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EDITORIAL: Obama: Let’s take over every industry
Auto bailout is not a model for economic success
Question of the Day
First President Obama said “the private sector is doing fine.” Then he lectured business owners, “you didn’t build that.” Now he wants to extend the government’s auto-industry takeover across the board. Mr. Obama simply cannot understand how the economy can function without government’s firm guiding hand.
At a campaign stop in Pueblo, Colo., on Wednesday, Mr. Obama touted the alleged success of his government-backed takeover of two-thirds of the domestic car business. “The American auto industry has come roaring back,” he said. “Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.”
The Obama administration ritually flaunts the General Motors bailout as its model of success, but “government motors” is actually a cautionary tale. The bailout cost taxpayers around $100 billion, which means the government coughed up around $780,000 for every American GM job that Mr. Obama claims he “saved.” The feds hold 500 million shares of GM stock, which has plummeted almost 45 percent since its initial public offering.
Believing in GM’s resurgence is only possible through creative accounting. GM counts a car as “sold” when it arrives at a dealership, not when it is in the hands of a consumer. The increased “sales” the administration brags about are surplus cars sitting in dealer lots, a practice known as “channel stuffing.” In a healthy economy, dealers have approximately a two-month inventory on hand; GM now has over double that. So long as GM pumps out cars that are “bought” by dealers, Mr. Obama can continue to claim things are looking up. Of cars that are actually driven off the lot, many are being bought by the majority stockholder: the government. In June, government purchases of GM cars went up 79 percent. This is a Ponzi scheme, not an economy.
Mr. Obama claims he should be given four more years because, “we’ve got too many good jobs we’ve got to create.” But his persistent failure on the job front is the best argument to give someone else a chance. His “stimulus” program, which promised to create millions of jobs, channeled almost a trillion dollars to Obama cronies without reaching any of its stated employment objectives. Obamacare, which was supposed to control health care expenses, is a trifecta of failure that will increase costs, raise taxes and kill jobs. Other Obama-favored projects such as Solyndra were pricy failures the president now refuses to mention.
Republicans “don’t have a plan to create more jobs,” Mr. Obama claims. “They don’t have a plan to revive the middle class. I’ve got that plan.” So far, though, Mr. Obama’s plan has produced a stagnant economy, the highest sustained unemployment rate of any post-war president, soaring public debt and a declining middle class. His response — putting even more of the economy under government control — will only make things worse.
The Washington Times
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