The face of TARP, writ in Government Motors

[unixronin]

Speaking of fail, here's the Washington Examiner again on the GM bailout.

One huge problem – and a crystalline visual aide of all that is wrong with TARP and government ownership - is GM Chief Executive Officer (CEO) and Chairman of the Board Dan Akerson.

Akerson is not – and never has been – a car guy. He himself said so. What is he? He is a DC-connected, Wall Street hedge fund big coin guy.

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Hedge fund guys are very fond of taking massive risks in pursuit of short-term profits.  And that’s fine - when they’re doing it with their funds.

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You’re seeing myriad examples of this fake-it short-term policy from the company – and from its Washington, D.C. masters.

Begin with President Barack Obama’s chairman of the Council of Economic Advisers, Austin Goolsbee, announcing in late February that the government will seek to sell its GM shares as quickly as possible.  Which – to no one’s surprise – caused a dip in GM’s share price.

Which currently sits - below its Initial Public Offering [IPO] price - at $33.  For We the Taxpayers/Shareholders to break even, it has to get above $54.

Which ain’t happening anytime soon - putting the lie to all this talk of We the Taxpayers/Shareholders making money on TARP.

To try to artificially pump up short-term sales, GM has been repeatedly slashing car prices and handing out purchase discounts well above the industry average.

As we saw with another government car giveaway, Cash for Clunkers, this only moves up car purchases that would have been made anyway.  Again – short-term vs. long-term.

Akerson, the article points out, has presided over two large-scale bankruptcies already, Hawaii Telecom and XO Communications.  So hey, what's a third?  We shouldn't count it against him.  After all, it's not like it's actually in a business he knows anything about.  Right?