Last week, General Motors began airing ads claiming that they had repaid the money used to bail them out of their deep financial distress. Barack Obama and his supporters seized on the announcement to declare the bailouts a success. Only after careful scrutiny did it come to light that GM had paid off one set of taxpayer loans with another line of taxpayer credit — in effect, moving bailout funds from one account to another. Rep. Paul Ryan (R-WI) wants a full accounting of GM’s status and their claims, and “an end to crony capitalism”:
You may have read reports from the Obama Administration or seen ads on TV claiming that General Motors has fully paid back what it owes you the American taxpayer.
These claims struck me as odd and misleading. The federal government still owns over 60% of this auto company. This so-called repayment is actually a transfer of $6.7 billion from one taxpayer-funded bailout account to another.
As this is your money, I think you deserve some clarity on this shell game. My colleagues Congressmen Jeb Hensarling, Scott Garrett and I have asked Treasury Secretary Tim Geithner to provide an updated, accurate, and honest account of the taxpayer money that is still propping up General Motors.
If anyone is owed a clear and honest explanation it is those hit hardest by the downturn in the auto industry, including those I serve in Janesville, Kenosha, Oak Creek and the surrounding communities in Southern Wisconsin.
It is time to put an end to the crony capitalism in Washington.
Shouldn’t the FTC check into GM’s advertising as a violation of truth-in-advertising regulations? The intent of this ad was to sell cars under the false pretense that the government was no longer keeping GM afloat. GM knows that the perception of failure has badly damaged their brand, and ridding itself of the stench of the unpopular bailouts would mean ending a competitive disadvantage. This looks like a fraudulent attempt to achieve that result.
Or does the FTC not concern itself with government-owned businesses? Crony capitalism, indeed.