My eyebrow rose last week when I read that GM CEO Ed Whitacre's Wall Street Journal op-ed was titled "The GM Bailout: Paid Back in Full." This isn't true--GM may have paid off loans from the federal government, but the Treasury is still GM's majority shareholder, at a cost of about $50 billion. That money won't be recouped (at a probable loss) until GM goes public. Wall Street Journal headline writers: The GM bailout is not paid back!
Then I saw Whitacre make the same claim in this new ad, and I really lost it:
If Sarah Palin told a propagandistic whopper this big she'd be doing run back up to Wasilla by the press. ... It looks like, once the Obama administration realized GM was still in such bad shape there was no hope of pursuing Plan A--a public offering of stock to recoup at least some of the $50 billion capital bailout--they resorted to Plan B--a coordinated hype campaign to act as if the relatively puny $6.7 billion payback was the $50 billion. Larry Summers' credibility was dragged into the cesspool of PR scamming! ... Kausfiles calls on Summers to repudiate Whitacre's op-ed, lest his post-administration stature sink to Orszagesque levels. ... P.S.: GM really must be desperate for a way to counter resistance from bailophobic consumers if it has to blatantly jump the gun on claiming 'payback' like this. Whitacre's announcement is itself a sign, not of turnaround, but of GM's continuing weakness. ... P.P.S.: You might think the problem was only an overzealous and underinformed WSJ headline writer. But the final paragraph of Whitacre's piece--"Nobody was happy that GM needed government loans ..."--makes it clear Whitacre wants readers to confuse the loans with the entire bailout. ... [viaInstapundit]
Update: After the bailout, GM and Chrysler made "few changes to [their] pension plans," which are of the "defined benefit" variety, according to the Government Accountability Office. As a result, taxpayers may have to shore them up with another $10+ billion. ... 10:18 A.M.
Kaus links to a Shikha Dalmia column you can read here.
In his weekly address, the president proudly announces that the "investments" the Treasury made in the banks and autos in 2008 and 2009 will be paid off at a fraction of the estimated cost. That's swell, but Obama's rhetoric not only ignores the losses from AIG and Fannie and Freddie, he also assumes the money should have been "invested" in the first place. In my opinion, TARP was necessary in the emergency circumstances surrounding the Lehman Crisis. But I'm still waiting for an explanation of what made Detroit so special--other than the power of Big Labor.