Can critics of GM bailout issue a recall of their predictions?

Eighteen months after the Obama administration launched a taxpayer-funded rescue of General Motors, the company is reporting earnings so far this year of $4.8 billion, which means it is outperforming Toyota.

And on Thursday, for the first time, the new General Motors will offer stock for sale by private investors. Wall Street seems eager to have the opportunity. Experts predict the stock will sell well, and demand is so high that this week the company boosted the estimated price range of its stock from $26-$29 to $32-$33.

In the late spring and early summer of 2009, conservative critics were citing the bailout as proof that Obama was taking us “down the road to socialism,” as U.S. Sen. Richard Shelby put it. Yet after this week’s IPO, the federal government will no longer be GM’s majority owner, and government officials are debating whether to shed the remainder of GM’s stock relatively quickly or sell it more slowly, allowing it to increase in value and perhaps even turn a profit for taxpayers.

Critics were also pretty damn certain that the attempted bailout was doomed to fail, that the administration’s effort to save an estimated million jobs could not work and would only end up costing the taxpayers tens of billions of dollars.

In fact, for old times sake, let’s go back and review just a smattering of those predictions, shall we?

“Does anyone really believe that politicians and bureaucrats in Washington can successfully steer a multinational corporation to economic viability?”

– U.S. Rep. John Boehner, R-Ohio

“Every dollar spent with GM is a dollar spent against free enterprise.”

– talk-show host Hugh Hewitt

“Now the government has forced taxpayers to buy these failing companies without any plausible plan for profitability. Does anyone think the same government that plans to double the national debt in five years will turn GM around in the same time?”

– U.S. Sen. Jim DeMint, R-S.C.

“The people saying they don’t want to buy anything at General Motors are not mad at General Motors. They don’t want to patronize Obama. They don’t want to do anything to make Obama’s policies work! This is an untold story, by the way. Of course, the government-controlled media is not gonna report anything like this but there are a lot of people who are not going to buy from Chrysler or General Motors as long as it is perceived Barack Obama is running it, because people do not want his policy to work here because this is antithetical to the American economic way of life.”

– talk-show host Rush Limbaugh

“You’ve got government bureaucrats who are making decisions about what kind of car models are going to be produced, which plants are to be closed and how many dealerships to eliminate. You have in effect central planning of this industry. Karl Marx must be smiling today. We’ve never seen this level of government control of the economy in peace time history.”

– Phil Kerpen, policy director, Americans for Prosperity

“We’ll continue to make the case that President Obama and House Democrats want to do to America’s health care system what they have done to General Motors. Having to defend such drastic government intervention paid for with reckless spending and bailouts is not an enviable position for many of these Democrats to be in next year.”

– Paul Lindsay, spokesman for the National Republican Congressional Committee

“Unfortunately, this is just another sad chapter in President Obama’s eager campaign to interject his administration in the private sector’s business dealings…. We have seen time and again that when the government attempts to set business practices for private corporations, it ends in spectacular failure. It is time to stop circumventing both the markets and the legal process.”

– U.S. Rep. Tom Price, R-Ga.

“I see no hope whatsoever for the situation. I think the $50 billion might as well be kissed goodbye. I would expect that this is just the beginning.”

– conservative policy consultant Wendell Cox

“I think the long-term outcome will be the same. It’s unlikely to ever recover the huge investment that’s been made in it, and you will then be carrying this forever and ever and ever.”

– Ronald Utt, senior research fellow at the Heritage Foundation

713 comments Add your comment

Scout

November 16th, 2010
1:55 pm

Jay:

I would give a week’s pay to see you debate everyone of the above ……… one at a time.

Hillbilly Deluxe

November 16th, 2010
1:57 pm

It would be a good thing, if GM succeeds. However, having spent quite a few years in GM dealerships and having friends who still do, I’ll have to see it to believe it. They still have the same internal upper management mindset, that they’ve had for 20-30 years. Every 2-3 years, while I was there, they always had a shake-up, followed by a “we’ve seen the light” speech, and then went right back to doing things the way they had before.

Jay

November 16th, 2010
1:58 pm

You set it up, I’ll be there, Scout.

Limbaugh in particular. Note that he never puts himself in a situation where he can actually be challenged on the nonsense he spouts?

All bluster and BS.

Mary Elizabeth

November 16th, 2010
2:06 pm

Please read my 2:00 p.m. posting in the downstairs thread. Thank you.

Normal

November 16th, 2010
2:07 pm

Off topic, but could this be the reason there are so many abortions?

http://www.msnbc.msn.com/id/40201197/ns/health-health_care/

TaxPayer

November 16th, 2010
2:08 pm

If it were not for bluster and BS, what would a Limbaugh or Price or Boehner, et al, have? Their faithful followers such as the Scout, of course.

Normal

November 16th, 2010
2:10 pm

I’m a Ford man so I don’t care. :D

Matti

November 16th, 2010
2:11 pm

Mary Elizabeth,

I did. Good post! You failed to mention that many Republicans who vocally and frequently oppose gubmint handouts are themselves recipients. From CBS news:

GOP Rep. Michele Bachmann of Minnesota, an outspoken critic of farm payments, listed between $15,000 and $50,000 in farm income as one source of revenue on her personal financial disclosure statement last year, citing a Bachmann family farm in Independence, Wis., as an asset.

That farm, which was owned by her father-in-law, received more than $250,000 in subsidies over the past 15 years, according to the Environmental Working Group. A Bachmann spokesman said she is not involved in any operational decisions.

South Dakota Republican Kristi Noem, who ousted Democratic Rep. Stephanie Herseth Sandlin, had partial ownership in a ranch that received more than $3 million in subsidies over 15 years, though her family bought her out last year.

Farmer and gospel singer Stephen Fincher won an open seat House race in Tennessee this year while both railing against federal spending and deflecting criticism that his family had received $3.2 million in federal farm subsidies in the past 10 years.

But hey, according to them, if you’re unemployed because your job (and all the others in your community) went away, and you need a few more weeks of UE checks in order to feed your children and keep a roof over their heads, you’re what’s wrong with America.

Ragnar Danneskjöld

November 16th, 2010
2:12 pm

When the $65 billion yet unrepaid by GM gets back to the public treasury, you will have a valid argument against the statement of Wendell Cox, whoever he is. The truth of the other statements is yet unrebutted.

Harry Callahan

November 16th, 2010
2:13 pm

Gee Jay…looks like the Associated Press has a somewhat different view…

Investors may sit out GM’s IPO
by Sharon Silke Carty
Associated Press Writer November 15, 2010 12:00 AM

DETROIT – General Motors executives are playing up three bright spots in the company’s future as they try to persuade investors to buy GM stock: A better lineup of cars and trucks, potential for global growth and a new cost structure that enables the company to make money even when the economy dips.

GM emerged from a government-organized bankruptcy just 16 months ago, a process the company says has made it stronger and healthier. The reorganization erased debt and lowered labor costs. It also removed $27 billion from the wallets of bondholders and left stockholders with nothing. Taxpayers spent more than $50 billion to save GM from ruin between December 2008 and July 2009 and are not expected to get all their money back.

Even with an IPO, GM is still ‘government motors.’

You might find the nickname clever, but inside the company, it’s an embarrassment and the driving force behind the decision to hold the IPO as early as possible. GM wants the government to sell off its shares.

“We want the government out. Period,” Chairman Ed Whitacre said this summer. But the IPO process will be more like a drawn-out divorce between GM and taxpayers. This stock offering will only reduce the government’s stake in GM from 61 percent to 43 percent. It will take more stock offerings, staggered over the next few years, before the U.S. government is out of the car business.

For shareholders, that means GM may not always put investors first. Political priorities may trump their demands. Some worry GM will spend too much time and use too many resources working on small cars or electric cars and not enough on profitable vehicle lines like trucks and SUVs.

The stock offering “is entirely cosmetic,” says Logan Robinson, a law professor at the University of Detroit Mercy who has worked as legal counsel at Chrysler and automotive supplier Delphi. “The government is absolutely going to call the shots, even if they are below 50 percent.”

Before handing over bailout cash, a task force convened by President Barack Obama wrote in contract provisions forcing GM to use the money in ways the government approved. Some of those provisions, including executive compensation and U.S. production levels, are locked in until 2014.

Even if the Treasury were to sell every share it owns in GM, its influence and power would remain. The top two executives, Whitacre and CEO Dan Akerson, were picked by the government. Three other directors, David Bonderman, Robert Krebs and Patricia Russo, were also chosen by the government to sit on the 13-member board.

“Where do these board members’ and executives’ priorities lie – is it with the administration, or is it with the shareholders?” asks Linda Killian, founder of Renaissance Capital, which analyzes and invests in IPOs. That question is “sitting there like an 800-pound gorilla, holding stock.”
Copyright 2010 The Marietta Daily Journal. All rights reserved.

DannyX

November 16th, 2010
2:13 pm

One of my favorite subjects.

Again, congratulations to “Government Motors” The Volt was just named Motor Trends 2011 Car of the Year.

Way to go Obama.

Harry Callahan

November 16th, 2010
2:14 pm

Jay

November 16th, 2010
1:58 pm

“You set it up, I’ll be there, Scout.

Limbaugh in particular. Note that he never puts himself in a situation where he can actually be challenged on the nonsense he spouts?

All bluster and BS.”

…and he makes more money in a day than you’ll make all year…

Normal

November 16th, 2010
2:17 pm

…and he makes more money in a day than you’ll make all year…

Oh, that’s good Harry…and Jay will be sitting in Heaven and Rush won’t…Ha, ha.

TaxPayer

November 16th, 2010
2:17 pm

…and he makes more money in a day than you’ll make all year…

Some people and their wealth envy…

Normal

November 16th, 2010
2:18 pm

Money, the great American scorecard. Sad really.

ByteMe

November 16th, 2010
2:19 pm

Harry’s proud of his values.

Randalph on the Right

November 16th, 2010
2:19 pm

No way the gubermint should have bailed GM out…

Mary Elizabeth

November 16th, 2010
2:20 pm

Matti @ 2:11

Thanks, Matti. I knew I could count on you to flesh out the details of my argument! :-)

Looking out for “number one” – the cultural climate we have created in our nation.
Thanks, again, for reading my 2:00 posting downstairs, Matti.

Harry Callahan

November 16th, 2010
2:25 pm

TaxPayer

November 16th, 2010
2:17 pm

“Some people and their wealth envy…”

Depends how you define wealth envy, TP…I figure Rush earned it, so he’s entitled to keep it. You?

Road Scholar

November 16th, 2010
2:26 pm

Time will tell with the stock offering, but the people working at GM have jobs.

Harry, so the true value of a man is his salary/net worth? Pitiful! You give he name harry callahan a bad name!

Harry Callahan

November 16th, 2010
2:26 pm

“Can critics of GM bailout issue a recall of their predictions?”

Well, I guess they couldm but given the AP story I posted, their predictions were likely accurate, so why would they?

Harry Callahan

November 16th, 2010
2:27 pm

Road Scholar

November 16th, 2010
2:26 pm

“Harry, so the true value of a man is his salary/net worth? Pitiful! You give he name harry callahan a bad name!”

If you interpreted my post that way, I suggest you go take Reading Comprehension 101 at your local community college.

The De-parting of the Red Sea

November 16th, 2010
2:27 pm

Fortunately, the government bailout of GM and Chrysler saved more than just the companies. It saved jobs. Lots of jobs. It also kept a nearly insolvent PBGC from being forced to call on the government to bail it out had these companies gone under. The actual savings to the taxpayer from these actions, as with the AIG bailout, are still being tallied. All told, the Fed’s actions most likely kept us out of a second great depression but you’ll never get a diehard compassionate conservative to admit as much, unless you consider George Bush to be compassionate conservative, that is.

Father O' Toole

November 16th, 2010
2:29 pm

I used to drive a Popemobile.

Harry Callahan

November 16th, 2010
2:30 pm

People’s salary is often a good indication of how good they are at their job. Michael Jordan is better at playing basketball than me, so he got paid millions and I never earned a cent.

Since Bookman and Limbaugh are both political commentators, I would think that their comparative salaries and/or readership/subscriber/circulation/audience share numbers are a good indicator of how good they each are (or are not) at their jobs. Wouldn’t you?

Harry Callahan

November 16th, 2010
2:31 pm

I’m guessing Rush never heard of Jay Bookman, but that’s just a guess.

Matti

November 16th, 2010
2:31 pm

I agree with Normal. Totally sad when money is the only measure of a man’s value to be found, and yet, so many applaud him as having accomplished something meaningful. I guess he did, if you consider hatred and division, and the certainty that this divided nation will fall because of it, an accomplishment. Yeah, we’ll go down fighting — each other!

ByteMe

November 16th, 2010
2:31 pm

@De-parting is correct. The bailout wasn’t just about who got the money… it was about how much liability was really there for the government to absorb had the TBTF banks and auto makers disappeared overnight. The bailout costs are going to be trivial compared to what we would have had to pay to make pensioners and bank depositors whole when their pensions/deposits disappeared in a cloud of banker malfeasance.

Father O' Toole

November 16th, 2010
2:32 pm

Callahan was kicked out of the department and dated a dyke cop.

ByteMe

November 16th, 2010
2:32 pm

A good carnival barker will make more money off the idiot masses than a working stiff any day.

Bubba Bob

November 16th, 2010
2:34 pm

What’s to celebrate? The government screwed the primary debt holders who legally had first claim and used the situation to bailout the unions. I would much prefer to celebrate the situation knowing my government wasn’t breaking the law to pander to their gravy train.

Harry Callahan

November 16th, 2010
2:35 pm

since you guys seem to know everything Rush says and does, how about telling us how much time you spend listening to his show? Or do you get all your opinions spoon-fed from George Soros?

TaxPayer

November 16th, 2010
2:35 pm

Depends how you define wealth envy, TP…I figure Rush earned it, so he’s entitled to keep it. You?

I figure if you wish to use Limbaugh’s monetary gains from what he does as a means of comparing his “value” to that of Jay or others, you are certainly entitled to. Just sounds like wealth envy, is all… Entitlements are a completely different topic though.

Harry Callahan

November 16th, 2010
2:35 pm

ByteMe

November 16th, 2010
2:32 pm

“A good carnival barker will make more money off the idiot masses than a working stiff any day.”

Agreed. Barack Obama proves it every day.

Jay

November 16th, 2010
2:36 pm

George Soros has a radio show?

Randalph on the Right

November 16th, 2010
2:37 pm

Jay it’s called “all thing considered”

Harry Callahan

November 16th, 2010
2:37 pm

Taxpayer…Barack Obama has gone on he public record as bvelieving that anyone making $250K is doing well, and therefore should pay more taxes so that Obama can “spread the wealth around.” You agree with that?

Vinny

November 16th, 2010
2:37 pm

Jay- You spout pure nonsense once again. Any company can make money after they are given billions of taxpayer funds to keep them afloat.
When, oh when will they pay each and every american back for the money that was handed to them by the liberals?

Pure, nonsense once again Jay. You have no more credibility than Cynthia Tucker.

Randalph on the Right

November 16th, 2010
2:37 pm

that’s pretty funny if I do say so myself!

ByteMe

November 16th, 2010
2:38 pm

@Bubba needs to read more: http://www.slate.com/id/2217653/?from=rss

Perhaps there’s a reason the bondholders weren’t able to get the courts to intervene on their behalf to keep the government from imposing their own conditions on the debtor-in-kind financing they were offering.

Randalph on the Right

November 16th, 2010
2:38 pm

Vinny, Jay has a lot more credibility than Cynthia McKinney, oh you said Tucker…my bad!

ByteMe

November 16th, 2010
2:39 pm

Poor Harry keeps wanting to distract people from discussing his values, so he tosses out “Obama” and hopes that will be enough.

Matti

November 16th, 2010
2:40 pm

A good carnival barker will make more money off the idiot masses than a working stiff any day.

That explains the half-term governor turned reality star.

Harry Callahan

November 16th, 2010
2:40 pm

ByteMe, what are your values? Voting for government to tax the rich in order to fund your retirement, health care, etc? Awesome values dude. What a go-getter you are.

ByteMe

November 16th, 2010
2:41 pm

She’s only a “star” if you watch. Otherwise, she becomes a “half-term governor/failed celebrity”.

Jay

November 16th, 2010
2:42 pm

The sad thing is, I suspect that despite GM’s success and the preservation of more than a million American jobs, a good number of the posters here would STILL prefer that Obama failed.

Harry Callahan

November 16th, 2010
2:42 pm

Matti

November 16th, 2010
2:40 pm

“A good carnival barker will make more money off the idiot masses than a working stiff any day.

That explains the half-term governor turned reality star.”

I was thinking it described the Clintons pretty well, but I guess there are numerous examples to choose from.

ByteMe

November 16th, 2010
2:42 pm

Poor Harry, still trying to distract people from discussing his pathetic values.

Bubba Bob

November 16th, 2010
2:43 pm

Byteme,

Straight from that article – “The Chrysler deal, midwifed and financed by the government, does upend the traditional order and sets a precedent that, were it to be repeated, would be dangerous. In ordinary times and circumstances, there’s no justification for the government to intervene in a way that privileges unsecured lenders over secured lenders. But the times and circumstances surrounding Chrysler aren’t ordinary.”

Did you read it yourself? He’s saying there’s no justification for this except that times are bad. So I guess we can throw out the law when times are bad, huh?

ByteMe

November 16th, 2010
2:43 pm

Jay, you are correct that too many just want Obama to fail instead of wanting the country to succeed regardless of who gets the credit. The increase in instant-media outlets has not helped us in this regard.

Southern Comfort

November 16th, 2010
2:44 pm

People’s salary is often a good indication of how good they are at their job. Michael Jordan is better at playing basketball than me, so he got paid millions and I never earned a cent.

Two words… Bob Nardelli

Jay

November 16th, 2010
2:45 pm

Bubba Bob, what do you mean “throw out the law?”

If laws were broken here, I suspect the Republicans would be pointing that out and taking them to court.

Yet they aren’t.

Bubba Bob

November 16th, 2010
2:45 pm

Jay,

I don’t prefer he failed. I prefer the law be followed and secured lenders be given the rights that were agreed upon.

AmVet

November 16th, 2010
2:46 pm

One thing I will say for the modern day, hijacked, embarrassed GOP, as manifested by and infested with these fake conservatives, they are consistent.

Consistently wrong. Across the board. On virtually every topic.

But they sure do admire their “stick to their principles” failures like GWB, who took six friggin years to think of *any* mistakes he had made!

Though his first 100 days in office alone were a record setter in that regard. And it was, of course, to get much, much, much worse.

Good times in Delusionville…

ByteMe

November 16th, 2010
2:46 pm

@Bubba: I did. Do you understand that the rescuing organization gets to make the rules for the rescued organization and that NO ONE ELSE was coming forward with enough money to take on the task? If another organization had come forward to bail out Chrysler, there’s no way the government would have needed to get involved, provided it didn’t dump the pension liabilities on the taxpayers. But no one did. So the government gets to make the rules and favored the employees over the moneychangers in the temple.

Harry Callahan

November 16th, 2010
2:46 pm

Jay

November 16th, 2010
2:42 pm

“The sad thing is, I suspect that despite GM’s success and the preservation of more than a million American jobs, a good number of the posters here would STILL prefer that Obama failed.”

LOL…this is the kind of stuff that leaves serious-minded people in stitches. First of all, can you prove it saved a million jobs? GM employs 205,000 people. We’re to believe that NONE of them would have survived a normal, non-government-subsidized bankruptcy, and that another 800,000 would mysteriously have lost their jobs as well, as opposed to finding employment when the other car makers ramped up production to fill the void left by GM’s departure?

And even if I buy the 1 million jobs saved, divided by $50 billion that’s $50,000 spent per each job saved? LOL…what was the line above about a carnival huckster?

Bubba Bob

November 16th, 2010
2:47 pm

Jay,

So it’s not against the law to privilege an unsecured lender over a secured one?

DannyX

November 16th, 2010
2:47 pm

“Iraq has weapons of mass destruction.”

“Mission Accomplished.”

“Iraq will only cost $10 billion. Tops.”

“The Bush tax cuts will create an economic miracle.”

“Birth certificates, flag pins, fist bumps, and Muslims.”

“Now the government has forced taxpayers to buy these failing companies without any plausible plan for profitability. Does anyone think the same government that plans to double the national debt in five years will turn GM around in the same time?”

Republicans got one bullet back that they must keep in their shirt pocket. They can’t help it. You know they’ll do it. Poor foot. Better amputate.

Bubba Bob

November 16th, 2010
2:48 pm

Byteme,

So GM gets to take money from the ‘moneylenders’ and use it and then they get screwed so the unions can get privileges. Very nice. Sure makes me want to take a risk and invest my own money.

larry

November 16th, 2010
2:48 pm

All this fuss about GM and Chrysler and yet no one mentions the time the federal government bailed out a company who has a plant in Marietta. And that was under Nixon. I guess he was a socialist too.

buzz

November 16th, 2010
2:49 pm

Government should not bail out companies.

End of story.

If a private business fails, then it fails. I don’t care how many people it employs. Another company will just sell more cars and hire more people to keep up with demand.

That is CAPITALISM, something the USA is apparently afraid of.

And by the way, Joe Consumer is not allowed to buy GM stock … try to buy a share Jay Bookman and see what happens.

And Toyota pays TAXES, something GM won’t have to do for 25 YEARS thanks to the government bailout.

Harry Callahan

November 16th, 2010
2:49 pm

AmVet

November 16th, 2010
2:46 pm

“One thing I will say for the modern day, hijacked, embarrassed GOP, as manifested by and infested with these fake conservatives, they are consistent.”

I would think that after the recent election results it would be Democrats who are hi-jacked and embarassed, but as usual, you liberals think, like Goebbels, that repeating a lie often enough and loud enough eventually makes it true.

Doggone/GA

November 16th, 2010
2:50 pm

“Iraq will only cost $10 billion. Tops.”

You forgot the six months and we’d be out promise:

Feb. 7, Defense Secretary Donald Rumsfeld, to U.S. troops in Aviano, Italy: “It is unknowable how long that conflict will last. It could last six days, six weeks. I doubt six months.”

stands for decibels

November 16th, 2010
2:52 pm

Fortunately, the government bailout of GM and Chrysler saved more than just the companies. It saved jobs. Lots of jobs.

Which explains a great deal of the ire being expressed here, one presumes.

ByteMe

November 16th, 2010
2:52 pm

Here are the available alternatives that you don’t like Bubba: GM fails and disappears leaving a little money in depreciating assets to the bondholders (pennies on the dollar) and a HUGE pension liability for taxpayers to pay over time… or someone comes forward and bails out the company. No private enterprise wanted to do the latter, because it was too big and money was tight (credit crisis and all that). So it was left to the government to prop it up. Well, it’s their money and they got to make the rules of who succeeded and who failed in the transaction. Simple as that.

And if you think it was illegal, then there would be a lawsuit. Got a court case number we should all follow? Or are you just feigning moral outrage and have no vested interest in this?

Jay

November 16th, 2010
2:53 pm

Well, Bubba, given how they’re apparently lining up to buy GM stock, there’s no shortage of folks willing to take that risk even if you’re not.

ByteMe

November 16th, 2010
2:53 pm

@larry: Nixon instituted price controls. How much more socialist do you want?

Hillbilly Deluxe

November 16th, 2010
2:53 pm

SoCo @ 2:44

Now Bob Nardelli was able to do something that few people have been able to do. He oversaw a loss in profits, a loss in sales, a loss in market share and a loss in stock prices. Now, lot’s of us could have accomplished 2 or 3 of those, but all 4? That takes a talent that most of us just don’t have. ;-)

Southern Comfort

November 16th, 2010
2:53 pm

And by the way, Joe Consumer is not allowed to buy GM stock … try to buy a share Jay Bookman and see what happens.

So what does an IPO mean then?

Union

November 16th, 2010
2:54 pm

i was very critical of all of the bailouts.. not just gm. i am glad that it worked out for gm and it appears to be a good thing for the american people in general. that being said.. kind of odd how the largest manufacture of vehicles in the us is no longer a us company..

i have seen a little news that china is very interested interested in acquiring some of the gm stock that will be coming up for bid..

barking frog

November 16th, 2010
2:54 pm

The complete GM reorganization is yet to be played out.
They have brand new plants operating in China, Russia,
Mexico and I don’t know where else. Is the money flow
going overseas or coming back? Are the profits reflecting
low labor costs in foreign plants? One thing Obama did
was stop GM from unloading the UAW which was why
they wanted to bankrupt. The Chinese are looking to
buy idled auto plants from the automakers so that may
boost their bottom lines also. A lot of different dynamics
in the auto bailout that are far from played out.

Southern Comfort

November 16th, 2010
2:55 pm

HD

But, but, but…… Harry said, “People’s salary is often a good indication of how good they are at their job.” If Bob was that “good” at his job, I’m in the wrong profession. ;)

ByteMe

November 16th, 2010
2:55 pm

SoCo: it means that we don’t get first crack at it. IPO is more of a controlled placement to the big investors at investment banks and they turn around and offer some of it for sale to the public. This is not any kind of “auction” until the big investors turn their shares loose.

Jackie

November 16th, 2010
2:55 pm

As usual, those so-called conservatives refuses to believe or understand the significance of the actions taken by the Obama Administration saved them and their friends from a total economic collapse.

Why is it hard for the so-called conservatives to understand that any function does not work to the satisfaction of everyone and everything?

The question remains, what action would the so-called conservatives taken had they been in the position to make such a decision?

Nice Guy

November 16th, 2010
2:56 pm

Jay – “Can critics of GM bailout issue a recall of their predictions?”

I think you are waiving the victory flag a bit early. You forget that GM is a multinational company, and yes, domestic operations are doing great, but overseas is a whole separate issue.

What about the pension liability, how underfunded is that?

And don’t forget, Jay, that only the government has the power to outright screw over the bond holders as they did.

Bubba Bob

November 16th, 2010
2:56 pm

Jay,

They are lining up to buy stock that other people were forced to loose money on. That’s so great.

ByteMe,

I’m not feigning anything. Agree or disagree this is how I feel. I didn’t like TARP either and that was Bush. Hit me on that one.

jconservative

November 16th, 2010
2:56 pm

If Treasury gets all its money back from the GM investment, then the decision will be judged a success. If the Treasury actually makes a few million in profits, a resounding success.

Just follow the money.

Kinda like Clinton’s bail out of “Mexico” – paid back early with interest. A success.

If one’s objection to the GM bailout is on the principle of “None of the government’s business”, then so be it. But those objections are really 32 years too late. Remember Carter did Chrysler and everybody was happy when it was over. And no one introduced a bill to prevent it from happening again. So it happened again. And will probably happen again down the road.

Once a precedent is set……..

professional skeptic

November 16th, 2010
2:57 pm

Bubba Bob

November 16th, 2010
2:57 pm

Jackie,

What have you been saved from? You think this has saved us? $13T in debt and $111T in unfunded liabilities and you feel saved? Wow.

ByteMe

November 16th, 2010
2:57 pm

BTW, I would definitely buy GM shares and hold them right up until the next union contract comes up. That will once again be the beginning of the end. For now, they’re HIGHLY profitable in a down market and those stocks are hard to come by.

Granny Godzilla

November 16th, 2010
2:57 pm

In a few years we’ll hear how the GOP gave us healthcare, financial reform and saved the auto industry.

Congrats to President Obama and his administration for another success.

Southern Comfort

November 16th, 2010
2:57 pm

ByteMe

The way some of these posters here stick their chests out, I thought they were the big boys!!! So, maybe I was wrong about them.

ByteMe

November 16th, 2010
2:58 pm

Bubba: ok, I’ll accept that. But where’s the court case? If the bondholders were legally supposed to get their share first, then there would be a lawsuit over the way you feel this has been handled. I looked and couldn’t find it. Where’s the case?

Southern Comfort

November 16th, 2010
2:59 pm

Nice Guy

GM’s overseas units were the ones initially turning profits. The domestic side just now is beginning to see black if I’m not mistaken.

larry

November 16th, 2010
2:59 pm

@Byte me: So Nixon was a socialist and a Repub and won by a landslide in 1972, go figure.

ByteMe

November 16th, 2010
3:00 pm

SoCo: I’m lucky to sometimes be in the right place to pick up new bond offerings before they start publicly trading and it really is a nice place to be. I keep thinking I need to open an investment account at GS or JPM just for the fun of being a very tiny part of an IPO.

Left wing management

November 16th, 2010
3:00 pm

“Does anyone really believe that politicians and bureaucrats in Washington can successfully steer a multinational corporation to economic viability?”

Ooooh ooooh :)

Some Boehnheaded words indeed

Harry Callahan

November 16th, 2010
3:00 pm

Guys, I just spent $12 at Longhorn Steakhouse for lunch. According to Bookman’s logic, I just saved 75 jobs.

ByteMe

November 16th, 2010
3:01 pm

@larry: see my earlier comment on carnival barkers and working stiffs. It applies indirectly. Success in conning people does not make someone “right”.

Doggone/GA

November 16th, 2010
3:01 pm

“So what does an IPO mean then?”

Public, in this case is not generic. The stocks are offered to a pool – sometimes a very limited pool – of stockbrokers. IPO’s are, themselves, something of a scam on the public. Quite often the are offered at a low price, and the buyers turn right around and sell them again at a HUGE profit.

Harry Callahan

November 16th, 2010
3:02 pm

I wonder how the hard working people over at Ford feel about losing sales (and eventually jobs) to rival GM, who can now sell cars cheaper thanks to having Obama wipe out $50 billion in debt?

AmVet

November 16th, 2010
3:03 pm

buzz, I agree.

But American Capitalism 1.0 has been virtually destroyed. It was the final outcome of the Corporate Destruction of Capitalism that happened officially in September 2008, but the reality was that it was on it’s house-of-cards, smoke and mirrors deathbed much earlier.

Now we suffer under Capitalism 1.1.

In which the Three Laws of Capitalism are still MIA.and virtually NOTHING in the equation regarding Washington and Wall Street has changed.

The Three Laws of Capitalism

1) If you own it, you control it. Except in corporate America where the shareholders have vitually NO say whatsoever. A handful of very wealthy and enthroned men in closed boardrooms control everything, including their own obscene wages.

2) You are free to operate as you see fit. Including that you are free to fail. Unless, of course, you are deemed “too big” to fail.

3) There should be no governmental manipulation or intervention in truly free markets.

And number three is the rub, eh? Our “free market” is little but governmental intervention and manipulation. Endless handouts, give-aways, subsidies and tax loopholes/breaks. Almost ALL on the backs of the working class taxpayers, shareholders and consumers.

All completely contrived to protect the guilty and the plutocracy.

And that is why this inane and incessant bleating about income redistribution and socialism is so pathetically funny. It has been part and parcel of the American system for two centuries!

But now it completely out of control and has had devastating and decades long consequences for millions of American families.

All thanks to that “sustained orgy of greed and reckless behavior”…

DannyX

November 16th, 2010
3:03 pm

No one was forced to loose any money. UNSECURED GM debt holders were given the option of GM stock but refused, they settled for pennies on the dollar. Huge mistake. 10% of GM is worth a lot of money right now.

Granny Godzilla

November 16th, 2010
3:03 pm

Nice Guy

November 16th, 2010
3:04 pm

SoCo –

Their Europe Ops are in the red. Look it up.

arnold

November 16th, 2010
3:04 pm

I don’t think there is any question that the Republican Party wants Obama to fail.

Normal

November 16th, 2010
3:04 pm

Bubba Bob

November 16th, 2010
2:43 pm
Bubba,
That’s just the writers opinion. I see no proof to that statment at all. Show proof and I’ll believe, otherwise it’s just another myth to me.

Hillbilly Deluxe

November 16th, 2010
3:05 pm

I just spent $12 at Longhorn Steakhouse for lunch

You paid too much, in my opinion.

Harry Callahan

November 16th, 2010
3:05 pm

Anybody else notice that GM (now that it is government owned and controlled) is the only corporation in the history of the universe to have liberals celebrate obscene profits? If Ford announced a smiliar profit, the only thing you would hear from the usual liberal suspects would be the “corporatist, plutocracy, ripping off the working man, disappearing middle class, why didn’t they pay more taxes” nonsense we get every day from liberals.

jt

November 16th, 2010
3:05 pm

The tax payers spent about a100 million on GM back in the 70’s.

This turned into about a 100 billion in the 00’s.

See where I’m going??????????????/

GM is a tapeworm in the stomach of America , fed by an un-willing populance.