The Road To Ruin
May 22, 2012 by Ben Crystal
The list of things the Federal government does well is fairly short. It comprises items like the 3rd Infantry Division; the United States Penitentiary Administrative Maximum Facility in Florence, Colo.; the Eisenhower Interstate Highway System (except that part near New York City that has been under construction since Ike was still alive) and… er… the dime is a nice coin.
The list of things the government does poorly is — obviously — much, much longer and includes essentially everything else. It’s probably worth noting that some things the government does well — like arming Mexican narcoterrorists and lying about it to Congress or teaching fourth-graders proper condom application — don’t really deserve a place in the “good” category. Actually, given the fact that the Nation’s teen pregnancy rate is skyrocketing like Bill Clinton’s blood pressure in a plus-size strip club, the government doesn’t deserve credit for condom application in either direction.
Also earning a place on the latter list: automobile manufacturing. Last week, an analysis by economist John Lott that appeared in the National Review (and went unremarked upon by the corporate media) revealed that Barack Obama’s 2009 bailout of the auto industry is likely one of the greatest boondoggles of the modern age. In order to allow his union cronies to take control of the beached whale that was General Motors Co., Obama handed the largest of Detroit’s “Big Three” $100 billion in taxpayer money. According to figures released last week, GM is now worth about one-third of that figure.
The plan, of course, was to infuse with our cash the same company that brought you such revolutionary designs as the remarkably pedestrian Epsilon platform, which currently keeps nearly 20 (!) GM cars on the road. And who could blame Obama for the gift? Where would we be without the magnificent Chevy Malibu and the spectacular Saturn Outlook (RIP)? (Answer: stranded at the airport since the rental counters are flush out of cars.) In Obama-speak, spending $100 billion in taxpayer money to purchase a life jacket for a company that has collapsed under the weight of union contracts is called rescuing “the heart of American manufacturing.” It is worth mentioning that those contracts drove GM’s manufacturing costs-per-hour to nearly $30 higher than Toyota Motor Corp.’s, and its products are still underdesigned.
Even more amazing is the manner in which GM has spent our money. For $100 billion, we got the Corvette, a couple of the Cadillac models, the literally smoking-hot Chevy Volt and a plurality of the fleet cars in North America.
Despite the Brobdingnagian blunder that is the company we now affectionately call “Government Motors,” Obama actually crows about the bailout as a success on his campaign website and in a new television ad campaign, claiming he “Refused to Let the Auto Industry Vanish.” His claims are cheered by the usual liberal suspects who either make vague claims about the reinvigoration of the moribund GM, refer to the successes of the “Big Three” without mentioning Ford Motor Co.’s refusal to accept a bailout (we’re looking at you, Chris “Double Jeopardy” Matthews) or flat out lie. Most of Obama’s claims fall squarely in that third category. His new ads tout “millions” of jobs saved. That’s a hell of a trick considering the total number of jobs in the American automotive industry — including bailout-denying Ford and Toyota — is about 700,000. What’s worse — and wisely unmentioned in Obama’s ads — is the fact that as of now, General Motors (from Volts to bolts) is worth about $34 billion.
In 2005, GM began showing cracks in its foundation, losing more than $10 billion. The unwieldy union deals (virtually untouched by the Obama bailout) were forcing the company toward bankruptcy. The losses mounted until December 2008, when the company admitted it was almost out of cash. Obama swept in, fired then-CEO Rick Wagoner and upped the taxpayer ante to a cool $100 billion, which now is not only beyond possible to repay but beyond the total value of GM by a factor of three.
In one of Obama’s auto industry ads, he mentions: “What happened in Detroit can happen in all sorts of communities…” Despite Obama’s infamous insincerity, he really means it. Judging by his economic “successes” like GM, if he’s re-elected he can do it, too.