GM: The Bailout and the Damage Done
Is the GM bailout truly a big success? With a third shift added, billions in profits, bonuses to employees, what could be bad, you ask?
Yes, the company is still in business, but only because of huge handouts, special tax treatment, and the ability to screw creditors. In other words, GM is sort of like the ethanol industry, kept afloat with other people’s money.
But let’s do an experiment. If the GM bailout is a success, what would happen if we replicated that “success” over and over again. If we lose money on each bailout, can we make it up on volume?
The lost money isn't the big downside of the GM bailout. It's the lost America that's the big risk. Coming to terms with how much damage has been done will take years to discern and absorb. Over the short term, I'd bet on the 'good news' not looking nearly so good after the November elections.