"He saved the American auto industry"

I keep hearing about how Obama saved the US auto industry and I don’t understand why this is going unchallenged. FIrst off, by “US auto industry” they must not mean Ford, and it does include a majority foreign owned company. And by “saved” they mean that GM and Chrysler were prevented from going through the regular bankruptcy process. This companies were never in danger of disappearing altogether. How many airlines have gone through bankruptcy? Answer: all of them save Southwest. There isn’t any reason to think that GM would have gone away. What happened instead was that the Obama administration jumped in and did things their way. What happened? Bondholders like pensions, mutual funds (which are common 401k investments) hedge funds, and any other retail investor got 5 cents on the dollar despite the fact that they should have been first in line for compensation. The government ended up getting around 87 cents on the dollar and the UAW got about 76 cents on the dollar.

This was a pure political play. Right now the government is sitting on 10 billion dollars of GM stock and is currently sitting on a stock loss of about 16 billion. That’s a cool $26 billion all in order to secure UAW, and by extension unions in general, votes. That’s just at GM. Any job can be saved if you through enough money at it. It would have been far cheaper to simply mail a check to the people that lost their jobs via regular bankruptcy hearings and much more equitable.

Funnily enough, I don’t like the fact that taxpayers are out 26 billion and Obama spinning it as a success. The fact that it is trumpeted as a reason to vote for him makes my head spin.

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