he Obama administration is using Chrysler's early payback of $5.9 billion in loans to declare success for the 2008-09 bailout of the U.S. auto industry. Chrysler and fellow bailout recipient GM are both profitable now, and, this May, for the first time since 2006, GM, Ford, and Chrysler earned the top three slots in U.S. auto sales, freezing out imports like Toyota. At the same time, Obama's National Economic Council said taxpayers will likely never see $14 billion of the $80 billion auto bailout — a much smaller loss than initial estimates, but still a big hit. Was the bailout worth the cost?
Obama deserves his "victory lap": Calling the government's "breathtaking" auto rescue "a success is like saying the cars at Indianapolis are fast," says Ron Klain in Bloomberg. Obama deserves credit for the political risks he took on, and the tough medicine he made Detroit swallow before he handed over taxpayer dollars. This federal intervention saved jobs and factories — plus a manufacturing tradition "more American than apple pie or hot dogs."
"Give Obama a victory lap for auto rescue"
This is how Obama defines success? "You can save just about any company if you throw enough money at it," and since we won't get $14 billion of that money back, this is a rather expensive "success," says Daniel Indiviglio in The Atlantic. If Obama needs to tout any bailout, why not the bank rescue, which will leave us $157 billion richer? Or he could just avoid the topic, since so "many Americans detest the very idea of bailouts."
"Campaigning on the auto bailout: Is it a good idea?
We don't know the full costs yet: "There are times when the government can and should intervene to protect vital economic interests," and this was one of them, says the Eugene, Ore., Register-Guard in an editorial. But even though this bailout "worked out better than nearly everyone expected," it isn't over, and the $14 billion isn't the only cost. Remember, the feds still own a big stake in both Chrysler and GM, and those stocks may never reach a break-even point for the government.
"Still bailing in Detroit"
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- What would a U.S.-Russia war look like
- What would a U.S.-Russia war look like?
- Why is it so expensive to build a bridge in America?
- What the collapse of the Ming Dynasty can tell us about American decline
- Why is American internet so slow?
- Here's proof that Justin Bieber is just as spoiled as you always thought
- The GOP must try to win over African-Americans
- 7 ways to be the most interesting person in any room
- What would a U.S.-China war look like?
- 22 TV shows to watch in 2014
Subscribe to the Week