The bailout made a 15 billion profit

I could have made a $15 billion profit, too, if I printed my own money.

The problem with the bailout is that it turned 225 years of bankruptcy law on its ear. Normally, Debt holders get paid before Equity Holders receive anything in a bankruptcy reorganization. In GM and Chrysler, the labor unions held equity in the company, received as part of a collective bargaining agreement. To appease those Union Members, the reorganization plan gave these holders of equity new equity in the reorganized companies. Several categories of bond holders did not get this reward, I suppose because they were demonized as millionaires and billionaires. So, if you own a bond fund, or a pension, you undoubtedly got screwed-and your money was taken by the UAW.

Morally bankrupt wrote:

The problem with the bailout is that it turned 225 years of bankruptcy law on its ear. ...

GM would not have survived a normal bankruptcy.

relatedly, remember Solyndra? That too was a big deal in the 2012 election. Romney mocked it and the whole idea of the gov't investing in technology. Sure solyndra went belly up, but right now the investments the gov't has made under the program are profitable.

I'm not sure I think gov't should be doing this, but so far it looks like gov't has done a great job.

So another election issue that the GOP got wrong.

http://www.npr.org/2014/11/13/363572151/after-solyndra-loss-u-s-energy-loan-program-turning-a-profit

In 2011, solar panel company Solyndra defaulted on a $535 million loan guaranteed by the Department of Energy. The agency had a few other high-profile bankruptcies, too — electric car company Fisker and solar company Abound among them. But now that loan program has started turning a profit.

Overall, the agency has loaned $34.2 billion to a variety of businesses, under a program designed to speed up development of clean-energy technology. Companies have defaulted on $780 million of that — a loss rate of 2.28 percent. The agency also has collected $810 million in interest payments, putting the program $30 million in the black.

tea partee was wrong wrote:

Yet again the tea party was wrong, the republican party was wrong and the right was wrong

Not only did the bailout save the auto industry, save housing sector , save banks and save jobs, it actually earned the treasury 15 billion

http://money.cnn.com/2014/12/19/news/companies/government-bailouts-end/

Pointless and cluess sabre rattling by the tea party opposed the bailout. Infact the tea party was created out of opposition to the bailout.

If GM and Chrysler had gone under, it would have cost an estimated $39 billion to $105 billion in lost tax revenues as well as assistance to the unemployed, according to a study from the Center for Auto Research. And the government also would have been on the hook for billions in promised pension payments to autoworker

And this is why Romney was not elected. The public saw how clueless he was.

tell me...what president pushed the bailout through congress?

you are implying that it is wrong to say the GOP was critical of the bailouts and therefore wrong now that they seem to have worked out well, more or less.

Well really - you think that is a fair criticism? While you are technically correct that Bush 2 pushed them through congress..really....the 2012 election was partly framed by GOP saying the bailouts were yet another example of gov't overreach. I think it is completely fair to say that the GOP as a whole opposed or opposes the bailouts.

Probably if you polled GOPers they would say that the bailouts had actually lost billions rather than made billions. You know, because Fox news.

agip wrote:

relatedly, remember Solyndra?

You mean the company that swindled the government out of millions of dollars? Yes, it is a great success story. Accounting fraud pays, kids.

Absolutely, there is more than one way to achieve essentially the same result. The other point I would make is that since Dems want to saddle Bush with the 2009 $1.5 trillion dollar deficit, he should get credit for what that money did. They bulk of the auto bailout funds flowed under his pen in the fall of 2008. Ditto with much of the financial sector bailout money. The difference Romney would have made would be that he would have put conditions in place so that billions of wall street bonuses would not have been paid out to executives of companies that lost money.

Standard Bearer wrote:

The difference Romney would have made would be that he would have put conditions in place so that billions of wall street bonuses would not have been paid out to executives of companies that lost money.

are you making that up or did Romney say that? Cause it doesn't sound very romneyesque

The OP makes a fatal flaw in his analysis - he/she assumes that without the bailout GM would have gone under, aka been liquidated. The more likely outcome of a PROPER GM bankruptcy filing would have been simply a reorganization of the company into a leaner, more efficient operation.

In other words, any profit made by GM recently would still have been made without the bailout. In fact, without the bailout GM2.0 would probably be making more profit than they are now.

Thus, the bailout was a complete waste of taxpayers' money.

How stupid are leftists? wrote:

The OP makes a fatal flaw in his analysis - he/she assumes that without the bailout GM would have gone under, aka been liquidated. The more likely outcome of a PROPER GM bankruptcy filing would have been simply a reorganization of the company into a leaner, more efficient operation.

In other words, any profit made by GM recently would still have been made without the bailout. In fact, without the bailout GM2.0 would probably be making more profit than they are now.

Thus, the bailout was a complete waste of taxpayers' money.

well maybe. or maybe not. You don't know - your devotion to theory leads whatever you say and think.

Fact is, on the ground, the auto bailouts worked. It was a time of utter crisis, the gov't took actions that worked. That's enough for me.

At the expense of all those that went bankrupt or lost 2/3rds of their pension, not to mention some that committed suicide as they saw their lifetime of work go down the drain.

how theoretical are rightists? wrote:

How stupid are leftists? wrote:

The OP makes a fatal flaw in his analysis - he/she assumes that without the bailout GM would have gone under, aka been liquidated. The more likely outcome of a PROPER GM bankruptcy filing would have been simply a reorganization of the company into a leaner, more efficient operation.

In other words, any profit made by GM recently would still have been made without the bailout. In fact, without the bailout GM2.0 would probably be making more profit than they are now.

Thus, the bailout was a complete waste of taxpayers' money.

well maybe. or maybe not. You don't know - your devotion to theory leads whatever you say and think.

Fact is, on the ground, the auto bailouts worked. It was a time of utter crisis, the gov't took actions that worked. That's enough for me.

And yet your side clings to the notion that GM "wouldn't be here today" if not for the bailouts. Talk about devotion to theory!

If you actually take the time to look back through corporate history, most large companies that file for Chapter 11 bankruptcy emerge as newer, leaner companies. Do you really think in your wildest neurotic episodes that any judge would have approved of a GM liquidation?

As it is, the pointless GM bailout did not adhere to this little thing we call The Rule Of Law. There are 6 basic types of legal bankrupcty proceedings, and the pointless GM bailout did not adhere to any of them. It was and still is lawless. All the ILLEGAL government intervention did was to STEAL the rightful claim to the reorganized company from the bondholders and REDISTRIBUTE that claim to the very people who facilitated GM's failure in the first place, aka the UAW.

If that's truly good enough for you, then I suspect you'll have no problem when someone robs you of your rightful claims sometime in the future, huh?

the legality of the gm bailout is unclear. You are wrong to say so clearly that it was illegal. Many constitutional scholars think it was in fact legal. So that upsets your argument.

I'd say that in times of legal ambiguity we have to look to what actually worked rather than a theoretical 'well this would have been better'

here are some links to the controversy:

concerned office worker wrote:

$15B is a drop in the bucket.

Would aggregate auto demand have dried up if GM had gone under? A little maybe hut people would just start building other makes and those factories/workers would be employed by Toyota now.

They same liberal simple-think on economic policy is why we have diverging income and wealth disparity in this country. They need to look further down the road at secondary and tertiary effects. And embrace failure - it is part of what makes the system work.

You are correct, $15B is not significant relative to the overall GDP; the most important question is what would the cost have been if we choose to do nothing. Btw, I would not call $15B insignificant especially when FoxNews continuously points out mistakes like Selendra with cost a couple millions.