Taxpayer losses tied to auto bailout rise
From Doug McKelway's article on Fox News:
John Berlau of the Competitive Enterprise Institute argues the stock decline reflects the liability of the federal government picking winners.
"They're making the environmentally correct cars. The government, the Obama administration wanted them to make the Chevy Volt rather than some of their better-selling products like some of the GM trucks," Berlau said.
Berlau adds that GM's buy-out and bankruptcy broke with legal precedent. "In a standard bankruptcy, the court will give priority to lenders and then to bond holders and then to stockholders," he said. "Here, the United Auto Workers got priority not only over other bond holders, they got a higher stake in the new company than other bond holders that had the same unsecured status."
In a statement to Fox News Tuesday, Treasury Department spokesman Matt Anderson defended the bailout.
"The auto industry rescue helped save more than one million jobs throughout our nation's industrial heartland and is expected to cost far less than many had feared during the height of the crisis," he said.
Berlau questions those numbers. "I think there's some real fuzzy math going on there. At the same time, (Obama) put 100,000 jobs on the chopping block by closing more than 2,000 dealers in a matter of months."