Some of the big business news today is GM posted record profits for 2011.
That’s great. Only problem is the American taxpayer, you and me, still own 27% of the company. Did YOU get a GM profit-sharing check in the mail? I didn’t. GM still owes the taxpayer, or more specifically the US government around $46 billion. That’s a lot. For comparison, their record profit was only $7.8 billion.
It’s going to be a loooooonggg time before GM pays back the government for their little bailout. Both Bush and Obama threw billions of taxpayer dollars at GM as part of all the crazy bailouts, something I was against and still am, and that applies to banks as much as auto companies. I’m a capitalist. That means when companies screw up, they should go out of business. They certainly shouldn’t have the government put a gun to your head and pull money out of your wallet so give to big companies. Plus, it’s a extremely hypocritical to talk about how horrible it is that the government bails out big banks and corrupt bankers, and then turn right around and say it’s “okay” for them to do it to General Motors.
“But what about all the people who would have lost their jobs if GM had gone under?” you ask.
If no bailout had occurred GM would not have vanished off the face of the Earth. Worst case, it would have gone bankrupt, but that doesn’t mean all those jobs and facilities and equipment suddenly vanish. It means other businesses would have stepped in and purchased those assets and redeployed them. Yes, jobs would have been lost, but many (if not most!) of those jobs would have been just fine. Those people would continue to do the same work…just the company name on their paychecks would have changed (though even that’s not guaranteed since the General Motors name itself has value).
Let me also remind you that in a free country, you have the write to whip out your checkbook and write a check to any failing business you like. If you really want to bail out a big auto company (or big bank, or big airline, or whatever), no prob. Write ’em a check and feel good about it. You just don’t have the right to force your neighbor to do so. At least not if you want to live in a free country.
Eh…it’s much easier to scream doom and gloom and knee-jerk react by throwing money at the problem. Thanks Bush and Obama. And you’re welcome GM!