President Obama and his union allies have decided that the 2012 reelection will prominently feature a defense/justification of the General Motors and Chrysler bailouts. This nascent effort included Treasury Secretary Tim Geithner's op ed in the Washington Post this week, which was both inaccurate and ill-timed.
Geithner's op-ed included this amusing whopper about Chrysler:
Nothing about the president’s call was popular. It may have been more politically expedient to let Chrysler fail. But the president knew that if Chrysler collapsed, tens of thousands of jobs would have been shed in the near term — a body blow to an economy already on the ropes.
Obama's top economic advisor, Austan Goolsbee, disagreed strongly with this assessment at the time the decision was made, as Obama's auto czar, Steve Rattner, recorded in his book, Overhaul. Rattner disagreed as well. He stated in the book that political and social considerations were the only reasons for the Chrysler bailout -- there was practically no economic case for it at all.
Geithner's op-ed was also noteworthy because it came the day before GM's stock price plummeted on disappointing May sales numbers. GM is selling more cars than last year, but only by offering incentives more than 50 percent more generous than the industry average. The company has now lost more than 10 percent of its value since its IPO just seven months ago, and its stock is off about 25 percent from its peak in February.
So way to go, taxpayer. And keep your wallet handy, because you're probably going to have to bail them out again eventually.