 am

Democrats (all) are incapable of telling the truth.

destroys_idiots - April 30th, 2011 at 11:18 am

I'm going to go out on a limb here and say that Geithner does not come from planet Earth, and therefore does not get the meaning of the word "success."

InfidelCzar - April 30th, 2011 at 11:36 am

Of course, he didn't have anything invested in the issues, just as all welfare and affirmative action leeches never have anything invested in the largesse they suckle and defecate on.

Stan522 - April 30th, 2011 at 11:38 am

To a communist like geithner, of course it's a success. He was able to spend more money on a company than it was worth and he took it from Capitalist investors and gave it to his union goons. Brilliant!

MystWlker - April 30th, 2011 at 11:38 am

The new GM sales slogan:

"Volts for Dolts!"

xmattingly - April 30th, 2011 at 11:39 am

Nothing more than politi-spin and smoke and mirrors. Declaring the bailout on one hand a success and at the same time not mentioning the more than $2 billion in stock the government still owns (which is most likely doomed to go down in value) is nothing more than sleazy sleight of hand.

In my opinion, the auto bailout was entirely a failure, and politics as usual at major taxpayer expense. GM is (was) a private company, being eaten from the inside-out by unions and from the outside-in by the world market. Their problems have been spiraling out of control for at least the past two decades, and they should have been left to their own devices, period.

"Too big to fail" is only double talk for "free back scratches for my political supporters".

Cowboy Logic - April 30th, 2011 at 11:41 am

Here is an interesting twist.
Someone smart out there could research it.

Find out exactly how many Union employees GM currently employs, and divide that number into the total amount of bailout dollars that the Government gave GM.

The answer you come up with, will be the total cost per Union vote, that Obama paid, in advance for the 2012 election.

Rokoll - April 30th, 2011 at 11:45 am

the bailout "success" is the massive increased cost of used cars because they artificially gamed the market by crushing thousands and thousands of perfectly good used cars. Again, another burden on a vast majority of Americans who rely on a used vehicle.

McDoobAU93 - April 30th, 2011 at 11:50 am

$49.5B bailout / 209,000 total employees (per Wikipedia article on General Motors; the number itself comes from GM's company profile) = $234,449.76 per employee, CL.

Taxpayer1234 - April 30th, 2011 at 12:03 pm

"Geithner said the auto bailouts were 'investments,' which 'will show a positive return, not a negative return.'”

Since when is paying for gigantic mistakes an "investment"?

So, by his stooopid logic, the Pontiac Aztek, the Pontiac Fiero, and Cadillac Cimarron were also "investments." EPIC DUH.

knuckles - April 30th, 2011 at 12:29 pm

This is the same White House that "invested" stimulus funds in zip codes that didn't exist.

Highland444 - April 30th, 2011 at 12:39 pm

I will never even consider buying a Chrysler or General Motors car for the rest of my life because of this idiotic "bailout" with my tax dollars. How's that going to work for you, Obama?

Dukehoopsfan - April 30th, 2011 at 12:46 pm

I was a chevy truck guy once … driving second Ford currently, thinking about another. No gub'mint motors or geithner bravo sierra for me. I am really hoping to see in early 2013 lots of pictures of little timmy, holder, big sis, and the rest of obie's posse being frog marched into prison in chains.

dest4mex - April 30th, 2011 at 1:04 pm

But is was and is good for Obama's cronies that took all the money and stiffed the owners…. it was good for the Auto Workers Unions…. it was good for Ford….

Buy a Ford just to say F off to Obama!

Washington76 - April 30th, 2011 at 1:12 pm

Very clever, Nice!

Washington76 - April 30th, 2011 at 1:13 pm

Bailing Out the Big Three. Why reward Detroit (and punish taxpayers) for making unprofitable cars? February 17, 2009
http://new.reason.tv/videos/2009/02/17/bailing-ou...

"The administration of justice is the firmest pillar of government."George Washington

Djmcs11 - April 30th, 2011 at 1:29 pm

It worked. Chrysler to pay back its loan 3 years ahead of schedule
http://blogs.forbes.com/joannmuller/2011/04/28/ch...

TeaPartyNation - April 30th, 2011 at 1:34 pm

Just as "systemic failure" napolitano symbolizes the gross incompetence of the hussein-pelosi regime, TAX CHEAT tiny tim geithner symbolizes its complete absence of integrity, ethics and good judgment.

MuckedOver - April 30th, 2011 at 1:47 pm

Oh a side note…I'd love to own that car.

CPeony - April 30th, 2011 at 1:55 pm

To add insult to injury, Washington State is now going to tax everyone $100 who owns an electric car. I don't know if any other State will follow suit. What a farce this whole scheme was.

Stevie_R - April 30th, 2011 at 1:56 pm

There are many in the media that need to join them.

peteee363 - April 30th, 2011 at 2:00 pm

i do not think you think it means what you think it does, a better quote i can't think of.

doawkins - April 30th, 2011 at 2:13 pm

GM stock is dirty. The audits are not clean and the assets and laibilites are mistated.

Bad stock.

renoman - April 30th, 2011 at 2:30 pm

So if we go electric…..how tahel we gonna pay for road n bridge upkeep with less gasoline consumption which is what is supposed to pay for road improvements??? That $100 tax sure ain't gonna do it….the greenie's are just shootin themselves in the foot. How's that Hope n Change workin out for ya??? Nobama 2012!!!

ed357 - April 30th, 2011 at 3:58 pm

Cash-for-Clunkers was such a success………………..

that now a good used car has gone up by an average of 33%…………

THANKS………0BAMA.

father_moray - April 30th, 2011 at 4:01 pm

G-man is a Borg…unplug him and watch him deflate…

thale_taxurfeet - April 30th, 2011 at 4:08 pm

Relax Mikey, Geither and the fiscal gurus in the Administration are sure that what they lose on each individual unit, they can make up for with volume sales of those units.

thale_taxurfeet - April 30th, 2011 at 4:22 pm

You know that additional taxes, substantial additional taxes, will need to be levied on electron flow generated by something or another like ~~coal~~ ~~nuclear fission~~ ~~natural gas~~ Unicorns on a treadmill power plants which will be needed to recharge all those batteries in the millions of little green, economical –once you pay them off (do not factor in the cost of the electrical charging infrastructure… oh yeah and the taxes…)– $40k+ soap box derby cars with chrome.

Mikeyh0 - April 30th, 2011 at 4:29 pm

I've heard that before – never really knew what it meant. I see now: that bright light just before everything goes completely black. Atlas Shrugged should shake up a few brain cells if enough folks see it. Absolutely loved it!! Read the book when I was 19 – saved me a whole lot of missteps.

SJBill - April 30th, 2011 at 4:40 pm

Any knowledge as to where that Chevy Nomad hulk is located? That is a worthy fixer-upper.
Give it lots of TLC, a small block V-8, and a four speed.

Chipsbee - April 30th, 2011 at 4:41 pm

That ain' t lint. Smells too bad.

Chipsbee - April 30th, 2011 at 4:53 pm

I also understand they are now using leprachauns on treadmills with pots of gold hanging from a stick in front of them. Greedy little buggers.

Cowboy Logic - April 30th, 2011 at 5:41 pm

WOW.
Unbelievable.

Here is another thought.
Everyone remembers the brouhaha when the auto executives traveled to Washington, to testify, and to seek a bailout. The furor that erupted because they flew their corporate jets, with all the perks. Obama had the Chairman of GM fired, because to Obama's way of thinking, it was insulting for them to flaunt the trappings of power, while they were bankrupt.

Compare that to now.
Now WE (the USA) is bankrupt, yet Obama still continues to enjoy the trappings of power, and his perks. Why just last week he flew to Chicago, to sit with Oprah. Isn't that a bit hypocritical?

Obama broke US.
He needs to give up Air Force One, and fly coach.
Better yet, we just need to fire his sorry azz.

wldbil - April 30th, 2011 at 5:47 pm

"It worked."

LOL!

What an idiot!

onecornpone - April 30th, 2011 at 6:02 pm

Heh, heh . . . jes' what I was thinking when I saw that veh, mm mm mm!!! That one looks like one of
those deals where ya need about three of em to make one.

Happy Motoring!
.

Hobbes - April 30th, 2011 at 7:34 pm

Of course Geithner thinks it's a success … he's looking to the future when gas will be $10.00 or more a gallon. He's looking forward to people flocking to buy those crappy little cars they are making. And, they've got a "National Icon" making the sleazy pitch for them … Obama!

KLOPP_HAS_FLOPPED - April 30th, 2011 at 8:35 pm

I think today I would buy an AMC Pacer over any GM product. I would really like an AMX though.

Motleycroo - April 30th, 2011 at 8:49 pm

I though so too. Wouldn't wrenching on that thing be a great way to spend a couple of summers?

AlSando - April 30th, 2011 at 9:57 pm

Saw one of those Cadillac supercars today. I thought "Wow!". Then I remembered that It is Owe Motors. Obama owns it, we owe to pay for it. I will never ever buy a GM or Chrysler product again.

cb750 - April 30th, 2011 at 11:02 pm

You mean with the money it got in a escrow fund from the government?

And NO it did not work. If these companies need bail outs, they are failures. We would have been better off to let Chrysler declare bankruptcy so it could sell off assets and renegotiate its union contracts.

Oh and read the article real careful. That's IF they can secure bank loans AND they wish to pay off this $6 bil so they can secure more money from the fed. Chrysler wants to pull the same lame trick GE did and relabel everything they do so they can get subsidies and get tax breaks so they DON'T PAY TAXES.

So why do you endorse subsidizing big, evil corporations so they can avoid paying taxes? Its fine if you hate corporations but why then do you want to hand these people billions? Just to keep union people employed?

This was always about keep unions alive.

joqiii - May 1st, 2011 at 12:42 am

Volts for Dolts: Timmy "tax cheat" Geithner is a waterboy.

kcsfarm - May 1st, 2011 at 3:10 am

Common sense. Accountability. What happened. The States ratified the Constitution and allowed limited power to the feds. Time for the States to hold the feds to accountability and quit making excuses. Voters need to rise up and make a difference. Quit bitching. Resort to common sense.

TPP

Rokoll - May 1st, 2011 at 3:10 am

yea, Chrysler is playing a shell game with the loans so Fiat can buy them out.
winning. The libs cant figure it out.

Gregory8 - May 1st, 2011 at 4:03 am

Govt is not susposed to Partner Up with business.

G.M. I think would have been better off with a Bankruptcy situation. Undo the Union contracts, and other things to reduce expenses and increase sales and incomes.

acaiguana - May 1st, 2011 at 4:50 am

Your idea of 'working' is making all of us a small fortune.

Here's how that 'works'.

First start with a large fortune.

acaiguana - May 1st, 2011 at 4:52 am

The whole scheme isn't even started. They plan to close down coal, have closed down nuclear, and will close down oil.

Then when the electric bills are $1200 a month for a family of 1; well we'll just have to get used to it.

Buy a more expensive car. That'll fix it. Oh, and make sure your tires are at pressure and you have a recent 'tune-up'.

PhilaMike - May 1st, 2011 at 5:09 am

Das Auto, der Voltswagen………..

PhilaMike - May 1st, 2011 at 5:14 am

Don't forget how obama blasted the GM Bondholders for wanting thier money back but obama gave it to the Unions…

PhilaMike - May 1st, 2011 at 5:16 am

It was the UNIONS that gave us obama……remember that ….

PhilaMike - May 1st, 2011 at 5:20 am

What my Dog forgot is More than obama and his Administration know…………

PhilaMike - May 1st, 2011 at 5:22 am

80% of all revenues from gas and road taxes goes to pay for unionized Government workers Pensions and Benefits….

father_moray - May 1st, 2011 at 6:27 am

Michelle just called it a Thug Government…she's right.

Cowboy Logic - May 1st, 2011 at 6:43 am

He's dumber than owl shlt.

wldbil - May 1st, 2011 at 8:44 am

Morning CL…..
He is a moron, a product of the union run state funded madrassas the now pass for public eduation these days….

Cowboy Logic - May 1st, 2011 at 8:56 am

He has a particular hard on for Breitbart.

He is an idiot.

MikeinIdaho - May 1st, 2011 at 9:37 am

The ultimate answer is to vote with your wallet. NEVER buy a new GM vehicle and let little taxcheat Timmy eat his idiotic words. RESIST!

renoman - May 1st, 2011 at 11:47 am

If true Mikey that is the most ridiculous thing I've ever heard of……I'd like to see your source for such nonsense!!!??? That was 'sarc' right?

Eileen for Freedom - May 1st, 2011 at 2:00 pm

THE OBAMA DECEPTION…VIEW IT AND GET THE TRUTH OF WHAT REALLY ‘IS…IS’…

http://www.youtube.com/watch?v=eAaQNACwaLw
~~~
PART I –

America…first I challenge you to view the above video to see about the secret Bilderberg meeting of 2008 in Maryland…the one where Bilderberg "stand by her man" Clinton…and their new puppet…Obama the Bush attended. When they disappeared for two days off the campaign trail and no one knew where they were!

Then I want you to go through this list of USA attendees at that same secret meeting to ask yourself the question…why were these leaders of top USA corporations and leaders of our government attending a private meeting of international bankers, financiers and world leaders?