FOD 2011.06.06

Facts - we don't need no stinkin' facts. We'll just say what we want and the media will fall in line behind us.

President Obama and his union allies have decided that the 2012 reelection will prominently feature a defense/justification of the General Motors and Chrysler bailouts. This nascent effort included Treasury Secretary Tim Geithner's op ed in the Washington Post this week, which was both inaccurate and ill-timed.

Geithner's op-ed was also noteworthy because it came the day before GM's stock price plummeted on disappointing May sales numbers. Year-to-date, GM is selling more cars than last year, but its sales were down year-over-year for May. And it is selling all those cars only by offering incentives more than 50 percent more generous than the industry average. The company has now lost more than 10 percent of its value since its IPO just seven months ago, and its stock is off about 25 percent from its peak in February.

Actually, GM isn't really selling that many cars. It's using a bookkeeping trick called "channel stuffing" to artificially inflate sales figures.

The phrase "stuffing the dealer channel" describes a method that automobile manufacturers use to pad their sales numbers. They deliver vehicles to dealers, count them as sold, but until actually (purchased) by customers, the cars just languish on lots.

However, obama and his handlers don't let little things like facts and the truth get in their way.

The White House has spent almost every day this past week drawing attention to the industry comeback and taking credit for Obama's unpopular decision to bail out Chrysler and General Motors and guide them through bankruptcy in 2009.

Technically, George W. Bush initiated the bailouts in 2008. Obama merely continued and expanded them But that's another one of those pesky fact things that obamamaniacs blithely ignore. Here's a few more.

Obama's address did not mention the bleak unemployment numbers announced Friday for the month of May. The Bureau of Labor Statistics said the economy last month created only a net 54,000 jobs and unemployment inched up to 9.1 percent.

Also note this comment from the president, which he has probably forgotten, or that he hopes everyone else will forget:

President Obama, July 29, 2010: “We are going to get all the money back that we invested in those car companies.”

Cut to last week's report from the government's National Economic Council:

 ... the government will lose about $14 billion in taxpayer funds from the bailout of the U.S. auto industry.

Brace yourself. Here comes the spin.

... officials said that figure is down from the 60 percent the Treasury Department originally estimated the government would lose following its $80 billion bailout of Chrysler and General Motors in 2009.

Got that? It's good news because taxpayers are out 'only' $14B, not the $48B originally estimated. Only in obamaworld is a $14B loss a good thing.

The report's release coincides with the administration's efforts to tout the bailout's role in the revitalization of the U.S. auto industry after last week's announcement that Chrysler is repaying $5.9 billion in U.S. loans and a $1.7 billion loan from the Canadian government. Those payments cover most of the federal bailout money that saved the company after it nearly ran out of cash in and went through a government-led bankruptcy.

Most, but not all. It's the same story at GM.

GM previously announced that it had repaid a little more than half of the $50 billion it received in federal aid.

Treasury Secretary Timothy Geithner said U.S. auto companies are now at the forefront of a comeback in American manufacturing.

"While we will not get back all of our investments in the industry, we will recover much more than most predicted, and far sooner..."

To summarize, we the taxpayers have lost billions of dollars as a result of the bailouts. GM and Chrysler sales remain stagnant. The media trumpets how obama saved the auto industry. 

Sigh...