Tuesday, July 03, 2012

Good news: GM now owes taxpayers $35 billion (and by the way, how are those electric cars working out in DC?)

Well, the meme that the Obama campaign and its spokespeople in vintage media continue to promote is that a heroic Barack Obama saved General Motors.

Of course, as Andrew Malcolm reports today, it was the American taxpayer that saved GM -- at huge and needless expense.

General Motors shares fell to a fresh 2012 closing low of 19.57 on Monday. The stock hit 19 in mid-December, the lowest since the auto giant came public at $33 in November 2010 following its June 2009 bankruptcy.

Normally you might say, tough luck investors. But this is Government Motors. The Treasury still owns 26.5% of GM, or 500 million shares. Taxpayers are still out $26.4 billion in direct aid. Shares would have to hit $53 for the government to break even.

Those shares were worth about $9.8 billion as of Monday. That would leave taxpayers with a loss of $16.6 billion.


But that's not the full tally. Obama let GM keep $45 billion in past losses to offset future profits. Those are usually wiped out or slashed, along with debts, in bankruptcy. But the administration essentially gifted $45 billion in write-offs (book value $18 billion) to GM. So when GM earned a $7.6 billion profit in 2011 (more on that below), it paid no taxes.

Include that $18 billion gift, and taxpayers' true loss climbs to nearly $35 billion.

Which brings me to Washington, DC, which is still suffering from days-long power outages after major thunderstorms rolled through the area. I wonder how those electric cars are working out in the DC area?

If you're in the DC area, are you happy you don't have an electric car? Yeah, with the power outages, are you happy you don't have an electric car? Because two million, five million, three schmillion, whatever. Aren't you glad you don't have an electric car? By the way, how are those windmills working out for you? How are the windmills and solar panels working out? Are they running your air-conditioning for you?

...It's a good thing you don't have an electric car or you couldn't get around, you couldn't escape. Isn't it amazing.

Thank goodness, the masterminds in D.C. are instructing GM and other automobile companies to create even more electric cars. Never mind they don't work for s***. Misery loves company.


4 comments:

Chris said...

Your car comment parallels what I've posted on other blogs.

This major electrical outage (I live in NoVa, just far enough from the Emerald City of Odds) sure would have ruined a Greenie Weenie wet dream!!

Robert Janicki said...

Just a side note for taxpayer owners of GM who are liberal and concerned with outsourcing of vendors and off shoring of GM manufacturing.

61% of the cost of a GM vehicle is a result of outsourcing parts manufacture and or technology support to domestic and foreign suppliers. In addition to the outsourcing, off shore manufacturing and technology account for the other portion of the 61%.

When a liberal tells you that Obama saved GM, what they meant to say is that Obama saved a lot of foreign jobs in the process at the expense of American taxpayers.

In addition, Obama destroyed the bankruptcy laws that would have allowed GM to systematically reorganize into a leaner and more efficient business operation starting with canceling all union contracts and restarting the bargaining process within real labor market conditions.

Right now the UAW owns approximately 60% of GM with the taxpayers holding approximately 30% of GM stock currently valued at less than half of what the bailout of GM cost. GM will never be able to repay the taxpayers for the bailout and that is a mathematical certainty.

I say this as a retired GM salaried employee. GM became part of the crony capitalist system we have come to know as the federal government AKA the statist corporatist cabal between government, business and labor unions.

We're doomed unless November 6 brings about a whirlwind change in the presidency and the Senate, while holding the House.

Anonymous said...

I lied in both Northern Va and Md for many years. I can't tell you how many times, after a major snowfall, a call went out over radio and tv for volunteers with large 4wd vehicles to help transport essential workers into the District.
I'm trying to think of who manufactures an electric 4wd hummer with a battery good for 100+ miles.....Scratch that; I'm trying to think of who makes an electric car that even works in sub-zero weather.

Anonymous said...

I lived in both Northern Va and Md for many years. I can't tell you how many times, after a major snowfall, a call went out over radio and tv for volunteers with large 4wd vehicles to help transport essential workers into the District.
I'm trying to think of who manufactures an electric 4wd hummer with a battery good for 100+ miles.....Scratch that; I'm trying to think of who makes an electric car that even works in sub-zero weather.