Reason Writers Around Town: Shikha Dalmia on More Bailout Baloney from General Motors


President Obama is planning to make the news that General Motors made profits last quarter and is rehiring again a major part of his re-election campaign. But as Reason Foundation Senior Analyst Shikha Dalmia points out, if this is a success, then Charlie Sheen is a smash hit. In fact, she notes, GM's latest earnings report shows that, absent a miracle, the company will never be able to repay taxpayers in full. They stand to lose, she says:

anywhere from $13 billion to $19 billion on their principal and another $45 billion on taxes, for a grand total of from $58 billion to $64 billion in losses. And that's just for GM. Chrysler is a whole different—and equally sordid—story. Even Treasury Secretary Timothy Geithner acknowledged last month, "We're going to lose money in the auto industry."

Read the whole thing here.

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  1. No, no, no. Socialism always works in the manufacture of things like cars.

    1. Why are people always calling me a socialist?

    2. Why are people always calling me a socialist?

    3. Why is everyone calling me a socialist?

    4. Why does everyone call me a socialist?

    5. Why do people keep calling me a socialist? 

    6. That explains the longstanding worldwide auto market domination of Lada’s

  2. How many jobs were saved from moving to a Toyota or Ford plant?

    1. Saved or created!

      1. Lives: They’ve been touched.

  3. The equity means two things: One, GM has zero interest payments, something that gives it a distinct advantage over competitors. Ford, by contrast, had to pay $251 million in debt-service costs. Despite this, GM’s real per-vehicle margin was over $1,000 less than Ford’s, thanks to the heavy incentives it was forced to give buyers.

    See? It always evens out in the end.

    I would like to know if Ford workers still vote for Obama next year.

    1. Very good question.

    2. Yes. That was easy.

    3. The union will. The execs won’t. Guess who controls more votes.

    4. “I would like to know if Ford workers still vote for Obama next year.”

      The question is whether working taxpayers in every other sector who were forced to pay for this crap will vote for Obama again next year…

      Instead of “Hope and Change”, his slogan next year should be, “Thank you sir, may I please have another?”

  4. What’s good for General Motors is good for the USA.

    1. Great. I will tell my creditors they can expect 10 cents on the dollar!

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  6. When I read about this GM debacle, I feel a sense of dread that sometime in the relatively near future I’ll find myself weeping next to a disabled train somewhere in the southwest in the middle of the night.

  7. Why does reason keep marking anything I post as spam?

    1. Dammit, I keep trying to post something up above and Reason won’t let me. No I don’t want to email the webmaster, I just want to post a snarky comment just like everyone else on this fucking site does.

  8. b- but I heard Chrysler is paying back $7.5B.. hooray?

  9. As always when they spin such BS, Obama and the dems are counting on the slavish lackeys in the mainstream media to lap it all and faithfully regurgitate all of it without question.

    And that is always a good bet.

  10. Do you guys know of any website where I can find information on how the GM/Chrysler bailouts were structured (both the pre- and post- bailout versions) and the progress both companies are making towards paying them back? I’m currently arguing with a liberal over whether or not the car bailouts were a good idea, and his entire argument rests on the fact that the U.S. government made money on the Chrysler bailout (it’s a little complicated, but he won’t admit that we’ll never recoup the money from our equity stake in GM). I know that “the government will not make money on the bailout” is not a principal reason to be against the bailouts, but I do feel compelled to at least address his argument. Any links would be greatly appreciated.

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