Kissing Frogs ... The Auto Bailout Monty

It plays out like something from the old "Wonderful World of Disney".

A friendly-looking, white-haired older gentlemen, speaking in a tone, that of a grizzled, wise-to-the-bone, Midwestern small town doctor, a bit self-effacing, before laying on the con ...

Here, watch it;

GM Repaid Government Loan Ahead of Schedule



Ah, not quite there Ed, but thanks for coming and playing our game.



It's all a hustle!

Gretchen Morgenson uncovers all three of the Monty Cards in her piece today;

Repaying Taxpayers With Their Own Cash

Truth seekers the nation over, therefore, are indebted to Senator Charles E. Grassley, Republican of Iowa, who in recent days uncovered what he called a government-enabled “TARP money shuffle.” It relates to General Motors, which on April 21 paid the balance of its $6.7 billion loan under the Troubled Asset Relief Program.

G.M. trumpeted its escape from the program as evidence that it had turned the corner in its operations. “G.M. is able to repay the taxpayers in full, with interest, ahead of schedule, because more customers are buying vehicles like the Chevrolet Malibu and Buick LaCrosse,” boasted Edward E. Whitacre Jr., its chief executive.

[snip]

Taxpayers are naturally eager for news about bailout repayments. But what neither G.M. nor the Treasury disclosed was that the company simply used other funds held by the Treasury to pay off its original loan.

[snip]

Mr. Grassley heard back from the Treasury last Tuesday. Herbert M. Allison Jr., assistant secretary for financial stability, confirmed that the money G.M. used to repay its bailout loan had come from a taxpayer-financed escrow account held for the automaker at the Treasury.

Even Snoozin' Larry Summers, woke up long enough to work the con;

What a difference a year makes. Just about a year ago, the American auto industry was on the brink of collapse. Today, General Motors announced that it has repaid its $6.7 billion loan to the U.S. government in full five years ahead of schedule, and Chrysler announced that, after taking one-time charges last year associated with its restructuring, it produced an operating profit in the first quarter of 2010 for the first time since the economic crisis began. The prospect of a faster than anticipated exit from government involvement and a return of most of the taxpayers’ investment in these companies has materially improved.

This turnaround wasn’t an accident of history. It was the result of considered and politically difficult decisions made by President Obama to provide GM and Chrysler – and indeed the auto industry – a lifeline, if they could demonstrate the will to reshape their businesses and chart a path toward long-term viability without ongoing government assistance.

Holy Long Con, Batman!

Even Bernie Madoff, sitting in his prison cell, had to give himself a few headslaps after reading this today.

He was in the wrong racket.

If he only hooked into the Government money pipeline ...



He had to be thinking about General Motors, taking over the Myra Langtry role in 'The Grifters' with the Government playing Roy Dillon;

Roy Dillon: Maybe I like it where I am.

Myra Langtry: Well, maybe I don't! I had ten good years with Cole, and I want them back! I gotta have a partner! I looked and I looked and believe me, brother, I kissed a lot of fucking frogs, and you're my prince!

But, Gretchen spanked'em all;

Of course, there is much joy in Mudville when a recipient of government aid repays its obligations. And it is also natural that the administration is keenly interested in reassuring taxpayers that losses on their bailout billions will be smaller than expected. Still, employing spin and selective disclosure is no way to raise taxpayers’ trust in our nation’s leadership.

Pucker up, everybody!


Bonus Riffs

Mike "Mish" Shedlock: Oh Please, The GM Bailout Was A Failure, And No The Taxpayer Hasn't Made Money

What's Good For Tesla Motors ...

Top Ten Cloves: Great Things About Obama Taking Over General Motors

Breaking News! GM Cancels UAW In Favor of Adopting Huffington Post Business Model ...Celebrities, Auto Enthusiasts and Bloggers To Build Cars For Free ...Huge Spike In Profits Forecast

Let's Hope The GM Boycott Goes As Good As His Palin Book

Well, I suppose there could be points awarded, for persistence.

We happened to catch this post, yesterday, from Eric Kleefeld, on TPM;

Right-Wingers To Boycott GM?

"In the effort to reverse this lurch beyond the farthest left fringe of previous Democratic statist urges, individual Americans have a role to play. They have to say no to GM products and services until such time as the denationalization occurs," says Hugh Hewitt. He acknowledges that this is a serious step that could hurt people currently working for GM: "But there isn't any alternative, every dollar spent with GM is a dollar spent against free enterprise. Every car or truck purchased from Government Motors is one not purchased from a private car company that competes fairly against all other car companies."

The Cheeseburger That Sweats (h/t Barry Crimmins), aka The Unelected Shadow Leader of the PartyofNoicans is also rooting for it.

Now, Hugh Hewitt is one of the bigger Flying Monkeys out there, and it was, oh so nice, to show some empathy for the GM workers, even though he's betting on screwing them.

So, it is conceivable, that some of his smaller Flying Monkeys, and the Dittoheads that listen to El Dittohead Grande, have already, if they own one, driven their GM automobiles, or trucks, to the nearest junkyard, and replaced it with a good, ol' American-made, "free enterprise" automobile ...

Errr, well, that would have to be subject of another post

But, wait, Hewitt's track record isn't so great on these kind of things.

Steve Benen, in his "SCHADENFREUDE WATCH: HEWITT EDITION..." explains;

In 2006, a few months before the midterm elections, conservative blogger/talk-show host Hugh Hewitt published a book on the drive for a "permanent Republican majority." Soon after, Democrats won a sweeping, historic victory, and reclaimed the majority in both chambers.

In 2007, a few months before the primaries, Hewitt published a book on Mitt Romney and the prospects of a "Mormon in the White House." Soon after, Romney blew leads in Iowa and New Hampshire, and withdrew from the presidential race after a surprisingly poor showing.

In 2008, Hewitt has a new idea for a book. It's called, "How Sarah Palin Won the Election ... and Saved America." There's a small problem: no one wants to publish it ...

Well, we all know how The Wasilla Whiz Kid made out.

Leon Neyfakh, from the New York Observer, has the 411 on the Hewitt-penned-Palin-book that wasn't;

Was that the plan regardless of who won?

"The book obviously presumed [a McCain-Palin victory]," Mr. Yates said, "but the theory was that her impact on this election will have a lasting effect regardless—that she's not gonna go anywhere, that she's just gonna be a figure in G.O.P. politics going forward."

The title of the book, Mr. Yates said, "went through a couple of different iterations."

At one point it was How Sarah Palin Won the Election. At another point it was How Sarah Palin Won the Election ... and Saved America.

"If they were to lose the election it would have just been How Sarah Palin Saved America," Mr. Yates said. "We were trying to cover our bases depending on what may happen."

Rest easy, GM workers ... You got nothin' to lose sleep over ... Well, at least from a Hugh Hewitt-led boycott.

If we follow form, sales of GM cars will skyrocket.

Top Ten Cloves: Great Things About Obama Taking Over General Motors

News Item: Your Government, Running The Auto Industry

10. Presidential Limo now covered by the new, Government warranty

9. Extra discount if you say you plan to drive your GM car sleeveless

8. Next year, GM Execs get to watch Super Bowl, in the White House, with the President

7. GM employees' children get to play on that great swing set at the White House

6. GM cars, with doors open, about the same span as Presidents' ears

5. Bonus Bonus - When you buy a new GM car, before you drive off the lot, Rick Warren comes and gives it an Invocation

4. Safer Roads - To purchase a GM car, you have to go through a vigorous vetting process

3. GM Executives can now use Air Force One to fly to meetings

2. All GM models will come with Teleprompter installed, as standard equipment

1. Any problems with your GM car? ... Blame Bush!


Bonus Mister Goodwrench President Riffs

Sam Youngman and J. Taylor Rushing: President Obama’s auto plan throws lawmakers

Conor Clarke: Is Obama's Auto Plan "Unprecedented"?

The Anonymous Liberal: Does the Press Corps Understand What Bankruptcy Is?

DownWithTyranny: Is GM Headed For Bankruptcy Afterall?

Megan McArdle: Whither GM?

What's Good For Tesla Motors ...

What's Good For Tesla Motors ...

So, it seems, the Obama Administration is going into "Good Cop/Bad Cop" mode, under a dangling light bulb, whacking General Motors and Chrysler with telephone books, while lounging around with, giving coffee and smokes, to the Fat Cat Greed Heads on Wall Street.

They sent a Clemenza-like character to Detroit and the word back from the trip is "Oh, Rick Wagoner, you won't see him no more,"



And the Fat Cat Greed Heads of Wall Street are probably thumbing through their Blackberries, as they wait for Obama, and Secretary of the Treasury Timothy "What's that, Lassie? (Woof, woof!!) Timmy Geithner's in the well?!!" Geithner to deliver the cash, to find the number of the cleaning company, to start getting those summer homes opened up, scrubbed nice-and-spiffy, and ready to rock for the Memorial Day barbecue.

Deb Cupples, over on Buck Naked Politics, has a good rundown on why the now former GM Chief Rick Wagoner gets the boot, but just as the news was settling on the rather forceful action by Obama, more-and-more posts are popping up, questioning the double-standard of handling Detroit, versus Wall Street.



Here's a big hint - Larry Summers didn't worm his way up from the Motor City.

A big H/T To Joan Walsh for helping to point to the answers;

Krugman isn't the only smart person raising these concerns. If Evan Thomas' smug tone in the Newsweek piece turns you off, take the time to read Simon Johnson's terrifying Atlantic piece, "The Quiet Coup," which lays out the foundation of our current mess and then comes to similar conclusions as Krugman about the drastic steps needed to recover: The government must take over unhealthy banks, dramatically restructure them, save the ones that can be saved and later sell them back to private investors. (The piece was apparently written before Geithner's plan was released so it doesn't comment on it directly.)

[Snip]

Strangely, or not, on the same morning I read Johnson, a smart reader took the time to send me this 1999 New York Times piece about the way leading Democrats, including Clinton administration Treasury Secretary and Obama economic czar Larry Summers, hailed the repeal of Glass-Steagall, the Depression-era law that kept banks out of the insurance and broker businesses. It's as tough to read as Simon Johnson's piece, in its way.

Henry Blodget is scratching his head, as well, with his "Rick Wagoner Goes But Ken Lewis Stays?", while Frank James, on The Swamp, asks "Why no GM treatment for Wall Street?"

Robert Stein, on ConnectingTheDots, also, sees the double-standard;

The White House's willingness to take over GM is in sharp contrast to its hands-off approach to the banks in the plan to make toxic assets disappear. Does anybody in Washington know more about making cars than making loans?

The Detroit News editorialized today that "Dumping Wagoner lets Obama deflect attention away from Wall Street, where his Treasury Department is still moving through quicksand, and turn it on Detroit.

He can portray himself as being tough on the corporate executives who are ruining America, without having to draw blood from the bankers."

Elana Schor, over on TPMDC, in her "The Double-Standard Question Haunting Today's Detroit Announcement";

Here's how Rep. Thaddeus McCotter (MI), the third-ranked House Republican leader, put it to Reuters:

"Mr. Wagoner has been asked to resign as a political offering despite his having led GM's painful restructuring to date. Mr. Wagoner has honorably resigned for the sake of his company's working families.

When will the Wall Street CEOs receiving TARP funds summon the honor to resign? Will this White House ever bother to raise the issue? I doubt it."

And, Libby Spencer, on The Impolitic, has the gem-of-the-day, in her "General Motors Meltdown"

Dan at Pruning Shears voices my only objection in the quote of the day:

Responding to the looting of Wall Street by busting the UAW feels an awful lot like responding to 9/11 by invading Iraq

Are all roads leading to Tesla Motors?

But for all the sturm-and-drang being vented today, only Brad Friedman, on The Brad Blog, seems to be in possession of the Magic-8 Ball missing from the White House.

Tesla Unveils All-Electric Sedan, But Needs Federal Loan for Factory to Build It

So let's add one plus one here ...

[Snip]

So, if the federal government is currently bailing out the Detroit automakers, who have refused (and/or failed) to bring an all-electric car to market since GM abandoned the very popular EV1 in the late 90's, for reasons still-unexplained, and since Tesla is waiting for federal loan guarantees, why not put two and two together and give them the loans, but require that they use Detroit plants to build the cars, in hopes of avoiding the layoffs of thousands of Big Three autoworkers?

Here's the Press Release on that new Tesla Model S sedan (while Matt Nauman, of Mercury News, took the Tesla Roadster out for a thrilling spin).

Sounds like a plan to me.

Perhaps, will we come to the day of "What's Good For Tesla Motors, is good for the country?".


Bonus "Wall Street Good/Detroit Bad" Riffs

Steve M: OH, NOW IT'S "FASCISM"?

The Anonymous Liberal: Do Conservatives Understand How Bankruptcy Works?

Josh Marshall: Just a Thought

Yves Smith: Auto Company Plans Rejected by Task Force

Andrew Leonard: Why so hard on the Rust Belt, and so easy on Wall Street?