Warner Todd Huston
GM bailout: bait and switch and drive that lemon away
By Warner Todd Huston
General Motors was too big to fail. This is why President Obama had to ride in on his white steed with billions of taxpayers dollars in hand to bailout GM rechristening it Government Motors. Besides, we were told it would be a great deal, a money maker, right? Well, not so much. The Administration has reported a dramatic increase in the money We The People have lost on the GM bailout.
This week the Treasury Dept. has announced that the estimates of our loss has gone from $14.33 billion tax dollars to $26.6 billion.
To put it in terms easier to understand, for the American people to just break even on the bailout deal the more than 500 million shares owned by the U.S. Treasury must sell at $53 a share. Unfortunately for all of us, GM stock has tumbled to just $22.99 (as of closing on Nov.14). We are waaay off from the break even point, folks!
So, what is Obama going to do about this failed bailout program? How is he going to rectify it all? He intends to make it worse by changing fuel standards to the point where new cars will cost another $2,000 per car.
Obama has decreed through his powers to regulate that the auto industry must raise fuel efficiency standards by five percent by 2025. There is only one little problem with these demands. Current technological development and science cannot yet reach those goals. Obama has set standards just because he feels like it, not standards based on realistic goals.
These requirements will make cars harder to afford for folks in the middle class and lower middle class not to mention the additional burdens it will place on small businesses trying to purchase cars for their businesses.
Worse, with the costs of new cars skyrocketing, the costs of used cars will go up commensurately. And none of this will help GM's stock prices go up high enough for the American people to break even on the billions our president gave away to the auto giant.
Sadly, Obama's polices don't appear to be too big to fail.
© Warner Todd Huston
November 19, 2011
General Motors was too big to fail. This is why President Obama had to ride in on his white steed with billions of taxpayers dollars in hand to bailout GM rechristening it Government Motors. Besides, we were told it would be a great deal, a money maker, right? Well, not so much. The Administration has reported a dramatic increase in the money We The People have lost on the GM bailout.
This week the Treasury Dept. has announced that the estimates of our loss has gone from $14.33 billion tax dollars to $26.6 billion.
To put it in terms easier to understand, for the American people to just break even on the bailout deal the more than 500 million shares owned by the U.S. Treasury must sell at $53 a share. Unfortunately for all of us, GM stock has tumbled to just $22.99 (as of closing on Nov.14). We are waaay off from the break even point, folks!
So, what is Obama going to do about this failed bailout program? How is he going to rectify it all? He intends to make it worse by changing fuel standards to the point where new cars will cost another $2,000 per car.
Obama has decreed through his powers to regulate that the auto industry must raise fuel efficiency standards by five percent by 2025. There is only one little problem with these demands. Current technological development and science cannot yet reach those goals. Obama has set standards just because he feels like it, not standards based on realistic goals.
These requirements will make cars harder to afford for folks in the middle class and lower middle class not to mention the additional burdens it will place on small businesses trying to purchase cars for their businesses.
Worse, with the costs of new cars skyrocketing, the costs of used cars will go up commensurately. And none of this will help GM's stock prices go up high enough for the American people to break even on the billions our president gave away to the auto giant.
Sadly, Obama's polices don't appear to be too big to fail.
© Warner Todd Huston
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