GM Repays their loan…SORT OF?

Okay, seems like everyone has seen the ads on TV where the CEO of GM is reporting that GM has repaid all their government loans ahead of time and with interest. GM, President Obama and Vice-President Biden have been all over the press lauding GM for repaying the loans it took from the government last year. But hold on, there is a fly in the ointment that is pretty glaring.

Neil Barofsky, the Inspector General for the bailout, also known as TARP (Troubled Asset Relief Program), came forward this week and announced that GM had indeed repaid the loans, with money it received from a TARP escrow account controlled by the Treasury Department.

So let’s get this straight, rather than GM paying this loan off with monies it earned from the selling of automobiles and thereby being profitable, it used a government controlled TARP slush fund to repay a bailout loan of TARP money. Essentially, they took from one pot of TARP money and put it in another pot of TARP money to pay it off – WHAT.

Where does a person sign up to get that deal? Imagine how easy it would be to pay taxes if this held true for everyone!

Once again it looks like truth in advertising has no affect on the GM and their new advertising; nor is there any truth with senior government officials who called the repaying of these loans (with government money) a major achievement for GM and for the nation.

America owes a big thank you to Mr. Barofsky for his diligent service and honest reporting.

Still driving a Ford,
Bill

Government Creating Competition?

The last week Goldman Sachs reported a better-than-forecasted second quarter earnings and now able to repay the bailout money. Something that should make every U. S. tax payer feels better about the current economy. But wait, even Goldman Sachs admits that much of their success is due to less competition in the marketplace.

Goldman Sachs CFO, David Viniar, called it a “fragmented competitive environment” and went on to say that fragmentation came from the failure of its two main competitors; Bear Stearns and Lehman Brothers, while the others were either bought out, failing or in some sort of reformation process, with government help.

It is important to point out that at the time Goldman Sachs received its bailout money the former Treasury Secretary who issued the bailout also happened to be the former Goldman Sachs CEO. Is that why Bear Stearns and Lehman Brothers received no government bailout money, they had no big government connections?

What is the point of all of this? Well, before everyone gets excited with the possibility of an economic upswing based on the performance of the bailout gang, remember, a major part of their success is driven by less competition. A situation controlled by federal government involvement.

Look Out Ford,
Bill

Chrysler

So after all the bailout money given to Chrysler, President Obama guaranteeing Chrysler’s warrantees on their vehicles, concessions by the UAW, a major ownership stake given to the UAW, a buyout by Fiat and concessions by many of their creditors; Chrysler still filed for Bankruptcy.

I wonder where they would be right now had they just filed a few months back before they had taken all the bailout money, the bite in the rear from the UAW, and given up their independence to an organization like Fiat. I mean come on, have you ever driven a Fiat? I would rather have one of those nasty old “K” cars than a Fiat.

I know that bankruptcy is bad, but worse is bankruptcy and all the strings that are now attached by the government, the UAW and Fiat.

I’ll be on the Ford Lot,
Bill