The GM Bailout, What’s a $10.5 Billion Fleecing Between Friends!?

Mandeville, LA – Exclusive Transcript – “The story is “The taxpayer loss on the GM bailout is $10.5 billion,” mere chump change, I know, when we’re talking about budget deficits of $1.5 trillion three years ago and $700 billion this year.  What’s $10.5 billion between friends, right? ”  Check out today’s transcript for the rest… Begin Mike Church Show Transcript Mike:  Here’s the headline, “Government sells last of its GM shares.”  Folks, this is just one of these things that pains me.  It just pains me to have read last night.  If you don’t know what the story is, back in 2009, General Motors got a bailout.  They got a bailout because there were people out there wringing their hands and gnashing their teeth and saying: If we don’t bail GM out, it’s going to cost millions of jobs.  All that equipment and machinery is all going to go to waste.  We’re going to lose our manufacturing capacity, and all these other dire predictions of calamity which have nothing to do with actual economic or financial action, or what Ludwig Von Mises called human action.

Is General Motors a member to the UN?  Is General Motors a member to any international treaty of sovereign nations?  It doesn’t have any of the trappings, any of the identifiers that would make it a sovereign country, yet it seems to be treated as one.

We were basically extorted into this.  All too many people supported this.  There was opposition to the bailout, but it didn’t matter because Congress already had its mind made up.  President Bush had begun this.  President Obama was only too happy to continue it.  After all is said and done, this is just — I don’t know any other way to put this.  This may be the largest officially-recorded theft in the history of officially-recorded thefts.  The publicly-traded corporation known as General Motors, which, last I checked, is not a functionary of the United States government, was never brought about by the United States government, doesn’t act as an agency, although it may as well act as an agency of the United States government.  Is General Motors a member to the UN?  Is General Motors a member to any international treaty of sovereign nations?  It doesn’t have any of the trappings, any of the identifiers that would make it a sovereign country, yet it seems to be treated as one. For the pleasure of having Government Motors continue its wasteful business practices here in the United States, it cost you and me $10.5 billion.  That’s the end result.  That’s the final tally.  We were told we had to do this because, [mocking] “Millions of people are going to be unemployed.”  I gave you some of the scenario earlier today.  How many are going to be unemployed or underemployed now that $10.5 billion has been sucked out of the real economy and laundered into the coffers of General Motors and the United Auto Workers?  Doesn’t that cause a distortion in the market?  Doesn’t that cause similar unemployment to happen?  You bet it does.  You going to hear any of that from Mark Zandi?  You going to hear any of that from Tom Friedman or Paul Krugman?  You going to hear any of that from any of the yahoos on CNBC, other than Rick Santelli maybe?  Doubtful.

So $10.5 billion was transferred from you and me into the bank accounts of General Motors and the United Auto Workers.  I guess we’re supposed to be happy about that because by gum, jiminy Christmas, GM’s made a comeback.  They’re not Government Motors anymore.  This story even has smackdowns of people that called GM Government Motors.  There’s one guy they quote in here saying, [mocking] “Well, the people that call it Government Motors, they weren’t gonna buy a GM car anyway.”  How do you know?  How do you know? You want me to tell you what the great irony of all this is?  [mocking] “Yeah, but we had to save American car manufacturing.”  American car manufacturing is doing great.  You ever heard of Kia?  [mocking] “Yeah, but that’s a Korean company.”  They’re made in Georgia.  You ever heard of Toyota?  [mocking] “Yeah, but that’s a Japanese company.”  They’re made in Texas.  You ever heard of Honda?  They’re made in Mississippi.  You ever heard of Mercedes Benz?  They’re made in Alabama.  You ever heard of BMW?  Made in South Carolina.  All across the South, factories dot the interstates.  They dot the interstates because it’s one of the easiest ways to get the raw materials in and out of places where the cars are manufactured. I just ticked off a list here of auto manufacturers that are doing great, bang-up business. They have all the tooling and machinery that is needed to continue the “great tradition of American industrial manufacturing.”  They didn’t get bailouts.  They’re not going to get a bailout.  Yet they’re all still profitable.  Not only are they profitable, but they also employ millions upon millions of people.  I just happen to know some that run a Kia dealership in the great city of Athens, Georgia.  I can tell you that those people like the cars they make, like the cars they sell, they stand by them, and they know that those cars are made right down the road in Georgia.  Yet to read stories like this, if we didn’t save Detroit, no manufacturer would ever make a car in the United States ever again.  Really?  Another case of hyperbole winning out over reality. The story is “The taxpayer loss on the GM bailout is $10.5 billion,” mere chump change, I know, when we’re talking about budget deficits of $1.5 trillion three years ago and $700 billion this year.  What’s $10.5 billion between friends, right?  “The Treasury sold the last of its remaining 31.1 million GM shares today. It started with 500 million shares in 2010.”  Even after all that, and even after GM is trading at a record high, there’s still $10.5 billion in losses.  Of course, they have reports out there that run these fictitious numbers that say, [mocking] “You don’t understand, it saved 1.2 million jobs.”  Well, if you operate your economic numbers in a vacuum, I suppose you’d be able to say it saved even more than 1.2 million jobs, but economics don’t operate in a vacuum.

Does anyone really think that an opportunistic manufacturer of other automobiles or of other brands of automobiles would not have purchased the machinery and tooling that was available at the General Motors plants if they actually were forced to liquidate?  Here’s an even better question: If they were forced to liquidate and forced to go through a bankruptcy the way the rest of us have to, wouldn’t they come out on the other side with less debt and less overhead?  Wouldn’t that then mean that we would all save money on future cars manufactured by General Motors?  The way I read and the way I think and the way many Austrian economists think, yes, that would have been the result.  In other words, the purge would have been good.  [mocking] “Yeah, but it wouldn’t have been good for the UAW.”  Yeah, but the UAW right now is operating on the false premise that the well of the American sheeple’s generosity or capability to endure plunder is inexhaustible.  In other words, we’ll continue to support these bailouts because we want American car manufacturing.  Again, they have American car manufacturing that’s not being subsidized and is doing quite well all across the South. End Mike Church Show Transcript

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