Trump, Mnuchin Call For GM To Pay Back Federal Bailout
This illustrates nicely the double edged sword that is crony capitalism. Sure it’s “great” when it goes your way, but when circumstances change and politicians change, things might not be so “great”.
GM shouldn’t have been bailed out. As we’ve said in the past GM should have become GMC, Cadillac, and Corvette in 2009. That’s what the market was signaling. (Chevy trucks might have survived too. At least as a nameplate.) But, for political reasons that market adjustment, a very painful market adjustment of course, wasn’t allowed to happen. Instead taxpayers were forced to plow billions into things like the Chevy Volt and a bailout of worker pensions that were managed poorly.
In the end, after most of the dust had settled, GM still owed the taxpayers $10 billion. But this was forgiven by the Obama administration.
In the wake of the recent GM layoff news Government Motors was reminded of it’s forgiven debt by President Trump.
President Trump made his frustration with GM abundantly clear on Tuesday when he threatened to cut all EV subsidies to the Detroit carmaker. But on Wednesday both the president, this time joined by Treasury Secretary Steven Mnuchin, took the administration's attacks on GM to their next logical endpoint: Demanding that the federal bailout recipient return the $11.2 billion loss eaten by taxpayers from the federal bailout that the company received during the depths of the financial crisis.
We have the separation of church and state in this country. It’s too bad we don’t have the separation of business and state.