The current President’s defenders, aware of current economic weakness and the potential impact it could have in November, tend to claim that his actions have been successful in stabilizing major problems and protecting the interests of ordinary people. The intervention in the American auto industry is a frequently cited illustration.
The federal government’s intervention in the bankruptcy of General Motors, however, has not been a successful operation for the citizenry as a whole. Granted, certain GM employees benefited from the terms of the government’s purchase of the company. Other employees, however, fared poorly. Those people who had retirement accounts invested in the traditionally safe investment of bonds also were treated very shabbily by their government.
The final aspect of this allegedly successful government intervention in the private economy was GM’s supposed return to independent profitability and repayment of the federal infusion of taxpayer monies. But as we are learning, several billions of dollars of taxpayer funds have been gifted to GM. The company continues to receive favorable tax treatment due to the federal government’s special interest in its viability. Even with all those benefits from federal largess, the taxpayer investment in the company still includes a substantial decline in value, a several billion dollar loss taxpayers are unlikely to recover.
Yet in the view of those who want to defend the federal government’s intervention in the nation’s economy, this is counted as a success.