Most of America’s media think President Obama's 2009 bailout of General Motors and Chrysler was a huge success.
Former Massachusetts Democratic Congressman Barney Frank threw cold water on this meme on NBC’s Meet the Press Sunday correctly informing viewers that the auto bailout lost money for the federal government. By contrast, we made money from George W. Bush's 2008 bank bailout (video follows with transcript and commentary):
BARNEY FRANK, FORMER CONGRESSMAN (D-MASSACHUSETTS): First of all, many of the banks didn't want this money. It’s not that we did it for them. But secondly, the federal government made money on the advances to the banks. What cost us money was the automobile industry bailout. But we made money on the banks.
HENRY PAULSON, FORMER BUSH TREASURY SECRETARY: We got all the money back plus $32 billion.
Indeed. Meanwhile, the government’s investment in General Motors stock is still underwater.
Yet to liberal media members, Obama’s auto bailout along with his stimulus package are responsible for the economic recovery.
That might be convenient for the ego of the current White House resident, but honest economists in the future will likely credit Bush’s Troubled Asset Relief Program in October 2008 as being what saved us and the world from a far worse financial industry collapse paving the way for an expansion albeit a weak one.
What economically ignorant media members ignore is that the 2008 financial crisis was not economic. It was a banking and insurance company collapse.
Once the banks and insurance companies were shored up by TARP, the economy was positioned to recover with or without the auto bailout and the stimulus.
With that in mind, it sure was nice to see a Democrat admit that the government lost on the auto bailout but profited from TARP.