Taxpayer losses on GM bailout higher than first reported
posted at 6:01 pm on May 2, 2014 by Bruce McQuain
Not that anyone should be particularly surprised that the loss was bigger than first reported. There seems to be a pattern to that. Report bad news on a Friday afternoon news dump and then, months later, quietly amend the bad news to worse news.
In this case the news is that taxpayers got scalped for more than the government first claimed with GM:
The U.S. government posted a deeper loss than initially recorded on the General Motors bailout, according to a government report released today.
Taxpayers lost $11.2 billion on the GM bailout, up from $10.3 billion the Treasury Department estimated when it sold its last GM shares on Dec. 9.
A Treasury Department auditor said the government had written off an $826-million “administrative claim” tied to the GM bailout on March 20.
Goodness knows what the “administrative claim” consists of, but it was worth just south of a billion dollars. And if I had to bet, I’d probably bet this isn’t the last write-off.
Of course one can legitimately wonder what GM learned from its bankruptcy, or perhaps it it is better to describe the process they went through as similar to bankruptcy only not bankruptcy, thanks to the taxpayer’s largess. In fact none of the hard lessons that make companies that successfully emerge from bankruptcy do well afterward were learned. And the administration had a vested interest is ensuring GM didn’t have to go through the real process of bankruptcy because that would have required that all current contracts be voided. Their interest rested in a very powerful and influential interest group — unions. And they went to extraordinary lengths to ensure the unions involved actually came out ahead.
So when the administration says…
“The goal of Treasury’s investment in GM was never to make a profit, but to help save the American auto industry, and by any measure that effort was successful,” Treasury spokesman Adam Hodge said.
…what they really mean is we did this to “help save union jobs and thereby the power and influence of a strictly Democrat interest group.”
This is an administration that has been pretty blatant about its focus on partisan politics and it’s willingness to use the power of government to help its side.
This was no different. And, as usual, they were fine with using other people’s money to help their cause.