Obama Pushes False GM Success Story

[Dave]

Definitely getting to be that time in the 'election' season where you have to research what's the truth and whats a fallacy.... seems most of the stuff coming from pretty much any candidate is a lie. Obama has proven himself to be a typical politician, able to lie with the best of them. Some day there will be an honest politician, just don't know if I'll see that in my lifetime.

Politics: The Obama camp can't stop clucking about how he saved GM and the car industry. But if the GM bailout is such a success story, why can't it pay back its debt to taxpayers?

The president's new campaign video narrated by actor Tom Hanks claims GM has "repaid" its loans. But in a revelation by the special inspector general monitoring the TARP bailout program, GM and GMAC together still owe the biggest share of the remaining $119 billion TARP debt.

Of the top bailout recipients, GM is the biggest laggard, the TARP watchdog says in his latest quarterly report to Congress. Bank of America, Citigroup, Chrysler and Chrysler Financial all have paid off their debt and left the TARP program. Even AIG has paid back more than 75% of what it owes taxpayers.

GM, on the other hand, still owes more than half the $50 billion in federal funds it received when the combination of the recession and its costly union contracts drove it into bankruptcy. And its lending arm, GMAC (now Ally Financial), still owes $14.5 billion.

What's worse, it's not clear that GM actually repaid what it's gotten credit for repaying. Check out this note buried in the inspector's report: "As part of a credit agreement with Treasury, $16.4 billion in TARP funds were placed in an escrow account that GM could access only with Treasury's permission."

As it turns out, GM got Treasury's OK to "repay" more than $6.7 billion "using a portion of the escrow account that had been funded with TARP funds." So GM is merely paying the government back with government money, not money GM is earning selling cars, as the administration has claimed.

Worse, GM in effect is still borrowing money. Consider this item from the report: "What remained in escrow was released to GM." Bottom line: Taxpayers have not been paid back and are still on the hook as GM continues to require government help. Yet Obama has hailed the GM bailout as the signature achievement of his big government programs.

"On the day I took office, our auto industry was on the verge of collapse. Some even said we should let it die. With a million jobs at stake, I refused to let that happen," the president said. "Today, General Motors is back on top as the world's No. 1 automaker."
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Even that's a stretch. GM edged tsunami-crippled Toyota by counting sales at its joint ventures in China, which aren't wholly owned subsidiaries. And the government is directly subsidizing new GM auto lines like the star-crossed Chevy Volt.

Ford, which didn't take TARP funds, grabbed market share from GM and is now more profitable. Ironically, Ford for the first time in years has outsold GM in the number of cars bought by the federal government - although Washington still owns a huge stake in GM. Not exactly a vote of confidence.

In North America, Ford just recorded its highest quarterly profit since 2000. GM missed profit estimates in the fourth quarter. And analysts are not sanguine about its first-quarter results due Thursday.

The GM story is hardly what we're looking for in terms of a recovery. That Obama is touting it as a top economic achievement speaks volumes about his policies.

http://www.realclearmarkets.com/articles/2012/05/01/obama_pushes_fa...

[XLFD]

So GM and GMAC still owe around $40 billion in their federal bailout and continue to lose market share?  Ford is getting near record profits?  No big surprise there.

Ford is the best counterexample to refute why the auto bailouts were needed.  In every free market system, those companies that don't adapt to legitimate market forces, should fail if they refuse to do so.  No matter how big they are or how many workers are temporarily displaced, the tree must be allowed to fall.  Others will start to grow to take its place in the next cycle.  Natural market forces, like there used to be in this country.

[AQUAMAN]

Mr. Obama is desperate now imho. He has no record of positive accomplishments for almost 4 years, and seeks to "spike the ball" in any fashion or subject he can grasp to. GM, Bin Laden, Afghanistan are just a scant few he claims he's fixed. Speaking of Afghanistan, his last press conference a few nights ago simply illustrated he is NOT done there yet, and won't be until the end of 2014, that's some 2-2/3 years yet, taking us into a 13-14 year old war, the longest in American history to date, and still without a firm mandate of success, pitiful at best. Meanwhile, another 33+ soldier casualties were lost last month, with no end in sight for total withdrawal. I just don't see how we can continue to waste more time and lives in this 3rd world fiasco, it's time to get out, and stay out, imo. Nothing we do now, or into the future, can change what has been going on there for thousands of years prior. Some country's and people will Never change.