Yesterday, speaking in Pueblo, Colorado, President Obama uttered the following unbelievable paragraph:
I said, I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back. Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.
There are two problems with this statement. The first is factual. The second is ideological.
First, the facts. GM has not come roaring back. In fact, when GM relaunched with its November 2010 initial public offering — after a government-shepherded bankruptcy process that saw the government destroy the pension benefits of non-union members at Delphi, screw creditors including outside union pension investment groups, and reward the auto unions that bankrupted GM in the first place – the stock sold for $33 per share. Now, the stock is trading at just above $20 per share. The American taxpayer is on the hook for some $35 billion. And there has been significant turmoil at the executive levels, with top marketing folks and others finding themselves on the golden-parachuted breadlines.
GM’s market capitalization is somewhere in the neighborhood of $32 billion. That means that the American taxpayers are essentially out more money than the entire company is worth. If we applied Obama’s logic to every industry, we’d be on the hook for more than the entire value of the GDP. In other words, we’d tax enough and borrow enough to bail out every single troubled industry, spending more on them than their entire value.
The entire GDP of the country is about $15.6 trillion. If we applied the same ratio of bailout-to-revenue to the country as Obama did to GM, we’d only have to spend about $17 trillion this year on bailing every industry out. After all, we do want to be fair, don’t we? In 2011, the federal government spent about $3.6 trillion. So just multiply our federal government spending by 472%, and Obama’s dream becomes a reality.
Which brings us to the ideological problem. President Obama, in this quote, moves from simple corporatism – the notion that the government should pick winners and losers in particular industries, which is nasty enough – to outright Marxism. Not every industry needs a bailout – but according to Obama, it wouldn’t be fair if some industries got bailed out while others didn’t. Everyone must be bailed out. Spread the wealth around, and everybody’s better off.
The veneer is off this Marxist presidential candidate. And he stripped that mask himself.