The Wall Street Journal has an article (which can be found here – subscription may be required) that reports on President Obama’s statement that the auto bailout was a success. The President says:
If we had done nothing, not only were your jobs gone, but supplier jobs were gone and dealership jobs were gone, and the communities that depend on them would have been wiped out.
This statement is simply nonsense. Recall that in the early 1980’s Chrysler was on its last legs. It got a federal loan, but went through bankruptcy. Bondholders took a haircut, but the shareholder (aka owner) wasn’t displaced. With the release of the K Car, Chrysler went on a pretty good run of success. Move forward 30 years, and the overall economics of the auto industry, the credit bubble, and the tough global competition forced Chrysler into the need of another restructuring. Bankruptcy would have worked all over again. But the President had a different plan: spread the wealth.
The end result of the President’s takeover has been to scare the dickens out of every other business, company, and entrepreneur in the country. As previously reported on this blog, those same businesses, companies, and entrepreneurs are now hoarding cash and slashing costs (aka payrolls) due to the fear that the President and his minions will raid their companies, too, should the opportunity present itself.
Instead of saving jobs, the President’s policy has led to the greatest loss of jobs in decades. I don’t expect him to admit his mistake – in politics that is bad form. However, he could do the next best thing which would be to keep quiet about the failure of his policies.