Monday, April 26, 2010
Great moments in Crony Capitalism
Much has been said about the rise of the government corporation like General Motors, Citibank and AIG. These large companies were bailed out with massive infusions of taxpayers money. Obama portrays this as temporary and a necessary evil, and he expects these companies to go along with that narrative. Today, however, comes news of a lie so amazing that I am surprised that even the Obamacrats stood by and let it proceed. As most people know, last week GM paid off billions of dollars in federal loans and it did so years early. Sounds great, right? The Washington Times discloses this morning that the funds used by GM to pay off the federal loan were TARP funds. The Times quotes the Inspector General of the TARP program to confirm this fact. So GM paid off a loan from the federal government with other funds provided by the federal government. That is bad enough, but the Obamacrats let this lie proceed without telling the American people about it. GM's self-congratulatory ads about paying off its debts are much more misleading than anything that Goldman Sachs ever did. Remember "Hope and Change"? What a lie. It's more like "Fraud and Deceit"!
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2 comments:
First, I want to thank you for a very interesting and provocative blog. I agree with most of your comments. This one, though, is an exception.
The fact that GM still has TARP money does not demonstrate that paying back the loan should not be commended. The only way I would feel differently is if I knew that when they planned to pay back the loan only 5 years from now, they had also planned to pay back the TARP this year. IF that were the case, then it would be just a blatant switch for publicity purposes. However, I have seen no indication that that was the intent. So, instead of having both TARP and the loan outstanding, they now paid the loan back, 5 years early. Even in cynical times, that should be applauded by all. And let me just add that I am not a GM fan and never have been.
Thanks for the comment. the point about GM, however, is a simple one: they used taxpayer funds to paay back a different loan from the taxpayers, then they trumpeted the repayment as a sing of financial strength and of fiscal responsibility. It is neither.
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