The truth about GM’s payback

Have you seen the ads in which General Motors says that they paid back the government bailout money?  Well, George Will says that this is not exactly correct:

A television commercial featuring CEO Ed Whitacre demonstrates the institutional murkiness and intellectual dishonesty that result when the line between public and private sectors disappears.

In the commercial, Whitacre says GM has “repaid our government loan in full.” Rep. Paul Ryan (R-Wis.) noted that GM used government funds to pay back the government: It “simply transferred $6.7 billion from one taxpayer-funded TARP account to another.” The government still owns 60.8 percent of GM’s common equity, and the Congressional Budget Office projects that the government will lose about $34 billion of the $82 billion of TARP funds disbursed to the automotive industry.

When Ryan and two colleagues asked the Treasury Department for clarification, they got this careful reply: “Treasury has never suggested that the loan repayment represented a full return of all government assistance.” A Treasury news release did say “GM Repays Treasury Loan in Full.” The loan is, however, a small part of taxpayer exposure. Under crony capitalism, when government and corporate America merge, both dissemble.

via George F. Will – Greece and GM: Too weak to fail.

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • Winston Smith

    From each according to his ability, to each according to his need. From one of Uncle Sam’s pockets to the other.

  • Winston Smith

    From each according to his ability, to each according to his need. From one of Uncle Sam’s pockets to the other.

  • trotk

    Treasury has never suggested that the loan repayment represented a full return of all government assistance.

    Can I treat my mortgage this way?

  • trotk

    Treasury has never suggested that the loan repayment represented a full return of all government assistance.

    Can I treat my mortgage this way?

  • colliebear56

    I think the key words are “repay” (Whitacre) and “return” (U.S. Treasury statement). GM simply returned borrowed funds that were set apart in an escrow account.

    Spinning it, as Whitacre does in the commercial, as repayment is a stretch, maybe even a lie.

  • colliebear56

    I think the key words are “repay” (Whitacre) and “return” (U.S. Treasury statement). GM simply returned borrowed funds that were set apart in an escrow account.

    Spinning it, as Whitacre does in the commercial, as repayment is a stretch, maybe even a lie.

  • http://www.christlutheran.net Jeff Samelson

    I would take some issue with George Will’s calling this “crony capitalism”. This isn’t capitalism. It’s more like corporatism, of the statist or progressive kind — or maybe even another political-economic philosophy that became quite significant in 20th-century Europe, and seems to making a resurgence today.

  • http://www.christlutheran.net Jeff Samelson

    I would take some issue with George Will’s calling this “crony capitalism”. This isn’t capitalism. It’s more like corporatism, of the statist or progressive kind — or maybe even another political-economic philosophy that became quite significant in 20th-century Europe, and seems to making a resurgence today.

  • Joe

    This is a pretty good summation of what actually happened:

  • Joe

    This is a pretty good summation of what actually happened:

  • SAL

    This shouldn’t be surprising.

    The beneficiary of an unrestrained central government is often big business. This occurred in Spain, Germany, Argentina and other fascist states.

    The welfare state can even be used like Bismarck did to get the lower classes to more freely surrender unlimited authority to a central government.

  • SAL

    This shouldn’t be surprising.

    The beneficiary of an unrestrained central government is often big business. This occurred in Spain, Germany, Argentina and other fascist states.

    The welfare state can even be used like Bismarck did to get the lower classes to more freely surrender unlimited authority to a central government.


CLOSE | X

HIDE | X