...The Treasury Department estimates that taxpayers will lose $23 billion on the auto bailout. Sherk and co-author Todd Zywicki find that none of these losses came from saving jobs, but instead went to prop up the compensation of some of the most highly paid workers in America. They write:
We estimate that the Administration redistributed $26.5 billion more to the UAW than it would have received had it been treated as it usually would in bankruptcy proceedings. Taxpayers lost between $20 billion and $23 billion on the auto programs. Thus, the entire loss to the taxpayers from the auto bailout comes from the funds diverted to the UAW.
The Obama campaign is touting the bailout in Michigan this week, crowing about saved-or-created jobs. What the bailout actually saved was the UAW’s heavily padded compensation packages; what it created was a massive taxpayer loss.
The UAW was a significant factor in the automakers’ decline: It had raised Detroit’s labor costs 50 percent to 80 percent above other automakers, such as Toyota and Nissan. In 2006, General Motors paid its unionized workers $70.51 an hour in wages and benefits. Chrysler paid $75.86 an hour. Added to mistakes by management, these labor costs were a major reason the automakers went bankrupt.
However, through the bailout, the Obama Administration insulated the UAW from most of the sacrifices unions usually make in a bankruptcy—at taxpayer expense. ...Had the government treated the UAW in the manner required by bankruptcy law, taxpayers would have broken even. The program would have amounted to bankruptcy financing instead of an outright bailout. The Administration could have kept the automakers running without losing a dime.
Instead, more than $26 billion went out the door and into the UAW’s pockets. Let’s put that in perspective: The amount of the subsidy given directly to the UAW was bigger than the budget of the entire State Department. It was bigger than all U.S. foreign aid spending. It was 50 percent more than NASA’s budget.
The Administration did not bail out GM and Chrysler. It bailed out the United Auto Workers.
When the real history of the Obama administration is written, its unprecedented and wanton lawlessness -- Solyndra, GM, Fast and Furious, and suing states for enforcing federal immigration and voter ID laws, to name but a few -- will make Richard Nixon look like an Eagle Scout.
Cartoon: Cagle Cartoons.