Below is my statement released today on the government’s planned 15-month sale of its remaining General Motors stock:
On Wednesday, the government announced a plan to sell its remaining stake in General Motors at an estimated loss to taxpayers of $12 billion. If the losses on General Motors Acceptance Corporation (GMAC) are included, the total probably rises to nearly $20 billion.
It is good news the government is winding down its misguided involvement in Government Motors. It has announced an 15-month plan to divest its stock. It also is good news the auto industry is expanding – though most of the growth has been enjoyed by foreign automakers who have built plants in right-to-work Southern states and had nothing to do with the bailout.
But there is nothing new or remarkable about businesses showing signs of improvement thanks to massive infusions of public dollars. We will never know how many small businesses may have survived, expanded or moved into more profitable lines of business had the government pursued a more pro-growth alternative to this massive government bailout. We hear a lot about jobs allegedly “saved or created” by this bailout. But in reality, we will never know how much farther along the road to recovery we might be if we had foregone this “investment” and lowered tax rates so entrepreneurs could invest, grow and hire.
What we do know is it is long past time for the Obama administration to stop meddling in this or any other industry. We know its meddling – such as the Corporate Average Fuel Economy Standards – will harm GM’s top-selling Buicks, Cadillacs, and trucks and lighter vehicles and more vehicle deaths. We know that after the bailout, GM added less than 10,000 net new jobs, and that the bailout perhaps indirectly destroyed as many as 100,000 mostly blue-collar jobs through the administration’s insistence on rapid closures of auto dealerships. We do know the administration’s policies in Michigan favored the United Auto Workers over bondholders, stockholders – including the American people – employees and others.
And we do know, once and for all, this is not the path to economic recovery.
For more on the auto bailout’s costs to taxpayers, investors, shuttered auto dealers, and non-union workers, readers can view these articles by me and this by my CEI colleagues Matt Patterson and Crissy Brown.