American taxpayers’ ownership of General Motors was halved on Wednesday, and billions of dollars in bailout money was returned to the federal government, as a result of the nation’s largest initial stock offering ever.
The offering, which raised $23.1 billion, is bigger and more ambitious than had once seemed possible. But the recently bankrupt automaker will have to build on its revival for the government to recoup its entire $50 billion investment and validate the Obama administration’s decision to keep G.M. from collapsing.
The idea that these policies were beneficial, simply based upon some of the money being returned through IPOs, needs to be placed into context.
Let’s start with this. Since 2007, revenues to the Fed. government have collapsed. This collapse was precipitated by a dramatic slowdown, which, in turn, was based upon a variety of factors. The key is that many of these factors could have been addressed prior to the collapse.
Instead, American governance is a freak show where we have an above the surface gridlock on any good policy, with a below the surface greasing of every stupid policy under the sun. This culminated in bursting asset bubbles, bailouts of rent-seekers, and a slew of morally hazardous policies that replace self-governance with “Czarism.”
Into this tragi-comedy of political idiocy, unemployment, and huge deficits, defenders of the bailouts point to a paltry few pennies returned to the treasury as a sign of “success” while ignoring the billions (or trillions, even) in lost revenues based upon bad government policies.
This is ridiculous. GM’s $33/share price is based upon a czarist edict waiving away taxes on bailed out entities. What some tout as a “return on investment” reads more like a scene out of Atlas Shrugged, where some people get bailed out based upon the “aristocracy of pull.”
There are far too many Republicans, conservatives, and libertarians who operate under the false theory that the well of our moral, social, financial and intellectual capital will never run dry. I think they are wrong.
The GM situation is evidence of deep decline, not of a “bailout” having worked.