The U.S. Treasury Department announced on Monday that it had sold its final shares of General Motors stock, officially ending the government bailout of GM at a loss of about $ 10 billion to the taxpayers.
The Center for Automotive Research (CAR) in Ann Arbor, Michigan, published a study that is supposed to prove that the government bailout actually benefited the taxpayers, because the damage to the U.S. economy would have been far greater if no action had been taken by the government. This publication makes perfect sense when you consider it were the same authors from the same research center that issued another memorandum back in November 2008, warning that as many as three million jobs were at stake in the automotive sector unless the U.S. government acted to guarantee the continued operation of all Big Three Detroit automakers.
Two scenario’s: dreamed up and imaginary
In CAR’s 2008 memorandum “The Impact on the U.S. Economy of a Major Contraction of the Detroit Three Automakers”, economic impacts were estimated for two scenarios involving a short-term, severe (50- or 100-percent) implosion of Detroit Three production in the United States. A great way to manipulate statistics and report results to validate one’s point of view is to base the study on fantasized data from a hypothetical worst-case scenario; in this case the scenario that if one of the Big Three were to go bankrupt, they would take down many suppliers with them, as a result also shutting down the remaining two Detroit automakers and foreign automakers with U.S. factories and the entire rest of the supply chain. The projections of job losses were based on the assumption that all automobile manufacturers and suppliers nationwide would be lost. Wow! Does that seem at all likely to anyone? [Read more…]