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Government Motors, or Obama Strikes Again

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Well, we taxpayers took it in the shorts as President Barack Hussein Obama and his minions have struck yet again. General (or Government) Motors (GM) announced on December 19 that it plans to buy back 40 percent of the company stock owned by the federal government; that’s we taxpayers. GM announced that it will buy back 200 million stock shares, currently held by the Treasury Department, for $5.5 billion, or $27.50 per share.

The GM stock price was, at close of business on December 18, about $25.50 per share. What’s the problem, you ask? Taxpayers got a premium of about $2 per share. We should all celebrate, right? Not so fast.

But (and there’s always a “but”) the price would have to be about $53 per share in order for we taxpayers not to sustain a loss, the so-called “breakeven” price. According to MLive.com:

As a result of GM’s buy back, the government has recovered about $28.6 billion of its $49.5 billion GM bailout, which means it will most likely lose billions when selling its remaining shares. The government would need to sell its remaining shares at a price of $69.72 to break even. That’s up more than $15 from earlier this year, when the U.S. Treasury would have to sell its 500 million remaining shares at about $53 per share.

So, GM is buying 200 million shares, and we taxpayers lose $25.50 per share ($53 – $27.50). That means that we lose $5.1 billion on the buy back deal ($25.50 loss per share * 200 million shares). The “breakeven” price keeps increasing. Does that mean that we taxpayers will, when the Treasury sells its remaining 500 million shares of GM, again take it in the shorts?

According to the MLive.com report, the US government expects to lose about $25 billion of the $85 billion originally approved for the GM and Chrysler bail-outs. But not to worry. The $25 billion is down from the 2009 expected loss of $30 billion. Happy days are here again. The expected loss is now only $25 billion.

Just so you know, Chrysler, which now has the Italian automobile maker Fiat as its majority owner, was bailed out for $12.5 billion. The Obama administration recovered $11.2 billion. Let’s see, I (as a conservative) will need some help with my math. The Chrysler deal left us taxpayers on the hook for $1.3 billion. Sure, that’s not very much when one considers that the federal government spends $11 billion each day (that’s $6 billion more per day than it takes in). So, to quote Senator Everett Dirksen (R-IL), “A billion here, a billion there, and pretty soon you’re talking about real money.” Dirksen was correct: the US has reached the “real money” point.

Just because the bailouts were initiated while George Walker Bush was president in no way gives Obama a pass on the current (and recent, in the case of Chrysler) financial shenanigans. Here is another opportunity for Obama to blame Bush.

Does this mean that Christmas came early for GM? This is yet another opportunity for Obama to play Santa Claus with taxpayer money.

But that’s just my opinion.

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  • Jet Gardner

    Warren-Warren-Warren! Only you and Weasel Zippers (who apparentlt did your math for you) could find fault with a major corporation paying back a loan that saved so many jobs!

    Only a ditto-head like you could find fault with GM getting the best deal toward paying back millions in favor of their bottom line—
    And you call yourself a republican???

    It was an eville plot that Hussein cooked up with a major corporation that he plans to raise taxes on-right?

    Hello boys and girls, can you spell deeluzshunal?

  • Re: comment # 1, Jet, Jet, Jet, leave it to you to miss (on purpose?) the point of my article. Obama plays rather freely with TAX money, regardless of the number of jobs “saved.” And how debt incurred with tax money is forgiven/ignored/not collected is the point. Besides, shouldn’t job saving be credited to Bush since he started the bail-out process? And I have NEVER said I was a Republican.

  • zingzing

    you’ve blamed obama for this whole thing for ages now. so when he works it out so we’re losing a little less, you blame him for the whole thing all over again. ok. what’s the point of this article? is it that you can’t come up with something new to complain about this week? you’re like someone’s mother-in-law.

  • Re: comment # 3, zz, you say, “… he [Obama] works it out so we’re losing a little less,…” That’s EXACTLY the point. What he has done would be just fine if he were working with money of investors who had a choice. But we taxpayer investors had no choice, no say-so in the bail-out settlement matter. There-in lies the rub. But I guess that logic was a bit too sophisticated for you to follow, so you must fall back on the mother-in-law argument.

  • And I have NEVER said I was a Republican

    Kudos for trying to distract us from the link to Weasel Zippers… They have some nerve copying your article before you published it!

  • Re: comment # 5, Jet, sorry, but the Weasel Zippers article had no impact on my calculations, which I did myself. Plus, I noticed that the Weasel Zippers article calculated only the per share loss. And I’m glad to see that you can still laugh when confronted with irrefutable evidence of Obama’s financial shennigans. About being a “ditto-head.” Guilty, I do listen to Rush Limbaugh. But, like the vast majority of ditto-heads, I draw my own conclusions, form my own opinion based on facts offered by Rush Limbaugh daily. You really should try thinking for yourself. And here is a challenge for you and all your liberal buddies: cite (don’t offer your opinions) even one untruth or false fact that Limbaugh has uttered. Sure, y’all may claim that Limbaugh lies, but history seems to always prove him correct, something y’all liberals cannot claim.

  • Jet Gardner

    Oh good-you took the bait and arrogantly didn’t read the link at the bottom of the abreviated Weasel zipper article that leads to your probable source… the Right-wing National Standard, which covers your ground more extensively-but only slightly more intelligently)

    Ditto headed copy cats never have original thoughts, they let Rush do that for them.

  • Dr Dreadful

    What he has done would be just fine if he were working with money of investors who had a choice. But we taxpayer investors had no choice, no say-so in the bail-out settlement matter.

    But you did have a say-so, Warren, on November 6th.

    As a corporate investor, you have some influence over how a company uses its assets, but not direct influence. You can’t just walk into the CEO’s office and say, “As a shareholder, I direct you not to sell off this part of the business”. And that’s right and proper, because why should your say-so count more than that of the two guys out in Reception who do want him to sell?

    So you either vote on the proposal along with thousands of other shareholders at a general meeting, or you vote for a board whom you and your fellow investors agree to entrust with making this and other decisions pertaining to the running of the company.

    Same with the country. In either case, you may not always get the decisions or leadership you would have preferred, but you do have about the same degree of influence.

  • He Who Must Be Banned

    Warren –

    Let’s see, I (as a conservative) will need some help with my math.

    Yes, apparently you do. Let me help you with that.

    You see, Warren, while you’re able to correctly figure out the direct profit/loss result of $25B in the red for the GM bailout and $1.3B for Chysler, you’re leaving out a whole passel of variables out of the equation. If you’d have included the rest of the variables, you’d have seen that the American taxpayer made a PROFIT on the bailouts – and a quite substantial one, at that.

    Is your head exploding yet? Hold on, look at the math first. Here’s the first missing variable:

    Four years later, there are 1.45 million people who are working as a direct result of the $80 billion bailout, according to the nonpartisan Center for Automotive Research, both at the carmakers and associated businesses downstream in the economy. Michigan’s unemployment level is at its lowest level in three years. G.M. is again the world’s biggest automaker, and both companies are reporting substantial profits.

    Hm. 1.45 million jobs saved, not only directly at the carmakers but also at the associated businesses downstream.

    Now let’s just suppose that the average salary for all those jobs is about $40/year – that’s significantly less than the average automaker gets, but significantly more than the average worker at area diners and retail outlets get. Now, let’s suppose that – after deductions – those workers actually pay only about 20% federal taxes (I really think I’m being generous to YOUR side on this one). That’s about $8K in federal taxes per worker per

    …or about, hm, lemme see, carry the two, um, eleven-point-six billion dollars in federal tax revenue per year that we would not have had if those jobs wouldn’t have been saved. That’s $46.4B – which, if we subtract the ‘loss’ of $26.3B that you so kindly pointed out, results in a PROFIT of $20.1B – roughly speaking, that’s a 43% profit!!!!

    And that’s not even counting the CORPORATE tax revenue that we wouldn’t have gotten, not only from the automakers that went out of business, but from all the other businesses that were hurt, too.

    AND IT GETS BETTER!!!! Because each and every one of those workers paid state and local taxes that kept up school funding, police and firefighters on the job, roads in good repair.

    BUT if we’d have just let those jobs go, you would have had 1.45 jobs gone…and that number doesn’t include the families those jobs provided for. So instead of these people having jobs and paying federal, state, and local taxes, most of them would have wound up on the federal, state, and local DOLE – food stamps, welfare, Medicaid. Property values would have fallen, and crime would have gone up.

    Yes, Warren, you did need help with your math after all. Next time, please make sure you include all the variables, hm?

  • He who… Warren only believes “facts” set down by people who he can copy their homework from (see comment 1 & 7 and follow the links.

    His only original thoughts come from Limpbaugh and Fox converted news

  • He Who Must Be Banned

    And for anyone who’s wondering, apparently Technorati allowed my comment…but made me think it was rejected by sending me directly to the “rejected ’cause we don’t like you” page…so please get rid of the duplicate.

  • He Who Must Be Banned

    Jet –

    It’s me – Glenn C. – this is just my personal protest against the “Ban-’em-all-and-let-the-CIA-sort-’em-out” idiocy that Technorati’s security dept. has become.

  • OH that explains how brand and 1 are getting through… they’re CIA agents spamming us!!!

  • Glenn,

    Technorati just own and manage the site but our comments system is completely independent of theirs – and largely automated.

    They are working to improve the performance and have been making changes to the underlying code even on Christmas Day, and again today.

    Your comments were actually caught by one of the two spam traps but fortunately it was the one I can free comments from not the other one.

    Hopefully things will get back to some semblance of normality over the next few days but, if you do get blocked again, please email me the IP address which is rejected.

  • Clenn Gontrarian

    Chris –

    On the off chance that you see this, I’m on a computer at the USO at LAX – waaaaaay different from any IP I’ve used before – and it’s still stopping me. It just blocked a comment I tried to make on Warren’s latest (ahem!) article.

  • Clenn Gontrarian

    But it let that last one through. First I was ticked, now I’m just frustrated.

    Whoever’s in charge at Technorati is not getting his money’s worth. He needs to find a different spam blocker. I’d suggest he go ask the people over at Ars Technica for some suggestions.

  • Re: comment # 9, He Who Must Be Banned, aka Glenn, leave it to you to completely miss and/or ignore on purpose the point of my article, and to try to obfuscate with yet another of your totally irrelevant rants. Perhaps you can learn from Dr. Dreadful, who in comment # 8 said, “But you did have a say-so, Warren, on November 6th.” Yes, regrettably he is correct. Now all of us income tax payers (all 52% of us) will take it in the shorts. Bend over. I predict that the fun has just begun.

  • Delusional people truly believe that anyone who doesn’t agree with them have missed their point when using facts to refute them.

    All of us are at a disadvantage when arguing with Warren because we have this inborn need to use logic and truth … and he is unfamiliar with both concepts.

    …it’s easier for him than facing reality

  • Zingzing

    The contents of #9 really mean nothing to you, Warren? Unless you believe that 1.5 million jobs would have sprung up out of nowhere… I don’t see how what Glenn had to say is “totally irrelevant.” perhaps you could explain how it is so. By only looking at one part of the whole, it seems that it’s you who is missing the point.

  • Zingzing

    Warren’s world war 2: hitler was an art student and a socialist, the end.

  • Glenn, you did take in the bit where I said email me any blocked IP addresses, right?