Once, twice, three times Pinocchio


It would be good, if it had been true, but the nose on Østupid’s face has been growing again, three times, just like Pinoccio :). This time it is the alleged repayment of bailout money by Chrysler. Hyscience has a summary of the article written by Glen Kessler from WAPO…..yes… did you see the name of the paper? Washington Post.

Fact check 1: 

“Chrysler has repaid every dime and more of what it owes American taxpayers for their support during my presidency — and it repaid that money six years ahead of schedule. And this week, we reached a deal to sell our remaining stake. That means soon, Chrysler will be 100 percent in private hands.”

The truth: Østupid is only counting the $8.5billion loaned under his administration, and not the $4billion loaned under the Bush Administration. It looks like there is a missing $4billion.

Under the administration’s math, the U.S. government will receive $11.2 billion back from Chrysler, far more than the $8.5 billion Obama extended.

Through this sleight-of-hand accounting, the White House can conveniently ignore Bush’s loan, but even the Treasury Department admits that U.S. taxpayers will not recoup about $1.3 billion of the entire $12.5 billion investment when all is said and done.

The White House justifies not counting the Bush money because, it says, that money was completely spent when Obama was making a tough political decision on whether to extend another loan. In other words, a decision to do nothing at the time would have resulted in the immediate loss of the $4 billion that Bush had extended.

This is chicanery. Under the president’s math, Chrysler paid back 100 percent of Obama’s loan and less than 70 percent of Bush’s loan. A more honest presentation would combine the two figures to say U.S. taxpayers got back 90 percent of what they invested. In fact, that is how the Treasury and other administration officials frequently portray it; it is just when Obama speaks that the numbers get so squishy.

Fact 2:

“All three American automakers are now adding shifts and creating jobs at the strongest rate since the 1990s.”

The truth:

The official Bureau of Labor Statistics data refers to the entire auto industry — including foreign auto manufacturers, auto parts manufacturers, auto parts dealers and auto dealers. If you look at the data, the 113,200 jobs added between June 2009 and May 2011 amounts to about a 5 percent increase — from a rather low base.

Yen Chen, automotive business statistical analyst at the Center for Automotive Research, says CAR’s analysis of Big Three auto data shows this statistic is correct. The Detroit Three are expected to add 10,000 hourly and 5,000 salaried workers this year, from a base of 115,805 hourly workers and 56, 432 salaried workers. That’s an increase of about eight percent in each case.

 “GM plans to hire back all of the workers they had to lay off during the recession.

This is another impressive-sounding but misleading figure. In the five years since 2006, General Motors announced that it would reduce its workforce by nearly 68,000 hourly and salary workers, creating a much smaller company. Those are the figures that generated the headlines.

Obama is only talking about a sliver of workers — the 9,600 workers who were laid off in the fourth quarter of 2008. About 4,100 were sent home for a few weeks. Another 5,500 were put on indefinite leave, meaning there were no jobs at the time for them. All but 1,000 have returned to work, and the rest should be back at work by year’s end, according to GM spokesman Greg A. Martin.

Fact 3:  This is the straw-man

“In the year before I was President, this industry lost more than 400,000 jobs, and two great American companies, Chrysler and GM, stood on the brink of collapse. Now, we had a few options. We could have done what a lot of folks in Washington thought we should do — nothing.”

This is quite a straw man — that many people wanted to do nothing. It was never so black and white. The debate was over the right course to take in the bankruptcy process.

The Wall Street Journal published Monday an interesting conservative critique of the government’s intervention by David Skeel, a law professor at University of Pennsylvania. Skeel says that the revival of the auto industry “is a very encouraging development,” but “to claim that the car companies would have collapsed if the government hadn’t intervened in the way it did, and to suggest that the intervention came at very little cost, is a dangerous misreading of our recent history.

The White House referred to comments from three Republicans and misstated those comments to mean that they would prefer to do nothing. It is, of course, not the truth. The alternative was to allow Chrysler and GM enter into a chapter 11 bankruptcy proceeding that would have allowed the company to restructure, and without the interference of the government.

The bailout to these car manufacturers was never going to work, because just like any other bailout, it does not go to the heart of the problem, one that allows for a restructure that would save the company in the long run. The government interference has cost the American taxpayer more than $1 billion that will not be repaid.

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