Treasury sells off the last of its GM stock at a $10 billion taxpayer loss

And with that, it’s “Government Motors” no more. At least, not officially.

U.S. taxpayers no longer own any of automaker General Motors. The Treasury sold the last of its remaining 31.1 million GM shares today.

The taxpayer loss on the GM bailout finishes at $10.5 billion. The Treasury department said it recovered $39 billion from selling its GM stock, and had put $49.5 billion of taxpayer money into the GM bailout. …

GM and Chrysler both went through government-scripted Chapter 11 bankruptcy reorganizations. Treasury put $12.3 billion into Chrysler and recovered $11.13 billion of that.

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The big argument by Obama officials and bailout apologists everywhere, of course, is that on net evaluation the $10 billion direct hit taxpayers are taking on this is well worth the jobs and economic infrastructure that the federal government “saved” on behalf of the Detroit auto companies, and ergo, this was a wise move and big subsequent win for the American economy.

“Inaction could have cost the broader economy more than one million jobs, billions in lost personal savings, and significantly reduced economic production,” Treasury Secretary Jacob Lew said in a statement announcing that Treasury had sold all its remaining shares.

…But, we can never really know that, can we? Certainly the implosion of these companies would have caused a lot of very real material pain at the outset, but creative destruction and the opportunity to fail are as much a part of an economy’s long-term success as anything else. The precedent for massive corporate bailouts is now set, and General Motors is the lucky benefactor of competition deliberately denied from other companies, global and domestic, who made better business decisions and/or offered a superior product. Obama’s supporters are quick to point to “the rescue” of the U.S. auto industry as one of his greatest presidential achievements (which, to me, is an indicator of how tough it must be for them to scrape together a list of his presidential achievements, but I digress), but this entire situation is one of the many means through which President Obama has opened the door to Big Business rent-seeking and cronyism capitalism at the expense of both the Little Guy and the American economy at large.

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David Strom 3:20 PM | November 15, 2024
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David Strom 12:40 PM | November 15, 2024
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