During his speech to the Business Roundtable at the Newseum in Washington, DC, on Tuesday, Pres. Obama touted the auto bailout for saving the industry in the U.S. He suggested to the CEOs in the audience that their industry could be next.
And, that’s exactly what I fear.
Addressing the Business Roundtable, an association of chief executive officers of leading U.S. companies with over $6 trillion in annual revenues and more than 14 million employees, Pres. Obama declared victory for the industry he bailed out:
“The good news is, over the last two years, businesses like yours have created over 3.7 million new jobs. The American auto industry has come back.”
Then, while warning that American manufacturing will never again be what it once was, Obama said that other manufacturing industries could face the same fate as the auto industry:
“What's happened in the auto industry can happen in other areas, and we've got to make sure that we understand even though manufacturing will not be the same percentage of our economy as it once was, it still remains this incredible multiplier for services and consumers and prosperity all across America.”
So, what happened in the auto industry Obama bailed out could happen in other manufacturing sectors? Is that a good thing?
Let’s look at what “happened in the auto industry” Obama bailed out:
- Govt to Lose $14B of Auto Bailout Funds: “The Obama administration said Wednesday that the government will lose about $14 billion in taxpayer funds from the bailout of the U.S. auto industry, a third of the loss officials had initially estimated.”
- Boehner: GM Bailout Hurt ‘Tens of Thousands’ of Americans: “When you look at the people who lost because of the government’s actions, we’re talking about tens of thousands of Americans who were punished as a result of the government’s action.”
And, speaking of how other industries might benefit from Obama’s “help,” let’s not forget TARP, the bank bailout:
- CBO: TARP Bank Bailout to Cost Government $19 Billion: “The Congressional Budget Office estimates that the Troubled Asset Relief Program (TARP) – the bank bailout package passed in October 2008 – will cost taxpayers approximately $19 billion.”
And, GM still isn’t out from under the thumb of the Obama administration, since the government still has ownership in the company.
According to AP: “The government owns 500 million shares of GM, which it got in exchange for the $49.5 billion bailout. Through earlier stock sales and loan repayments, the government has recouped about $22.3 billion of that money.”
“The remaining shares would have to double in price and sell for around $53 for the government to get back the rest.”
Which leads us to this question: Is Obama’s claim - that other industries could be next - a promise, or a threat?
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