Ok, here is a test for you - which of these year-over-year sales increase percentages reflects the correct performance of General Motors in February: 40%, 17%, 15%, 14%, 12%, or 1%?
If you picked 1%, then you are either very knowledgeable about the U.S. automobile industry or a regular reader of Moment of Clarity who knows I am about to obliterate our President’s ridiculous recent claim that he single-handedly saved the U.S. auto industry by bailing out the UAW and GM.
The industry as a whole is up 15%, and the President is taking credit for the resurgence. His “rescue” of the automobile industry will be a major campaign theme this fall, and he has pre-empted debate on the matter by calling any challenge to his messianic claims “a load of you-know-what”. Actually, we do know what – truth.
There are 36 brands of automobiles sold in the United States; only a handful of them received government “assistance”. Automotive News, the gold standard for industry statistics, reports that only three brands manufactured in the U.S. are seeing sales declines this year; all three - Cadillac, Buick, and GMC trucks – are products of General Motors, the official pace car of the Obama victory lap.
The number of new vehicles sold in the U.S. this year is expected to be 15.1 million, far below the 17.2 million Americans averaged from 2000 to 2007. At this rate, we will just be getting back to where we were when this President was elected in the second year of the next guy’s term. Progress is progress, but let's keep some perspective here.
It’s not all the President’s fault - George W. Bush started the ball rolling with the GM and Chrysler bailouts, diverting billions of TARP funds to sustain two of the nation’s seven automobile builders until the next President could finish the job. That should have been all the argument President Obama needed to conclude it was a dumb idea. But he followed through on the Bush bailout plan – all told, nearly $85 billion in taxpayer money was put at risk to benefit two Detroit companies.
The September 2008 pitch from the Detroit unions was that without immediate government intervention to stave off bankruptcy, the whole industry would collapse and 2-3 million jobs would be lost. It is ironic that the only two carmakers who really did go bankrupt were the two that accepted government assistance. And the President conveniently neglects to mention that his imposed bankruptcy settlement at GM cut the pensions for a large segment of GM’s retirees by 70%. Must be the third Koch brother or something.
Chrysler, the other 2008 welfare queen, was liberated from government ownership last year, and celebrated its independence with a cool 40% increase in sales this year, the highest of the major builders. We taxpayers lost billions on the Chrysler bailout, too, and bondholders were brutalized by a politicized bankruptcy proceeding that would need major reform just to qualify as a Kangaroo Court. The corporate bond markets are still screwed up three years later thanks to that reckless maneuver.
Someone needs to inform the President that Chrysler’s industry leading resurgence has come about after its return to private hands and change of ownership – for all practical purposes it is now Fiat USA. This illustrates the importance of unimpeded bankruptcy in market capitalism. It is Chrysler, not GM, which teaches the important lesson of economic recovery. The purpose of bankruptcy is to transfer assets from those who managed them poorly to those who will manage them better; the sooner this transfer takes place the faster the return to prosperity.
The reason we are still mired in economic crisis in the fifth year of this current downturn is that government still intervenes to prevent the liquidation of bad assets, props up mal-investments like GM, and has gobbled up available credit to finance its obscene deficits and debt. The President has postponed the very economic recovery that exists in his imagination.
GM is still partially owned by the U.S. Treasury. When the last of the publics’ stock is sold, we taxpayers will have flushed between $10 billion and $20 billion down the UAW rat-hole, depending on its stock price at the time of divestiture. And by any measure, GM will still be the worst U.S. car company, lagging far behind the players who declined the handout and focused instead on getting better.
General Motors, with its 1% year-over-year sales growth, trails Chrysler, Ford, Nissan, Toyota, Honda, Hyundai, Kia, Volkswagen, BMW, Mercedes, and Jaguar. And why not - what has changed in the last three years of government supervision to make General Motors better? Why is it now a more attractive destination for bright, talented, innovative managers, or for visionary engineers, skilled-trades workers, savvy marketers, process developers, logistics experts, strategists?
If you were graduating at the top of your class next month at Wharton, or Michigan, or RPI, would you hitch your wagon to a company owned by the UAW and the U.S. Treasury Department that takes a victory lap at 1% growth? Or would you go discover how high is up for you over at Jaguar (48%), Volkswagen (43%), or BMW (29%)?
The U.S. auto industry is rebounding in spite of, not because of, government intervention. The lasting symbol of the Government Motors era will be the Chevrolet Volt – an overpriced, impractical death-trap nobody wants whose most desirable feature is an $8,000 government bribe that still wasn’t enough to fool people into buying one.
And if we are supposed to pick a President based on turning a car company around in a bad market, let’s go find the person who saved Bentley (25%), not the guy who told us the Volt is our future.
“Moment Of Clarity” is a weekly commentary by Libertarian writer and speaker Tim Nerenz, Ph.D. Visit Tim’s website www.timnerenz.com to find your moment and order Tim’s new book, “BRING IT!”
If you picked 1%, then you are either very knowledgeable about the U.S. automobile industry or a regular reader of Moment of Clarity who knows I am about to obliterate our President’s ridiculous recent claim that he single-handedly saved the U.S. auto industry by bailing out the UAW and GM.
The industry as a whole is up 15%, and the President is taking credit for the resurgence. His “rescue” of the automobile industry will be a major campaign theme this fall, and he has pre-empted debate on the matter by calling any challenge to his messianic claims “a load of you-know-what”. Actually, we do know what – truth.
There are 36 brands of automobiles sold in the United States; only a handful of them received government “assistance”. Automotive News, the gold standard for industry statistics, reports that only three brands manufactured in the U.S. are seeing sales declines this year; all three - Cadillac, Buick, and GMC trucks – are products of General Motors, the official pace car of the Obama victory lap.
The number of new vehicles sold in the U.S. this year is expected to be 15.1 million, far below the 17.2 million Americans averaged from 2000 to 2007. At this rate, we will just be getting back to where we were when this President was elected in the second year of the next guy’s term. Progress is progress, but let's keep some perspective here.
It’s not all the President’s fault - George W. Bush started the ball rolling with the GM and Chrysler bailouts, diverting billions of TARP funds to sustain two of the nation’s seven automobile builders until the next President could finish the job. That should have been all the argument President Obama needed to conclude it was a dumb idea. But he followed through on the Bush bailout plan – all told, nearly $85 billion in taxpayer money was put at risk to benefit two Detroit companies.
The September 2008 pitch from the Detroit unions was that without immediate government intervention to stave off bankruptcy, the whole industry would collapse and 2-3 million jobs would be lost. It is ironic that the only two carmakers who really did go bankrupt were the two that accepted government assistance. And the President conveniently neglects to mention that his imposed bankruptcy settlement at GM cut the pensions for a large segment of GM’s retirees by 70%. Must be the third Koch brother or something.
Chrysler, the other 2008 welfare queen, was liberated from government ownership last year, and celebrated its independence with a cool 40% increase in sales this year, the highest of the major builders. We taxpayers lost billions on the Chrysler bailout, too, and bondholders were brutalized by a politicized bankruptcy proceeding that would need major reform just to qualify as a Kangaroo Court. The corporate bond markets are still screwed up three years later thanks to that reckless maneuver.
Someone needs to inform the President that Chrysler’s industry leading resurgence has come about after its return to private hands and change of ownership – for all practical purposes it is now Fiat USA. This illustrates the importance of unimpeded bankruptcy in market capitalism. It is Chrysler, not GM, which teaches the important lesson of economic recovery. The purpose of bankruptcy is to transfer assets from those who managed them poorly to those who will manage them better; the sooner this transfer takes place the faster the return to prosperity.
The reason we are still mired in economic crisis in the fifth year of this current downturn is that government still intervenes to prevent the liquidation of bad assets, props up mal-investments like GM, and has gobbled up available credit to finance its obscene deficits and debt. The President has postponed the very economic recovery that exists in his imagination.
GM is still partially owned by the U.S. Treasury. When the last of the publics’ stock is sold, we taxpayers will have flushed between $10 billion and $20 billion down the UAW rat-hole, depending on its stock price at the time of divestiture. And by any measure, GM will still be the worst U.S. car company, lagging far behind the players who declined the handout and focused instead on getting better.
General Motors, with its 1% year-over-year sales growth, trails Chrysler, Ford, Nissan, Toyota, Honda, Hyundai, Kia, Volkswagen, BMW, Mercedes, and Jaguar. And why not - what has changed in the last three years of government supervision to make General Motors better? Why is it now a more attractive destination for bright, talented, innovative managers, or for visionary engineers, skilled-trades workers, savvy marketers, process developers, logistics experts, strategists?
If you were graduating at the top of your class next month at Wharton, or Michigan, or RPI, would you hitch your wagon to a company owned by the UAW and the U.S. Treasury Department that takes a victory lap at 1% growth? Or would you go discover how high is up for you over at Jaguar (48%), Volkswagen (43%), or BMW (29%)?
The U.S. auto industry is rebounding in spite of, not because of, government intervention. The lasting symbol of the Government Motors era will be the Chevrolet Volt – an overpriced, impractical death-trap nobody wants whose most desirable feature is an $8,000 government bribe that still wasn’t enough to fool people into buying one.
And if we are supposed to pick a President based on turning a car company around in a bad market, let’s go find the person who saved Bentley (25%), not the guy who told us the Volt is our future.
“Moment Of Clarity” is a weekly commentary by Libertarian writer and speaker Tim Nerenz, Ph.D. Visit Tim’s website www.timnerenz.com to find your moment and order Tim’s new book, “BRING IT!”
