Now we know the reason why the Obama administration spurned General Motors’ offers to buy back U.S. Treasury stock until after the election.
In fact, there are 13 billion reasons.
Ironically, the GM losses will not negatively impact the TARP program’s bottom line because the banks that also received TARP money have paid back their loans with profit to the taxpayers. That is, Obama’s demon Wall Street banks are covering his keister on GM losses. You can’t make this stuff up.
GM’s losses, however, do not include the billions lost in Delphi salaried workers’ pensions plans that were gutted by the White House (even as UAW Delphi pensions were made whole) and billions more lost by pensioners (Indiana teachers and firefighters among them) when Obama’s White House Task Force illegally gave preference to Democrat-donating Big Labor over secured bondholders.
The share price further reflects the fact that GM continues to struggle with more efficient rivals unburdened by union contracts, government mandates forcing it to sell unprofitable green vehicles, and underfunded pension obligations.
“Almost a year and a half ago, Treasury could have sold taxpayers’ GM stake for about $30 a share. They wouldn’t. Shares are now down about 20 percent from then, resulting in an additional loss in value of about $3 billion for taxpayers,” reported the National Legal and Policy Center in scolding the White House decision last September not to sell immediately. “Treasury will continue to gamble taxpayer money on GM and continue to stay invested as they market-time their exit.”
“Unfortunately for America,” the NLPC concluded, “the gains they seek by the gamble are political rather than monetary.”