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Touting Success Or A Flim Flam?

Updated on July 29, 2012

More Redefining Success - "I Saved The Auto Industry"

Just the other day out in Ohio and Michigan Obama was once again beating his chicken chest about how he saved the American automobile industry. What he saved General Motors from is going through the necessary reorganization to actually become profitable once again. He also probably saved some over priced union jobs while at the same time costing the investors in the company to take a bath. Have to make those trade offs you know.

This is just another "story," as he likes to tell it, about how the auto bailouts have been such a success. His latest line has the auto industry "roaring back." This is what he said at a rally in Oakland, “I refused to turn my back on a great industry and American workers. I bet on American workers. I bet on American manufacturing. Three years later, the American auto industry has come roaring back.” I'm confused about whether he was talking about Government Motors or some other company, maybe Finnish automaker Fisker? The facts speak otherwise if he's talking about GM.

At one point it was contended that GM has repaid its bailout debt. That is far from the case. Even farther from the case than that is the spin that GM is roaring back. Lets talk facts once again rather than spin. General Motors still owes the US tax payer $27 billion dollars. $50 billion was extended and it has yet to repay 50% of the loan. It is paying bonuses as part of its roaring back having not repaid the US tax payer first? Ally Bank, it's financing arm, still owes $14.7 million for the tax payer bailout it received. The amount extended was $17.2 billion so do the math. If these are examples of a roaring back success then they need to take their foot off of the gas pedal. Ally was formerly known as GMAC.

The truth is that GM has been moving backwards. The proof is in the plummeting price of the stock, of which the US tax payer owns 32% of this company even to this date. It recently traded for $18.80 a share. In January of 2011 it was selling for $38.90 a share. That is quite a devaluation in short order for a company that is roaring back.

Doing all the tabulations places the US tax payer still on the hook for $42 billion three years later. Just to recoup our initial investment ($27 billion) the stock that we continue to hold would have to sell for $53.98. Now I'm not a math major but it seems to me that we're a long way from recouping our money as tax payers. Things seem to be moving in reverse and have nothing to do with an industry roaring back. It's all about context I'm sure.

"I Saved The Auto Industry" What A Joke!

This administration has been lying to the American tax payer for 3 years now. We already lost $2.9 billion on Chrysler though Obama promised that all of our money would be recovered, not just some of it. Maybe you don't remember the campaign video this administration had Tom Hanks star in entitled The Road We've Traveled. Hanks claimed in that video that both GM and Chrysler had repaid their loans. That is a totally false claim and a lie.

It seems much easier for the Flim-Flammer-In-Chief to parade around the country right now selling the false snake oil than to level with the US tax payer. For three years they've been lying to us and now he wants to tell us about roaring back. What I just stated can be verified. What Obama is spinning with the help of the Lames Stream Media cannot be.

How about the truth for a change we can believe in? You won't get it from Obama. I don't care who is doing the lying, what party they are from or who they "think" they are. We hire them and send them there and we can fire them if they can't do their jobs and do them honestly and truthfully. The lying to the American people needs to stop.

As Always,

The Frog Prince

Remember In November!

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    • 34th Bomb Group profile image

      34th Bomb Group 5 years ago from Western New York State

      P.S.

      Since GM cut 3,000 jobs in my little city I swore I would never again buy a GM product. The Regal was built in Germany.

    • teaches12345 profile image

      Dianna Mendez 5 years ago

      Good thoughts to remember come November. Thanks for sharing and reminding us of what has happened in this bailout.

    • 34th Bomb Group profile image

      34th Bomb Group 5 years ago from Western New York State

      Good for you Fred - I'm a sap for the latest sparkling number.

      This one, though, I can see myself keeping. (2011 Buick Regal - gorgeous )

    • profile image

      Ghost32 5 years ago

      Frog: Excellent Hub as always. I was fortunate (EXTREMELY fortunate) in that I made the decision in or around 2006 to keep the pair of vehicles we had at that time... literally "forever" (till I've no need of such things, in other words). One is a '96 GMC 4WD pickup (PRE-Obama GM) and the other an '01 Subaru Outback.

      Which doesn't help the auto industry, except in the Parts Departments, but it surely seems to be helping our family--and the cash saved (it's been less outlay to repair than to replace, by far) does help other folks. You know, those guys who sell us clothing, food, stuff like that.

      Plus, the vehicles and I know each other extremely well, which may have even helped avoid an accident or two over the years.

      Nope. Not trying to hijack the Hub. I'm actually getting to my point, which is to point out that the answer to drbj's puzzlement seems pretty simple: On average, far too many Americans are still looking for the flash and the razzle-dazzle, not wanting to believe they're pounding sand down a rathole if they vote for him again.

      In truth, all they'd REALLY need to "get it" would be to take a close look at his newest anti-Romney ads. When he's onscreen, positioned to your right (his left) with text on the other half, it's BLAZINGLY obvious he's NOT looking into the camera but off to your right (his left) at his TELEPROMPTER.

      No way to rely on a guy who has to do it that way or mumble "...uh...uh...uh...." all the time.

      Remember in November!

    • drbj profile image

      drbj and sherry 5 years ago from south Florida

      I cannot understand, Jim, why so many voters still cannot see that Obama is a genuine flim-flam, snake oil salesman. He promised us change and that is exactly what we have in our pockets - change, instead of dollars.

    • FitnezzJim profile image

      FitnezzJim 5 years ago from Fredericksburg, Virginia

      @MioCid. You give me too much credit if you think I can explain how come some regular cars achieve gas mileages very close to hybrids. As for why folks would pay more? Just how it is I'd guess, personal preferences, competition, and all the other factors that each of us will value differently, not everything has to have a reason that is understandable to all.

    • 34th Bomb Group profile image

      34th Bomb Group 5 years ago from Western New York State

      My town WAS General Motors. Now? We've lost a few thousand jobs (it's a small town) and with the bailouts the Union people got protection but the white collar guys are left in the lurch.

      My friend worked for Delphi/Harrison Radiator for over 30 years travelling the globe. Then he retired.

      Now? He's f'n screwed. They're considering food stamps. Wouldn't THAT make obammy happy! Let's humiliate the white man who worked his butt off all his life, paid a bundle in taxes and now is hanging on to his home by his fingernails.

      Despicable.

    • bravewarrior profile image

      Shauna L Bowling 5 years ago from Central Florida

      My question all along, in addition to one I can't put in writing, is why has America not impeached Obama??? The fact he can't prove his citizenship is cause in and of itself, is it not?

    • WillStarr profile image

      WillStarr 5 years ago from Phoenix, Arizona

      None of Barack Obama's schemes are working because none of them stimulate the private sector economy. All of them are directed at a government sector, a union sector, or an environmental wish-list sector, and none of them will put a dent in a struggling economy.

      We all saw what Obama thinks of those small businesses who try to join the private sector, without first bowing and scraping to government!

    • The Frog Prince profile image
      Author

      The Frog Prince 5 years ago from Arlington, TX

      Will - That's exactly why Obama didn't want the unions to have to go into bankruptcy court. Their contracts would have had to be worked over. Many people just fail to see the bigger picture behind the fiasco.

      TFP

    • WillStarr profile image

      WillStarr 5 years ago from Phoenix, Arizona

      When government bails out companies like GM, it is actually bailing out the unions that bankrupted GM in the first place. The union/GM/Chrysler relationship has become so incestuous that those companies should be allowed to go bankrupt, so they can get out from under the union burden.

      All Obama did was put off the inevitable.

    • The Frog Prince profile image
      Author

      The Frog Prince 5 years ago from Arlington, TX

      davesworld - I haven't forgotten the Chevy Volt. A little while back I covered that fiasco. You can read about it here.

      https://hubpages.com/autos/The-Chevy-Volt-A-Bust...

      Just the video here is worth watching though GM tried to squash it.

      TFP

    • mio cid profile image

      mio cid 5 years ago from Uruguay

      @Fitnezzjim: since you brought up hybrids ,can you explain to me how come some regular cars achieve gas mileages very close to hybrids?why should we pay 15 thousand more for a hybrid if regular cars can get almost same mileage,shouldn't hybrid technology be more advanced by now?

    • FitnezzJim profile image

      FitnezzJim 5 years ago from Fredericksburg, Virginia

      A friend of mind cursed his Chevy Volt when we lost power here a few weeks back. He no longer had a way to recharge or get to work. It seems to me that the reliability of the Volt is dependent upon an infrastructure whose reliability is subject to weather. I'll stick with hybrids.

    • forlanda profile image

      Juancho Forlanda 5 years ago from US of A

      Davesworld...the Chevy Volt is what happens when government gets involved--a car that can only be driven a few miles, and can be bought at such a high price...that is why there is such a high demand for t... ;-)

    • Davesworld profile image

      Davesworld 5 years ago from Cottage Grove, MN 55016

      Ah, but you are forgetting the Chevy Volt. Obama gets a charge out of that one.

    • profile image

      Stu 5 years ago

      The auto bailouts were a disaster. Not only did the taxpayers take what looks to be a permanent loss, but senior creditors, who should have received a new issue of stock in bankruptcy court (in effect wiping out the original shareholders) never received what was due them, because normal bankruptcy law was "skipped." The feds simply handed GM and Chrysler billions of dollars to bail out union pension funds, and transfer much of the non-governmental equity to the workers (who of course never made any capital investment). I feel bad for the original shareholders, as they would have been wiped out in any event, and they of course did no wrong. But that's the risk of equity investment. But senior creditors have a legal covenant entitling them to first claims on the companies' equity should cash flow or tangible marketable equity fall short enough to lead to a default. Further, there is no program like the FDIC, where the auto companies were paying premiums for any type of federal bankruptcy insurance. The bailouts were just "forced gifts" from the taxpayers. Senior creditors and taxpayers got reamed, the unionized workers made out like bandits, and Obama bought himself more union votes with OUR money.

    • The Frog Prince profile image
      Author

      The Frog Prince 5 years ago from Arlington, TX

      mio - I won't tolerate people going off topic or personal attacks on users or authors but other than that I don't censor anyone. I'm known to be rather fair actually. If one wants to comment then they might try using FACTS to refute the FACTS I have outlined above. Those are FACTS, verifiable by the way, in the HUB.

      The Frog

    • mio cid profile image

      mio cid 5 years ago from Uruguay

      I'm not going to comment on your hub because you censor those who disagree with you.

    • Wayne Brown profile image

      Wayne Brown 5 years ago from Texas

      It does not take a genius to give away taxpayer funds. GM is no better company now than it was before and its soul and future are tightly squeezed in the hands of the union that can break its fragile back at any time and probably will. There are far more humble ways to highlight the choices which were made but one should never expect them out of this mockery of a leader. I would say that he did a "shade-tree mechanic job" on the auto industry...there's a term for that out there somewhere but let's not stir that pot. WB

    • breakfastpop profile image

      breakfastpop 5 years ago

      You have no idea how refreshing and cleansing it is to hear the truth, the whole truth and nothing but the truth! Up useful, interesting and awesome!

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