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President Barack Obama says recent economic "headwinds" at home resulted from high gasoline prices, the Japanese earthquake and Europe's financial crisis.It remains to be seen if the American public thinks that propogating the bailout culture of George W. Bush and Barack Obama is something to be rewarded. But please, remember: the taxpayers are taking an enormous loss on this. Even the Obama Administration thinks that the net loss to taxpayers for bailing out the car companies will be around $14 billion. And if anyone has an incentive to massage the numbers to make them look better than they actually are, it's the Obama Administration.As inspiration for a broader recovery, he's citing the American auto industry's resurgence.
The White House has spent almost every day this past week drawing attention to the industry comeback and taking credit for Obama's unpopular decision to bail out Chrysler and General Motors and guide them through bankruptcy in 2009.
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If, as the Obama administration likely argues, you're concerned about "the workers," this seems like a very, very inefficient way to go about this. As Megan McArdle notes,
To put that in perspective, GM had about 75,000 hourly workers before the bankruptcy. We could have given each of them a cool $250,000 and still come out well ahead compared to the ultimate cost of the bailout including the tax breaks--and over $100,000 a piece if we just wanted to break even against our losses on the common stock.
So go ahead, Mr. President. Tie your horse to the auto bailouts. With over 9% unemployment and a widespread impression that the auto bailouts were solely for the politically powerful auto workers' unions, good luck.
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