Thursday, June 9, 2011

Chrysler bailout a success? NOT!

We have heard both the Harper and Obama administrations use the Chrysler bailout as an example of successful government intervention, both claiming that Chrysler has paid back the bailout loans, in full and all those "jobs were saved".

Mark Milke and Milton Friedman beg to differ:
Milton Friedman once said his greatest fear about the 1979 U.S. government bailout of Chrysler was not that it would fail, but that it would succeed. Chrysler's rescue, he said, might lead some to draw the wrong conclusion -that such actions save jobs.
... Industry Minister Christian Paradis on Wednesday: that Chrysler paid back its entire loan from taxpayers ... "in full and ahead of schedule."
Actually, Paradis is widely off the mark. Chrysler repaid just $1.7-billion of the $2.9billion loan from 2009, or just 59%. The remaining $1.2-billion will never come back  ...  something his colleague, Finance Minister Jim Flaherty, publicly admitted last week. ...  Chrysler before bankruptcy reorganization absolved the "new" Chrysler of past debts.
... let's examine the notion that Chrysler's repayment of 59¢ on the dollar is somehow proof positive that government intervention worked. ...
[...]  Read the whole column.


CanadianSense said...

The media and opposition are to blame as they are onside with the endless corporate welfare for the automakers.

Filing for chapter 11 by GM/Chrysler wiped of Billions in loans from prov/fed govt.

JR said...

That's right. The opposition, egged on by the media, pretty much insisted on "stimulus" spending and bailouts. But I wish the Conservatives would be upfront about what actually went on.

Anonymous said...

These bail-outs remind me of the insane logic behind the Foreign-Aid money pits.

It's like a cop telling me I should be happy that my store was robbed of $3000.00 by some punk because they may return one day to buy something from me.
So basically, I gave a bag of money to GM and Chrysler in hope that the workers may shop at my business and buy canadian-made goods as they expect me to do.
But the reality is that the CAW members fill their home with imported Appliances and Electronics made from slave-labour and sold a low-wgae box stores , then they cry to us to fill our garages with CAW cars.