Obama Celebrates One Year Anniversary of General Motors Bailout

President Obama today touted the federal government's $60 billion bailout of General Motors last year, even stating the federal government will "recoup" its investment.

"A year after the government's big auto-industry bailouts, President Barack Obama on Friday trumpeted increased car sales and progress on battery-powered vehicles as a beacon of success in his administration's battle to revive a hurting U.S. economy. But his upbeat assessment can't mask daunting challenges for U.S. automakers and painfully high unemployment.

Touring Chrysler and General Motors assembly plants, Obama argued that his administration's unpopular $60 billion bailout of the two companies — essentially government-funded forced bankruptcies — was paying off. Clear evidence that he sees an opening to appeal to recession-weary voters, Obama will continue to press the same case next week when he tours the Chicago plant where Ford Motor Co. builds the Taurus sedan and plans to assemble a new Explorer sport utility vehicle.

Few disagree that the intervention helped keep the firms afloat.

Obama and fellow Democrats are eager to seize on the auto industry story, framing it as a success before the fall congressional elections.

At Chrysler's Jefferson North plant, which recently added about 1,100 workers for a second shift, the president told employees, to loud cheers, "you are proving the naysayers wrong."

In contrast to the President's words, there never was a sound economic reason to bailout the US auto industry (and specifically General Motors and Chrysler).

If the rationale for the bailout was "jobs", the ratio of jobs saved as compared to the amount used to "pay" for retaining those jobs is at a ridiculously low level.

The fact is, the auto bailout was never about jobs, as opposed to politics. The President and Congress in effect borrowed tens of billions of dollars in order to salvage the union jobs that exist within the auto companies and to protect and reward the Democrats' key voting base.

The federal government should immediately sell its stake in both GM and Chrysler to private buyers, immediately recognize the loss that they are going to have to take eventually anyway, and put ownership of the companies back in the private hands that it belongs.