From National Review Online: The Democrats have decided to run in 2012 as
the bailout party. It is an odd choice — the 2008–09 bailouts were
deeply unpopular among the general public, and even their backers were
notably conflicted about the precedent being set and the ensuing moral
hazard. But Democrats have nonetheless made one of the most abusive
episodes in the entire bailout era their economic cornerstone: the
government takeover of General Motors.....
The Democrats
cling to the ridiculous claim that the bailout of GM and its
now-Italian competitor, Chrysler, saved 1.5 million U.S. jobs. This
preposterous figure is based on the assumption that if GM and Chrysler
had gone into normal bankruptcy proceedings, the entire enterprise of
automobile manufacturing in the United States would have collapsed — not
only at GM and Chrysler but at Ford and foreign transplants such as
Toyota and Honda. Not only that, the Democrats’ argument goes, but
practically every parts maker, supplier, warehousing agency, and
services firm dedicated to the car industry would have collapsed, too.
In fact, it is unlikely that even GM or Chrysler would have stopped
production during bankruptcy: The assembly lines would have continued
rolling, interest and debt payments would have been cut, and — here’s
the problem — union contracts would have been renegotiated. Far from
having saved 1.5 million jobs, it is not clear that the GM bailout saved
any — only that it preserved the UAW’s unsustainable arrangement.
Bill Clinton bizarrely tried to claim that the bailout has been
responsible for the addition of 250,000 jobs to the automobile industry
since the nadir of the financial crisis. Auto manufacturers and
dealerships have indeed added about 236,000 jobs since then, but almost
none are at GM, which has added only about 4,500 workers, a number not
even close to offsetting the 63,000 workers that its dealerships had to
let go when the terms of the bailout unilaterally shut them down....
At their convention, Democrats swore that GM is “thriving,” but the
market doesn’t think so: GM shares have lost half their value since
January 2011. And while the passing of the Great Recession has meant
growing sales for all automakers, GM is seriously lagging behind its
competitors: Its sales are up 10 percent, a fraction of the increases at
Kia, Toyota, Volkswagen, and Porsche. With its sales weak, its share
price crashing, and its business model still a mess, some analysts
already are predicting that GM will return to bankruptcy — but not until
after the election. http://www.nationalreview.com/articles/316379/democrats-gm-fiction-editors#
Bring on the lies, Democrats, that the auto bailouts were such a great thing.
(and before anybody says anything, yes I know Paul Ryan voted for it, and he was wrong)
If this is the best the Democrats have, then bring it on.
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What evidence is there that GM and Chrysler would have survived bankruptcy without assistance? NOBODY was lending. It is more likely that parts of each would have been purchased (by others, maybe entirely foreign) to pay off debts (Jeep, Chevrolet, Cadillac), other parts liquidated (can you imagine them saving Buick, GMC, Dodge?). There may have been some semlance of what went before, but do you really think it would be the roaring success it is today? I think it would have been disaster, as do many economists. I don't think this issue is really right-left, it's fantasy-reality.
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