The President wants us to believe that the recent IPO for General Motors was a smashing success. And it was…if you believe that it’s a good idea to lose money (the direct cost of the bailout) and make the economy less efficient by misallocating resources (the indirect cost of the bailout). The always superb John Lott has a good explanation at Foxnews.com, and here is an excerpt.
Only the government would consider it a success to buy stock at $43.84 a share and sell it at $33. — But President Obama and those who supported his bailout of General Motors and Chrysler are claiming just that… It simply doesn’t account for the over $50 billion in direct bailout funds and the tens of billions of dollars in other breaks President Obama gave the company and its unions. It also ignores that GM’s stockholders and particularly its bondholders had their wealth stolen from them when the government took over ownership of the company. Traditional property right protections were shredded by the Obama administration, making corporate investments in America riskier as a result.
By the way, Mickey Kaus is surprised that investors were willing to buy GM shares, but he hypothesizes that they were fools or that they expect GM to hollow out its American operations and build cars in China.
Either way, not a good way to squander the tax dollars of the American people. Another legacy of Bush-Obama statism. Way to go, guys!
