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.
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