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Celebrating the company’s Wednesday initial public offering,President Barack Obama last night called his government takeoverof General Motors a “success story.” “American taxpayers are nowpositioned to recover more than my administration invested inGM,” he said. Left unsaid is the fact that if the ObamaAdministration keeps selling their GM stock at the IPO price, theU.S. taxpayer will lose $10 billion on the deal, and that doesnot include the loans GM still owes, cash for clunkers, the ChevyVolt subsidies, or the millions of unseen costs the unprecedentedintervention has inflicted on our economy.
No matter what you hear from the President’s defenders, alwaysremember that it did not have to be this way. As late as April30, GM’s bondholders were willing to take a 58 percent equitystake in the company in exchange for canceling their $27 billionin unsecured GM bonds. But under their deal, the federalgovernment would have had no control over this new company, whilethe United Auto Workers union would have received a minorityshare of the company and the taxpayers would have been protectedas a secured creditor. An even better outcome would have been forthe federal government not to have supplied taxpayer cash at alland let all creditors take their lumps from an unbiasedbankruptcy judge. But President Obama just couldn’t keep hisgovernment out of it.
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