If the Auto Bailout Was a Success, I’d Hate to See What a Failure Looks Like

Sometimes it’s no fun to be an economist. Or, to be more specific, it’s rather frustrating to understand Bastiat’s insight about the “seen” and the “unseen” and to always be asking “at what cost?” and “to what effect?” when politicians make inane statements.

The GM bailout is a good example. Politicians want us to believe that it was a success because the company is still in business. Heck, the Vice President’s favorite campaign statement is that “Osama bin Laden is dead and General Motors is alive”

But if you’re the type of person who recognizes the importance of tradeoffs and incentives, then it’s easy to see how a political success can be an economic failure. Which is the message of this new video from the Center for Freedom and Prosperity Foundation.

This is music to my ears. I’ve been saying for years that any company can be kept afloat indefinitely with taxpayers subsidies. So if that’s the definition of success, we can party until we hit the fiscal brick wall. But that wall won’t feel good, as we can see from the fiscal chaos in Greece and other European welfare states.

But this issue involves more than just inefficient subsidies. I’m also concerned about the corruption that inevitably exists when cronyism replaces capitalism.

It’s quite likely, after all, that GM is spending lots of money on the Chevy Volt because of pressure from Washington rather than demand from consumers. And when you have a car company executive endorsing higher gas taxes, it’s reasonable to think that he’s currying favor with the political masters in DC rather than looking out for the best interests of drivers.

The GM bailout may be a win-win situation for politicians and lobbyists, but it’s a lose-lose proposition for taxpayers and the economy.

P.S. If you want some auto bailout humor, here’s a spoof on the Chevy Volt, an advertisement for the new GM Obummer, a couple of good political cartoons, and a very funny video on the Pelosi GTxi SS/RT.

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In the “Opposing View” Column, I Explain Why USA Today Is Wrong about Bailouts

I think it’s a mistake to bail out profligate governments, and I have the same skeptical attitude about bailouts for mismanaged banks and inefficient car companies.

Simply stated, bailouts reward past bad behavior and make future bad behavior more likely (what economists call moral hazard).

But some folks think government was right to put taxpayers on the hook for the sloppy decisions of private companies. Here’s the key passage in USA Today’s editorial on bailouts.

Put simply, the bailouts worked. True, in some cases the government did not do a very good job with the details, and taxpayers are out $142 billion in connection with the non-TARP takeovers of housing giants Fannie Mae and Freddie Mac. But it’s time for the economic purists and the Washington cynics to admit that government can occasionally do something positive, at least when faced with a terrifying crisis.

Well, I guess I’m one of those “economic purists” and “Washington cynics,” so I’m still holding firm to the position that the bailouts were a mistake. In my “opposing view” column, I argue that the auto bailout sets a very bad precedent.

Unfortunately, the bailout craze in the United States is a worrisome sign cronyism is taking root. In the GM/Chrysler bailout, Washington intervened in the bankruptcy process and arbitrarily tilted the playing field to help politically powerful creditors at the expense of others. …This precedent makes it more difficult to feel confident that the rule of law will be respected in the future when companies get in trouble. It also means investors will be less willing to put money into weak firms. That’s not good for workers, and not good for the economy.

If I had more space (the limit was about 350 words), I also would have dismissed the silly assertion that the auto bailout was a success. Yes, GM and Chrysler are still in business, but the worst business in the world can be kept alive with sufficiently large transfusions of taxpayer funds.

And we’re not talking small amounts. The direct cost to taxpayers presently is about $25 billion, though I noted as a postscript in this otherwise humorous post that experts like John Ransom have shown the total cost is far higher.

And here’s what I wrote about the financial sector bailouts.

The pro-bailout crowd argues that lawmakers had no choice. We had to recapitalize the financial system, they argued, to avoid another Great Depression. This is nonsense. The federal government could have used what’s known as “FDIC resolution” to take over insolvent institutions while protecting retail customers. Yes, taxpayer money still would have been involved, but shareholders, bondholders and top executives would have taken bigger losses. These relatively rich groups of people are precisely the ones who should burn their fingers when they touch hot stoves. Capitalism without bankruptcy, after all, is like religion without hell. And that’s what we got with TARP. Private profits and socialized losses are no way to operate a prosperous economy.

The part about “FDIC resolution” is critical. I’ve explained, both in a post criticizing Dick Cheney and in another post praising Paul Volcker, that policymakers didn’t face a choice of TARP vs nothing. They could have chosen the quick and simple option of giving the Federal Deposit Insurance Corporation additional authority to put insolvent banks into something akin to receivership.

Indeed, I explained in an online debate for U.S. News & World Report that the FDIC did handle the bankruptcies of both IndyMac and WaMu. And they could have used the same process for every other poorly run financial institution.

But the politicians didn’t want that approach because their rich contributors would have lost money.

I have nothing against rich people, of course, but I want them to earn money honestly.

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Government Motors: Losing $49,000 for Every Chevy Volt Sold

While I often complain about government waste and stupidity, I’m not even sure what to say about this grim bit of news from Reuters.

General Motors Co sold a record number of Chevrolet Volt sedans in August — but that probably isn’t a good thing for the automaker’s bottom line. Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts. Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher. There are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce. …The weak sales are forcing GM to idle the Detroit-Hamtramck assembly plant that makes the Chevrolet Volt for four weeks from September 17, according to plant suppliers and union sources. It is the second time GM has had to call a Volt production halt this year. GM acknowledges the Volt continues to lose money, and suggests it might not reach break even until the next-generation model is launched in about three years.

Gee, it’s almost as if everything that critics have said all along is right.

But not to worry, taxpayers are underwriting the costs. So if bigger subsidies are the price of buying support from the UAW and allowing fat-cat incompetent managers to stay on the job, that just means a bigger tab to pay for the rest of us.

How comforting.

P.S. If you’re a taxpayer and need to be cheered up, these cartoons may help.

P.P.S. This spoof video on the Volt may be even funnier.

P.P.P.S. Last but not least, Government Motors plans to build on the success of the Volt with the Obummer. It was due in 2011, but standard government incompetence has pushed back the release date.

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Auto Bailout Humor

For some reason, I haven’t seen much political satire about the GM/Chrysler bailout.

Indeed, the only bailout humor I found in my archives are this funny cartoon about the Federal Reserve helping to bail out Europe and this very good cartoon about Greece deciding to take more handouts from the rest of Europe.

But these two cartoons hopefully are a start of a new trend.

If you like Payne’s work, you can view more of my favorites here, here, here, here, here, and here.

Some of my favorite Bok cartoons can be seen here, here, here, here, here, here, and here.

P.S. Here’s one more bailout cartoon, featuring a hapless taxpayer playing a rigged blackjack game with Fannie Mae and Freddie Mac.

P.P.S. How can I forget one of the most popular humor posts in the history of this blog, this image of how the bailout-hungry Greeks view the rest of Europe (with bonus sections showing how Americans view Europe, how the English view Europe, and – be forewarned – how the former Italian Prime Minister viewed Europe).

P.P.P.S. I commented the other day on the cost of the bailout jumping to $25 billion. It’s actually a lot higher when you count other bailout expenses, as John Ransom explains.

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Auto Bailout Cost Climbs to $25 Billion, yet Obama Thinks It Is a Success and Threatens to Do the Same for other Industries

I’ve been against the auto bailout from the very beginning because it was a corrupt payoff to lazy corporate fat-cats and an ossified union.

And when folks on the left say the bailout is a success, I explain that any industry can be propped up with a sufficiently large injection of other people’s money.

Now we have new data on how much “other people’s money” has been diverted. It’s a big number, and it seems to get bigger each time there’s a new estimate. Here’s part of a Reuters report.

The U.S. Treasury Department has said the auto industry bailout will cost taxpayers $3.4 billion more than previously thought. Treasury now estimates the 2009 bailout will eventually cost the government $25.1 billion, according to a report sent to Congress on Friday. That is up from the last quarterly estimate of $21.7 billion.

Sort of reminds me of the old joke about the lousy businessman who says he loses money on every sale, but he makes up for it with high volume.

Well, that incompetent businessman has a kindred spirit in the White House. Here’s some of what Politico reported.

President Obama, while villifying Mitt Romney for opposing the auto industry bailout, bragged about the success of his decision to provide government assistance… he said. “Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry…”

Well, we can’t say we haven’t been warned. He wants to do the same thing in “every industry.” Well, according to the Bureau of Economic Analysis, there are 60 industries in America. At $25 billion each, that means $1.5 trillion.

Stimulus in action

By the way, Mickey Kaus explains that the government’s numbers are incomplete and that the actual damage is significantly higher. And this Reason TV video exposes some of the government’s chicanery.

P.S. If you’re in the mood for some satire, here’s a bailout form showing how you can become a deadbeat and mooch off the government.

P.P.S. Just in case you’re new to this blog and don’t know my history, rest assured that I’m also against Wall Street bailouts.

P.P.P.S. Ethical people should boycott GM and Chrysler, particularly since these companies are now handmaidens of big government.

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Hilarious Spoof on the Chevy Volt

This might not be quite as funny as the Iowahawk video on the Pelosi GTxi SS/RT, but it’s a close call. In any event, this is extremely clever, makes an important philosophical point, and deserves to be shared widely.

And since we’re on the topic of mooching car companies, here’s another very good parody, featuring the sleek new Obummer from Government Motors.

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I’m Proud of Americans for Rejecting the GM Looters and Buying Ford Instead

I’ll start with an important caveat and state that Ford is far from a perfect company. It has its snout in the trough for boondoggles such as green energy programs. And it happily benefits from protectionist restrictions on foreign pickup trucks and SUVs.

That having been said, there is an enormous difference between Ford, which did not get bailout cash, and the moochers and looters at GM and Chrysler. Which is why I said on TV last year that all ethical people should boycott the latter two companies.

And I’m very proud that other Americans feel the same way. Here are some excerpts from a story in the UK-based Daily Mail.

The Rasmussen Poll asked likely voters: “Have You or Anyone in Family Bought Car from Ford Because Didn’t Take Government Bailout?” 19% said yes, including 33% of the people 18-29 — and 28% of black voters — and 32% of government workers. …25% said yes when asked “Has Bailout and Government Takeover of GM Caused You or Anyone You Know to Avoid Buying GM Car?” …Rasmussen also asked: “Does Fact that GM Took Bailout Money Make You More/Less Likely to Buy GM Car?” 50% said less likely — just 4% said more likely. To the question “Ford Didn’t Take Bailout Funding. Make You More/Less Likely to Buy from Ford?” — 51% said more likely and 12% said less likely.

Here is an ad that Ford apparently is not using anymore because of pressure from the Obama Administration. But please share this link so more people can see it. Kudos to Chris, a patriot in the finest sense.

By the way, some statists are arguing that the bailouts are a success because GM and Chrysler are still alive. But as I’ve explained before, any money-losing entity can be kept alive in perpetuity (or at least ’til the point of Greek-style collapse) by raping and pillaging taxpayers.

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Why Is a Car Company CEO Urging a Gas Tax Hike?!?

I’ve finally set up a youtube page for my TV interviews. Here’s my discussion with Judge Napolitano about crony capitalism, General Motors, and the bizarre case of a car company CEO endorsing an increase in the gas tax.

The most important point of the interview, at least I hope, is that companies get corrupted and housebroken when they receive handouts, subsidies, and bailouts. And since this is becoming more common, it means America is in danger of becoming another Argentina.

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With a Few More “Successes” Like the GM Bailout, We’ll Be Greece in Record Time

Most of us have probably heard the joke about the moronic salesman who admitted to losing money on each sale but was hoping to make it up with higher volume.

E.J. Dionne of the Washington Post is taking this financial approach to a new level. His column today asserts the auto bailout was a success and he celebrates the supposed efficiency and competence of big government.

Don’t expect to see a lot of newspapers and Web sites with this headline: “Big Government Bailout Worked.” But it would be entirely accurate. …Far too little attention has been paid to the success of the government’s rescue of the Detroit-based auto companies, and almost no attention has been paid to how completely and utterly wrong bailout opponents were when they insisted it was doomed to failure. …Government failure gets a lot of coverage. That’s useful because government should be held accountable for its mistakes. What’s not okay is that we hear very little when government acts competently and even creatively. For if mistakes teach lessons, successes teach lessons, too.

So was the auto bailout a success? That’s certainly Dionne’s spin. He sets the bar at a very low level. Basically, if GM is still in business and every so often has a profitable quarter, he wants us to believe the bailout was a giant success.

Libertarians, by contrast, set the bar very high. They would say the bailout is a failure, regardless of GM’s status, because it relied on the coercive power of the government to steer capital in ways that reward failure and exacerbate moral hazard.

The average person presumably is more lenient, and will say the bailout is a success if GM returns to profitability, all the taxpayer money is repaid, and the company isn’t relying on special handouts.

By this “average-person” standard, the GM bailout is a failure. Yes, the company is still in business, but only because of huge handouts, special tax treatment, and the ability to screw creditors. In other  words, GM is sort of like the ethanol industry, kept afloat with other people’s money. Indeed, GM is even worse since (so far as I know) companies like ADM get handouts and special tax loopholes for ethanol, but don’t have the ability to renege on their debts.

So what does all this mean? Nobody disagrees with the notion that a money-losing company can be kept alive forever so long as politicians are willing to provide sufficient levels of other people’s money. And that certainly is a good description of what’s happened with GM, but Dionne wants us to see this as a remarkable success for the wisdom of government intervention.

But let’s do an experiment. If the GM bailout is a success, what would happen if we replicated that “success” over and over again. If we lose money on each bailout, can we make it up on volume?

In E.J. Dionne’s fantasy world, the answer is yes. In the real world, we become Greece even faster.

For those that want more information, my Cato colleague Dan Ikenson has some good analysis about the auto bailout here and here, and Megan McArdle dissects the profitability argument here. Mickey Kaus is a must-read on these issues. You can find his discussion of GM’s profitability here, and his discussion of the company’s IPO here.

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Fight against Corruption and Bailouts by Boycotting GM and Chrysler

I was on Fox News last week and unloaded on the General Motors bailout.

I’m surprised I wasn’t foaming at the mouth.

My conclusion is that people with honor and integrity should refuse to buy cars from companies that stole money from taxpayers.

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If the GM Bailout Is Obama’s Definition of Success, No Wonder America’s Heading to Bankruptcy

The President wants us to believe that the recent IPO for General Motors was a smashing success. And it was…if you believe that it’s a good idea to lose money (the direct cost of the bailout) and make the economy less efficient by misallocating resources (the indirect cost of the bailout). The always superb John Lott has a good explanation at Foxnews.com, and here is an excerpt.

Only the government would consider it a success to buy stock at $43.84 a share and sell it at $33. — But President Obama and those who supported his bailout of General Motors and Chrysler are claiming just that…  It simply doesn’t account for the over $50 billion in direct bailout funds and the tens of billions of dollars in other breaks President Obama gave the company and its unions. It also ignores that GM’s stockholders and particularly its bondholders had their wealth stolen from them when the government took over ownership of the company. Traditional property right protections were shredded by the Obama administration, making corporate investments in America riskier as a result.

By the way, Mickey Kaus is surprised that investors were willing to buy GM shares, but he hypothesizes that they were fools or that they expect GM to hollow out its American operations and build cars in China.

Either way, not a good way to squander the tax dollars of the American people. Another legacy of Bush-Obama statism. Way to go, guys!

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A Contest: Which Story Is More Upsetting?

Here’s a change of pace. Instead of doing separate blog posts on the following two stories, I’m curious to see which one generates the most irritation/anger/disgust from you readers. The first option comes from the Wall Street Journal’s editorial page, which is appropriately upset that Government Motors…oops, I mean General Motors…is back in the business of lobbying and dishing out campaign contributions. I don’t think there’s anything wrong with petitioning government and participating in the political process, but I don’t think individuals or companies should be doing it with money taken from me by a coercive government.

General Motors is 61%-owned by American taxpayers, who were less than thrilled when forced to buy GM by Presidents Bush and Obama. We can only imagine how GM’s unwilling owners will react now that the company is once again spending freely on lobbying and political campaigns. The Journal reports that the company has been particularly kind lately to Midwestern Democratic incumbents while shovelling out a total of $90,500 in campaign donations so far in the current election cycle. On the lobbying side, The Hill newspaper reports that GM has spent $7 million in the four quarters since exiting bankruptcy, retaining a who’s who of Washington hired guns. This may sound like the business model of Fannie Mae and Freddie Mac all over again, but remember that the failed mortgage giants at least had to shut down most of their Beltway influence operation once they explicitly became wards of the state. GM has your money and now it apparently has the license to use it to lobby Congress and support its political friends. …There’s also the intriguing legal matter of the United Auto Workers union still lobbying Congress and supporting political campaigns even after becoming a partner with the government in the automobile business. 

The second option embarrasses me greatly, because it is a sign of bureaucratic nonsense from my beloved University of Georgia. A student got in trouble for sending an email to the Parking Services division to gripe about the lack of scooter parking. The snot-nosed bureaucrat who received the email apparently got the vapors because of this sentence: “Did you guys just throw darts at a map to decide where to put scooter corrals?  Can I expect you guys to get off your asses and put in a corral near there some point before I fucking graduate and/or the sun runs out of hydrogen?” This led to the student being subjected to real threats and potential disciplinary action. Fortunately, the great folks at the Foundation for Individual Rights in Education came to the rescue and the craven bureaucrats at UGA backed down.

The University of Georgia (UGA) has withdrawn charges of “disorderly conduct” and “disruption” filed against a student after he sent a mocking e-mail to UGA Parking Services to complain about the lack of parking spaces for scooters on campus. Although Parking Services specifically asks students for both “negative & positive” comments on its performance, student Jacob Lovell spent nearly a month under the threat of punishment after submitting his e-mail. UGA backed down after Lovell came to the Foundation for Individual Rights in Education (FIRE) for help. “Jacob Lovell just wanted to park his scooter on campus, and when he found it a frustrating experience he sent a joking e-mail to the department that had asked for his feedback. But when it received his e-mail, he was threatened with punishment!” said FIRE President Greg Lukianoff. “Only on a college campus could a clearly flippant response to requests for complaints about parking on campus be turned into a judicial investigation for disorderly conduct.” …On August 17, 2010, Lovell e-mailed Parking Services with his complaint about its service. His flippant and joking e-mail mused, “Did you guys just throw darts at a map to decide where to put scooter corrals?” and otherwise made fun of the department for what he perceived to be its poor job of providing parking for scooters. Four hours later, Parking Services replied, “Your e-mail was sent to student judiciary.” On September 3, 2010, Associate Dean of Students Kimberly Ellis sent Lovell a letter charging him with two violations of UGA’s University Conduct Regulations, stating, “Specifically, it is alleged that Mr. Lovell engaged in disorderly conduct and disrupted parking services when he sent an email to them that was threatening.” …The letter required Lovell to make a disciplinary appointment by September 13. Ellis informed Lovell that failure to do so would result in his record being “flagged,” rendering him unable to add, drop, or register for classes. Lovell complied with this requirement on September 13. Meanwhile, on September 10, FIRE wrote UGA President Michael F. Adams, explaining that Lovell’s grievance was protected by the First Amendment. FIRE also repeated to President Adams that UGA maintains unconstitutional speech codes in addition to the regulations used against Lovell’s protected speech, and that administrators could be held personally liable by a court for the violation of students’ constitutional rights, as a federal judge in Georgia ruled recently. On September 14, Ellis informed Lovell that she “did not find sufficient evidence to move forward” with the charges and that the matter was now “closed.”

So which story is more nauseating? In the grand scheme of things, the General Motors story is more meaningful because the company is stealing our money and then using our money to lobby for more handouts. Yet I can’t help but think the UGA story is very symbolic of arrogant and stupid bureaucracy. as many of us have experienced on our trips to a DMV or our efforts to get through security at airports. Every encounter creates the risk that a job-for-life bureaucrat may decide to make your life miserable.

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Labor Day, Unions, and the Role of Government

In a free society, people obviously should be free to join unions and companies should be free to negotiate with unions. But that also means that companies should be free to resist union demands and hire non-union workers. There is no right or wrong in these battles, just as there is no right or wrong when McDonald’s decides to sell french fries for a particular price. The market will reward good decisions and penalize bad choices. The only appropriate role for policy in this area is to enforce contracts and protect public safety. The government should not attempt to tip the scales either in favor of unions or in favor of employers. Our friends on the left, however, want the rules rigged in favor of unions, in part because of a reflexive desire for coerced equality. E.J. Dionne waxes nostalgic in the Washington Post for the good ol’ days, when unions held significant power in the American economy.

Only 12.3 percent of American wage and salary workers belong to unions, according to the Bureau of Labor Statistics, down from a peak of about one-third of the work force in 1955. A movement historically associated with the brawny workers in auto, steel, rubber, construction, rail and the ports now represents more employees in the public sector (7.9 million) than in the private sector (7.4 million). Even worse than the falling membership numbers is the extent to which the ethos animating organized labor is increasingly foreign to American culture. The union movement has always been attached to a set of values — solidarity being the most important, the sense that each should look out for the interests of all. This promoted other commitments: to mutual assistance, to a rough-and-ready sense of equality, to a disdain for elitism, to a belief that democracy and individual rights did not stop at the plant gate or the office reception room. You might accuse me of being a union romantic, and in some ways I am, having grown up in a union town, loved the great union songs, and imbibed such novels about labor’s struggles as John Steinbeck’s fine and underrated “In Dubious Battle.” 

There would be nothing wrong with Dionne’s love letter to big labor – but only if he also agreed that the government should not take sides. Unfortunately (and predictably), that’s not the case. Like other statists, he wants a thumb on the scales to help unions. He thinks he is being pro-worker, but his mistake is failing to understand that above-market wages (at least in the private sector) are not sustainable in the long run. Workers ultimately get paid on the basis of what they produce and if it costs $25 per hour to employ a worker and that worker produces $23 per hour of output, that ultimately is a recipe for unemployment. A good example is the American auto industry, which has declined in part because of a compensation system that is not matched by productivity. This does not necessarily mean that wages are too high. It could mean that productivity is too low. Some of that, to be sure, is the fault of government policies such as a corporate tax system that penalizes investment (thus making it more difficult for workers to boost productivity). But unions also have used their government-granted power to insist on absurd workforce practices. The picture below, taken from Mark Perry’s excellent blog, compares union contracts in 1941 and 2007. With all the bureaucracy that is buried in those pages, is it a surprise that American auto workers don’t produce as many cars per hours as their main foreign competitors?

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GM’s New Supercar: The 2011 Obummer

Clever creation on someone’s part, but since we’re on the topic of government-created cars, this video is the best and funniest I’ve ever seen.

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The Corrupt Washington Version of Recylcling

If you’re an American taxpayer, you’re doubtlessly overjoyed to be an involuntary shareholder in General Motors. You’ll be even happier to know that the company is squandering funds on political causes. In other words, they have enough money to be greasing the palms of politicians, but somehow don’t have enough money to survive without stealing money from us. But this does give us a teachable moment (albeit a very expensive one). The behavior of GM illustrates how politicians manage to get kickbacks whenever they give away our money (though the story didn’t mention the biggest source of kickbacks – the money and other forms of political support from the United Auto Workers). This is Washington’s version of recycling. Politicians take money from us, give it to some interest group, and then the interest group gives a slice of the money back to the politicians. Everybody wins. Except people with ethics.

When General Motors went through bankruptcy last year, it suspended its political donations. Now that it’s owned by the U.S. government, it’s donating to lawmakers’ pet projects again. The carmaker gave $41,000 to groups associated with lawmakers, the vast majority of it — $36,000 — to the Congressional Black Caucus Foundation, the company reported on a disclosure form last week. The CBC Foundation is a charity with 11 members of the Congressional Black Caucus on its board. …The U.S. government now has a 60 percent stake in the reformed company. …General Motors has not reactivated its political action committee, which can give to election campaigns, according to the latest reports with the Federal Election Commission. The PAC contributions come from senior employees who give to support the company’s political goals.

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Sleazy and Dishonest Ad from General Motors Shows Why Big Government and Big Business Is a Toxic Combination

It is now fully apparent that General Motors did not pay back any money to taxpayers, and certainly did not pay back the full amount, as stated in the reprehensibly dishonest ads produced by the company. The Obama Administration took part in the lie, which exposes an additional reason why it was a terrible idea to give the company a bailout. For all intents and purposes, taxpayers paid for the GM ad, and the purpose of the ad – at least in part – was to help the Obama Administration. Welcome to corporatism (the nice way of saying it) and national socialism (the not-so-nice way of saying it). Here’s a great video from Reason.tv explaining GM’s gross prevarication:

The good news is that others are now aware of the Obama/GM scam. Here’s an excerpt from the New York Times:

G.M. trumpeted its escape from the program as evidence that it had turned the corner in its operations. “G.M. is able to repay the taxpayers in full, with interest, ahead of schedule, because more customers are buying vehicles like the Chevrolet Malibu and Buick LaCrosse,” boasted Edward E. Whitacre Jr., its chief executive. …Taxpayers are naturally eager for news about bailout repayments. But what neither G.M. nor the Treasury disclosed was that the company simply used other funds held by the Treasury to pay off its original loan. …It’s certainly understandable that G.M. would want to spin its repayment as proof of improving operations. But Mr. Grassley said he was troubled that the Treasury went along with the public relations campaign and didn’t spell out how the loan was retired. “The public would know nothing about the TARP escrow money being the source of the supposed repayment from simply watching G.M.’s TV commercials or reading Treasury’s press release,” Mr. Grassley said in a speech on the Senate floor last Wednesday, saying that “many billions” of federal dollars remained invested in G.M.

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