Booman Tribune, via AlterNet:
GM Bailout Saved Millions of Jobs and Republicans Hate it... is alive and well, thanks to the Democrats and President Obama. What industry, you ask? The American automobile industry:
Seventeen months after veering into bankruptcy, General Motors has become the unlikely darling of Wall Street, poised to complete an initial public offering Thursday that will fetch more than $20 billion and rank as one of the largest in history. (...)
The federal government seized the opportunity to recoup part of the bailout money it injected into the company in the spring of 2009. The Treasury agreed to sell at least $11.8 billion worth of stock, lowering its 61 percent stake in what has been disparagingly dubbed "Government Motors" to just under 37 percent, a senior administration official said. If underwriters take their over allotments, the Treasury will earn $13.6 billion and its stake will shrink to 33.3 percent. (...)
The administration noted Wednesday that the U.S. auto industry has added 77,300 jobs since GM and Chrysler emerged from bankruptcy, that vehicle exports are up more than 40 percent from 2009, and that the nation's Big Three car companies posted operating profits for the first three quarters of this year.
"Certainly this is a very attractive valuation compared to what most of us expected a year and a half ago," Rattner said. "When the dust settles, Treasury will be modestly out of pocket on GM, but in terms of the disaster averted, I think it was a very cheap form of stimulus. It helped the economy when the economy appeared to be in total free fall."
The investment in GM likely saved millions of jobs directly and indirectly, that would have been lost if the US government had allowed GM to die:
Should one or more of the Detroit Three fail in 2009, initially all U.S. automotive operations would be affected, including international producers and suppliers. In this scenario, the remaining Detroit Three and international producers recover in 2010. The first year total employment impact would be a loss of nearly 2.5 million jobs in the U.S. economy—comprised of 239,341 jobs at the Detroit Three, 795,371 indirect/supplier jobs and over 1.4 million spin-off (expenditure-induced) jobs.
Those millions of lost jobs would have been an significant number even in an economy as large as ours. The economic crisis we still face today would have been made much, much worse had the Federal Government led by Obama and the Democrats in Congress failed to act, and act promptly. ............(more)
The complete piece is at:
http://www.alternet.org/newsandviews/article/340648/gm_bailout_saved_millions_of_jobs_and_republicans_hate_it/
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