Driving to Delusionville - Reason Magazine

Driving to Delusionville - Reason Magazine: "The former Obama auto czar, Ron Bloom, was on Capitol Hill last week telling Congress what a grand bargain the auto bailout has turned out to be for taxpayers. (His testimony should be on the Syfy channel.) But much was missing from his story that he might have heard if he had hung around for the next panel. (Full disclosure: I was on it.)

The story that Bloom told, and that President Obama is making the signature theme of his re-election campaign, goes like this: If the administration hadn’t infused $80 billion into GM and Chrysler, the companies would have hemorrhaged to death. Financial markets, themselves in panic mode, would not have given them the funds necessary to restructure through Chapter 11 bankruptcies and stay in business. Hence, they would have had to shut their factories, sell their assets for scrap and liquidate. And this would have bankrupted auto parts suppliers, shut down dealerships, laid off 1 million workers—whose pension and unemployment benefits taxpayers would have had to foot -- and devastated entire communities. GM and Chrysler may never repay taxpayers in full. But any loss is less than the cost of this economic Armageddon."

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