(As promised, we are re-running this post from just over two years ago to remind everybody of just what an odious sham were the auto bailouts and in specific the manner in which the TARP funds (funds, by the way, that were never intended for the auto industry in the first place - remember, they were tabbed for the financial sector, only) were paid off. The thuggish history of this administration and its enablers needs to be recalled as often as possible prior to the November elections.)
(Please scroll to bottom for update)
So, General Motors and its folksy CEO, Ed Whitacre, have paid off GM's TARP bailout money? What an incredible turnaround. If by "turnaround", though, you mean paying off your Visa card debt with your Mastercard.
All evidence points to the fact that GM is using a separate TARP line of credit to pay off its primary TARP debt.
During an April 20 hearing on Capital Hill, Sen. Tom Carper, (D-Del.) asked some pointed questions of Neil Barofsky, the “special watch dog” on the Wall Street Bailout, aka, TARP.
It’s good news in that they’re reducing their debt,” Barofsky said of the accelerated GM payments, “but they’re doing it by taking other available TARP money.”…
“It sounds like it’s kind of like taking money out of one pocket and putting in the other,” said Carper, who got a nod of agreement from Barofsky.
“The way that payment is going to be made is by drawing down on an equity facility of other TARP money.”
Senator Charles Grassley (R-Iowa) went off on the Obama administration and the TARP shell game in a letter sent to two-time tax cheat and tax collector-in-chief, Tim Geithner using Barofsky's testimony to level the credible claim that GM was not using GM earnings to pay off TARP debt but rather TARP funds from an escrow account at Treasury to make the debt repayments.
From the letter:
When these criticisms were put to GM’s Vice Chairman Stephen Girsky in a television interview yesterday, he admitted that the criticisms were valid:
Question: Are you just paying the government back with government money?
Mr. Girsky: Well listen, that is in effect true, but a year ago nobody thought we’d be able to pay this back.
Unbelievable. Dude actually wants some sort of recognition that GM was able to pay off tax payer-funded debt with... tax payer funds.
This is the first acknowledgement that we are aware of a shadow TARP. As if the publicly-known TARP wasn't bad enough there is a subterranean TARP that is backing the initial TARP.
This simply re-enforces our sentiment that we will never in our lives purchase a GM or Chrysler product. These people are straight-up gangsters. There is no other word to describe them and their actions to deliberately deceive and forcibly misuse U.S. tax payer dollars.
We believe this instance provides sufficient cover to get your hate on.
H/T: Hot Air
(UPDATE #1): This time, we lie! Much like GM's false claim that they have paid off its TARP debt with actual earnings, there is no actual update.
We originally posted this over the weekend, when readership is down a bit but we wanted to resurrect it during the week to highlight the sheer audacity of General Motors. The federal government is entirely complicit in what we can only tag as gangster capitalism. The government takeover and bankruptcy proceedings that screwed over the secured creditors in favor of the labor unions was executed in a thuggish manner and now the GM/federal government partnership openly displays their contempt for the American public by running an ad during the NBA playoffs patting itself on the back for a job well done.
We may re-run this post again next week. And the week after that. Whatever we have to do to ensure that we never forget what little regard this administration has for your interests and your tax dollars.
Frank Rich, Paul Krugman and the rest of the intelligentsia of this country may disagree with the politics of those who have opposed the bailouts but that they cannot at least understand where this anger may be coming from, again, speaks to a widening disconnect in this country between the taste-makers and those who are actually footing the bill for this fiasco.
(UPDATE #2): Reason TV's Nick Gillespie takes about as much time to explain the shell game that is General Motor's "paying off" its TARP debt as the GM commercial.
Again, the sheer gall that Government Motors has in running this outright lie will compel us to update this regularly or repost from time to time whether or not there is an actual update.
(UPDATE #3): The nation's paper of record is now on the beat.
AS we inch closer to a clearer understanding of the products and practices that unleashed the credit crisis of 2008, it’s becoming apparent that those seeking the whole truth are still outnumbered by those aiming to obscure it. This is the case not only on Wall Street but also in Washington.
Truth seekers the nation over, therefore, are indebted to Senator Charles E. Grassley, Republican of Iowa, who in recent days uncovered what he called a government-enabled “TARP money shuffle.” It relates to General Motors, which on April 21 paid the balance of its $6.7 billion loan under the Troubled Asset Relief Program.
G.M. trumpeted its escape from the program as evidence that it had turned the corner in its operations. “G.M. is able to repay the taxpayers in full, with interest, ahead of schedule, because more customers are buying vehicles like the Chevrolet Malibu and Buick LaCrosse,” boasted Edward E. Whitacre Jr., its chief executive.
G.M. also crowed about its loan repayment in a national television ad and the United States Treasury also marked the moment with a press release: “We are encouraged that G.M. has repaid its debt well ahead of schedule and confident that the company is on a strong path to viability,” said Timothy F. Geithner, the Treasury secretary.
Taxpayers are naturally eager for news about bailout repayments. But what neither G.M. nor the Treasury disclosed was that the company simply used other funds held by the Treasury to pay off its original loan.
The CBO estimates we will lose about $30 billion on the GM bailout. And in the article, GM officials are outrageously outraged that anybody would suspect that they are doing anything untoward with taxpayer money. Not that they are specifically denying doing anything untoward.
Greg Martin, a G.M. spokesman, said the company had made no misrepresentations about its repayment. “The bottom line is, our strong business performance has put us in the position that we don’t need these funds,” he said, referring to the cash in the escrow account. “G.M. is performing much better than anyone expected and that does represent a significant milestone for the company.”
And Ron Bloom, senior adviser to Mr. Geithner, bristled at Mr. Grassley’s criticism. “The Treasury Department has tried to be as straight as humanly possible,” he said in an interview. “We have never not been clear about exactly what we paid, exactly the terms of the investment. I’m finding it hard to find anyone obfuscating about this.”
They don't need the (TARP) funds... except that they need the funds to pay off the TARP debt.
We'll spare you the righteous indignation this time around because it's all there in black and white. A nice big F-you from General Motors leadership to the U.S. taxpayers.
And you all thought Enron was bad.