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The Spectacle Blog

Geithner: "We Will Not Get Back All of Our Investments in the Industry"

By Joseph Lawler on 6.1.11 @ 11:37AM

Treasury Secretary Tim Geithner's Washington Post op-ed is supposed to make the administration's bailouts of the auto industry sound successful, but the facts he musters don't really tell the story he wants. Even his conclusion is weak, and in it he acknowledges that the government will never recoup its funds:

While it remains unacceptably high, Detroit's unemployment has fallen nearly one-third over the past two years. The car companies are leading a comeback in American manufacturing. And while we will not get back all of our investments in the industry, we will recover much more than most predicted, and far sooner.

What happens next for Chrysler and GM is up to their executives, managers and workers - just as with any other company. We cannot guarantee their success, and at some point they may stumble. But we've given them a better shot. The choice to stop the American automobile industry from unraveling was the right one.

So in this piece, Geithner is arguing that the administration's response to the failure of GM and Chrysler was a success, even though we will lose money on the deal, because today those companies are still in business.

That's a pretty low bar to clear, especially considering that giving Chrysler and GM "a better shot" is not a desirable goal for any government activity. The advantage given to Chrysler and GM, by definition, came at the expense of other, unknown companies.

But propping up those two companies sounds a lot better if the alternative is the "unraveling" of the entire automobile industry and its supply chain. Of course, that was never a realistic alternative -- the alternative would have been an earlier bankruptcy, which would have been a more equitable result.

What Geithner is left to brag about in this article is that the government threw billions of taxpayer dollars at a few Democratic-connected companies, trampling on the rule of law along the way. Not much to celebrate here.

View all comments (7) | Leave a comment

Michael L. Hauschild| 6.1.11 @ 11:48AM

Certainly not, but at least all the friends and supporters of the Democrats will now have some fluidity to be able to donate to the DNC with their ill gotten gains.

Clint| 6.1.11 @ 12:36PM

Once again, Big Government Ruling Elite Confiscate Our American Taxpayer Money & Hand It Over To Parasite Leaches.

The Tea Party Rebellion Escalates.

Carpe Diem.

Jeff| 6.1.11 @ 12:44PM

Can Chrysler even be considered a US company anymore ?

ncatty| 6.1.11 @ 1:07PM

Central planning, command and control economy, top-down 5 year plans, they have all been tried before. All we are lacking is a Gulag.

DC| 6.1.11 @ 1:45PM

Orwellian at best...failure equals success! Government money is the government's to spend as it sees fit, not the property of those who earned it, and from whom the government confiscated it in order to enrich political allies. Mussolini would have loved these guys, they're running his playbook better than he did, and so far, without any Gulag analogs. That of course will change if Il Duce Nero gets his way. And that's why we should all redouble our exercising of 2nd Amendment rights, to put extra steel behind the words of the late Admiral Yamamoto, who in response to a question about invading the United States, said (in effect): never; there would be a gun behind every blade of grass. Internal enemies, the current regime included, should take equal note.

Oldefarte| 6.1.11 @ 1:58PM

This lying little dork is full of excrement! It was not the right thing to do.....it was the politically expedient thing to do. With the AFL-CIO, the UAW and every other union [and their thug executives] wispering in Barry's and Tiny Tim's substantial and protracted ears about the need to protect Detroit's collapsing-into-bankruptcy backsides, they flushed millions of taxpayer funds into bailing out these labor unions' jobs. It had nothing to do with domestic automobile manufacturing, and everything to do with labor union employment. It's amazing that the banks [which were on the brink of closing their doors and rightfully needed to be bailed out] have now completely/100% repaid back their borrowed government funds, whereas these domestic [unionized] auto manufacturers still owe the taxpayers $11 billion [and same will never be repaid]. Thank you Barry and Tiny Tim!!!!

big bob| 6.1.11 @ 11:41PM

someone needs to ask this twit in what fashion must we accept his premise that these monies represent an "investment"?? This is right out of Alinsky by redefining words to suit their purposes. This was unconstitutional and has no authority whatsoever as a basis for action.