Government Motors is still a disaster for American taxpayers

GM’s stock has lost 45 percent since the government’s IPO 19 months ago

President Obama keeps touting the government takeover of General Motors as one of his big successes. If this is success, what would failure look like?

On the day of the government’s initial public offering on November 18, 2010, the price of GM’s stock was $35.

It hit a high of $38.98 on January 7, 2011. And it’s been down hill ever since.

GM’s stock price as of this writing $19.57 a share — a drop of 45% since it’s IPO 19 months ago.

Government Motors says it’s turning a profit, but it would be tough not to when $65 billion in taxpayer bailout money hits your bank account.

GM stock would have to go up to $55 for taxpayers to get their money back.

Obama says the bailout was worth it because it saved the jobs of 80,000 GM employees.

But that assumes these jobs would have been lost if GM had gone through the normal bankruptcy process, similar to what happened with United airlines.  As with United, most (if not all) of GM’s employees most likely would have kept their jobs. Henry Ford and Walt Disney declared bankruptcy to no long-term ill-effect. Donald Trump went through bankruptcy twice.

He’s doing just fine.

Bankruptcy is not the end. It’s often a new beginning for a corporation.

The purpose of bankruptcy is not to destroy companies, but to allow companies to survive by restructuring their debt and giving them time to reorganize. Often companies come out of bankruptcy stronger and leaner.

Had the government allowed GM to go through the normal  bankruptcy process, it could have gotten rid of its union contracts.  Ford accepted no bailout money and is doing better than GM.

If GM had gone through a normal bankruptcy, GM’s bondholders would not have gotten robbed, as they did by Obama, Hugo Chavez-style. And many GM dealerships could have remained in business.

Inexplicably, Obama forced 2400 GM dealerships to close, many of them profitable, eliminating tens of thousands of jobs.

And Obama is attacking Romney over Bain Capital?!

The whiff of hypocrisy is pungent here.

Obama was determined to hand control of GM over to the labor unions, no matter what — because that’s who Obama is.

But this prevented the normal reforms and restructuring that market pressures and bankruptcy proceedings impose on companies. Instead of being a leaner, more efficient company, GM remains as bloated as ever, with its crazy union contracts still in place, even worse than before.

If, after bankruptcy, GM was unable to solve its problems, its assets would have been sold off — most likely to other car companies who were better at running the business.  The factories would not be left idle. They’d just be under new ownership and management, humming along just fine, making cars more efficiently and profitably — most likely without any labor union contracts.

But Obama doesn’t trust markets. He trusts government. He saw GM as a giant slush fund to be used to pay off his Big Labor supporters.

GM’s quality, of course,  is today exactly what you’d expect from a company that’s owned by the government and the labor unions.

The Obama Volt is a total disaster by every rational measure. GM suspended production of the Volt because they were only selling about 800 units per month. They can’t give these things away, though they’re certainly trying.

ObamaCar is about as popular as ObamaCare.

The government actually pays you to buy an Obama Volt. You’ll get an $7,500 tax credit for buying one. And GM is selling them for less than the cost of production, thanks to all the government subsidies it receives.

But people still don’t want them.

The problem is, the Obama Volt only gets 40 miles per charge of the battery.  That doesn’t even allow you to run your Saturday morning errands.

Plus the battery, which takes up much of the back seat, sometimes explodes and burns down the garage.

GM is now recalling 420,000 Chevy Cruz’s because a design flaw apparently causes the engine to catch fire. There’s also a problem with fuel tanks springing leaks.

This is what happens when you have a car company that’s run by Obama instead of by people who know the car-making business.

What would the iPad be like if it were designed by Obama instead of by Steve Jobs and his team?

Well, actually there would be no iPad.  Nor would there be any iPhone, iPod, iMac, iTunes, or iAnything.  We’d be lucky to have the Osborne if we had to rely on Obama to design our computers.  More likely, we wouldn’t have computers at all. And we’d have to rely on two cans connected by string for our phones.

Now that the government is in charge of health care, expect all medical innovation to stop — no more life-extending medicines and treatments.

If anything, expect Soviet-style medical regress instead of progress with the government now in charge.  Soon, you’ll have to wait months just to get in to see your doctor or to have an MRI.  And government rationing boards will decide if it’s worth approving the medical treatment you need — an approval (or denial)  process that will take months, maybe years.

Obama is stuck in the 1930s.  He doesn’t understand capitalism or the modern world.  He doesn’t understand how new products and technologies emerge.

He seems to think the path to prosperity is to run the economy like the U.S. Postal Service — which was set up in the 19th Century.

So now we have cars from GM that are a lot like what we might expect the U.S. Postal Service to make for us.

Soon we’ll have health care delivered by the equivalent of the U.S. Postal Service.  At least one Democrat U.S. Representative (Jan Schakowsky) is calling for unionizing doctors.

Won’t that just be wonderful? Doctors who can’t lose their jobs no matter how incompetent. Theodoric of York, call your office.

Communist China woke up — found out that capitalism is what generates wealth and economic progress.  The Chinese are aghast at Obama’s ignorance of basic economics.

Obama really would do himself a favor by reading Adam Smith’s WEALTH OF NATIONS, F.A. Hayek’s ROAD TO SERFDOM, or Milton Friedman’s FREE TO CHOOSE  – at least get some basic understanding of Economics 101.

Investors have concluded that GM is a total disaster.

That’s why it’s stock price has dropped 45 percent since the Obama’s IPO for GM just 19 months ago.  But Obama is living in an alternate universe. Obama thinks his takeover of GM has worked out just great.

The Obama Volt, Solyndra, and ObamaCare are perfect illustrations of who Obama is and what he’d love to do for every area of American society if he gets a second term.

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