Looks like GM was operating even worse than I thought:
Mr. Wagoner had managed the company through some of its most difficult moments. The company hasn’t logged a profit since 2004, reporting losses since then of $82 billion. It nearly ran out of money at the end of 2008 before the Treasury Department provided emergency loans. GM’s stock was trading above $70 when Mr. Wagoner took over as CEO in June of 2000. Shares closed last week trading at $3.62, placing the company’s market capitalization at $2.21 billion.
There’s a reason automakers like GM and Chrysler are begging the federal government for help to stay afloat. Two of them actually. First, they need A LOT of money. About $22 billion between the two automakers. Second, and this one’s key here so pay attention, there is no bank in their right mind that would ever give them that kind of money.
And so here we are today, with President Obama laying out new guidelines GM and Chrysler must meet in order to receive another billion dollar bailout.
Of course, conservatives were quick to bring up fears of government controlled auto industry and more “government intrusion.” But this, aside from being wrong, misses the point.
What’s the Real Issue Here?
When the government unilaterally tells a business to act a certain way without cause or compensation, thats a form of government intrusion. When a corporation begs the government and American taxpayers for emergency funds to keep their business alive, that’s a bailout. Read this and repeat it to yourself aloud. Take a deep breath and let it sink in because there’s a fundamental difference between the two.
GM and Chrysler are asking the American taxpayers for more money than any one of us is likely to ever see in our lives. They owe the American public a justification for recieving another bailout. If a business or an individual has to meet certain preconditions for a loan, why shouldn’t a corporation who hasn’t turned a profit in 5 years have to as well?
In the case of GM and Chrysler, the situation is simple. Either you oppose bailing out the two automakers and you’re proposing an alternative that I’m waiting to hear. Or, realizing the crippling damage the collapse of two US automakers would create, you support extending additional low interest loans to GM and Chrysler.
Assuming you fall into the later category, why wouldn’t you impose certain preconditions on another loan? I suppose we could just throw money at the problem and hope it works itself out, silly liberals, but that quite frankly is the stupid hands off approach that lead us to this economic recession in the first place. Not to mention the stupid hands off approach thats causing GM and Chrysler to seek even more in federal funds.
So please, spare me the lame overused talking points about “government intrustion” “free markets” and other bullshit the House GOP is having their interns write. If the automakers don’t like these terms they’re free to take their sterling credit and excellent business model to a bank and apply for the loan there.