President Obama Touts “Success” of Auto-Bailout

Last week, President Obama continued his propaganda filled Summer of “Recovery” tour by touting the “success” of the auto-bailout in Detroit. According to Obama, the growth of the auto industry has proven that the auto-bailout worked as planned,

You are proving the naysayers wrong. If some folks had their way, none of this would have been happening. They said, ‘You should just walk away and let those jobs go.’

A new White House report claims that the auto industry would have lost 1.1 million jobs without the bailout. White House press secretary calls the bailout a “success story” that has allowed the industry to re-hire 55,000 workers. While it is true that the bailouts helped automakers expand their payrolls, it also took away over $60 billion from taxpayers. Ultimately, the bailout prevented jobs from being made in other industries in the private sector.

Back in 2009, President Obama’s task force on the Financial Stability Oversight board reported that General Motors’ plan for the Chevy Volt would be too expensive to develop. According to the report, the plug-in hybrid electric vehicle would be “likely be too expensive to be commercially successful in the short term” and it will “be much more expensive than its gasoline-fueled peers.” Despite the high cost and likely failure of the Chevy Volt, the Obama administration continues to support the project with American’s tax dollars.

While visiting the General Motors’ Hamtramck in Michigan, Obama took a test drive in the new Chevy Volt expected to hit car dealers in November.  Although Obama called it “pretty smooth”, the car may not be worth its steep price tag. The Chevy Volt that is priced at $41,000 requires premium gasoline, can only fit four people and has less room that its competitors.  According to a New York Times article,

So the future of General Motors (and the $50 billion taxpayer investment in it) now depends on a vehicle that costs $41,000 but offers the performance and interior space of a $15,000 economy car… Quantifying just how much taxpayer money will have been wasted on the hastily developed Volt is no easy feat. Start with the $50 billion bailout (without which none of this would have been necessary), add $240 million in Energy Department grants doled out to G.M. last summer, $150 million in federal money to the Volt’s Korean battery supplier, up to $1.5 billion in tax breaks for purchasers and other consumer incentives, and some significant portion of the $14 billion loan G.M. got in 2008 for “retooling” its plants, and you’ve got some idea of how much taxpayer cash is built into every Volt.

This is not to say that plug-in hybrid electric vehicles are not a good investment. The private sector is likely to invest in these initiatives if there is a potential profit to be made. However, taxpayers should not be forced to invest in General Motor’s Chevy Volt. Since everyone values different features in a car, the government cannot possible know what millions of Americans want or need. For this reason, every single car should be subjected to true market forces so that consumers can decide what cars are best. If a car manufacturer does not provide cars that the American people want to buy, they do not deserve to be rewarded by an involuntarily taxpayer bail out. While Obama claims that “we going to get all the money back that we invested”, it seems that General Motors has not learned its lesson by producing expensive cars that are not likely to be “commercially successful in the short term.”