"'[W]hat we did with the auto industry,' President Obama told a crowd
in Colorado Springs, Colo., last week, "we can do it in manufacturing
across America. Let's make sure advanced, high-tech manufacturing jobs
take root here, not in China,"
The Washington Examiner's editorial board writes.
"For anyone who understands the nature of GM's 'success,' and of
Obama's previous attempts to prop up American companies like Solyndra
against Chinese competitors, this campaign rhetoric is somewhat
dispiriting. It serves as a troubling confirmation that Obama has
learned absolutely nothing from three and a half years of trying
unsuccessfully to reshape and reinvigorate the American economy through
bailouts and subsidies. Obama's industrial plan continues apace,
oblivious to the losses and failures it has created so far."
What does this mean for you?
*
"Within days of Obama's statement came the news that taxpayers are now
expected to lose $25 billion on the automotive industry's $85 billion
rescue. This represents an upward revision from the previous estimate of
$22 billion, yet it nonetheless assumes that GM is valued at $22 per
share as it was in late May. GM has since suffered a 40 percent decline
in profits year-over-year, a 3 percentage point loss of U.S. market
share year-over-year for the month of July and brutal press for its
flailing attempts to expand in Europe. The current GM share price is
just above $20, so the latest estimate is almost certainly too low
already."
* "Obama failed also to learn this lesson in the case of
Solyndra, the solar panel manufacturer whose bankruptcy cost taxpayers
more than $500 million in stimulus cash. In the spring of 2010, shortly
after Solyndra was approved for a federal loan guarantee,
PricewaterhouseCoopers found the company had already burned through $558
million in private investors' cash without ever turning a profit. The
loans were made despite this record of failure. Yet even with all of
this government help, Solyndra could not keep up with its Chinese
competitors."
The Examiner concludes: "It cost taxpayers half a
billion dollars for Obama to save a relatively small company from the
reaper for a few months. It has became a great political embarrassment
for Obama already but, as his remarks from last week suggest, not a
great enough embarrassment to teach him that propping up companies that
cannot succeed on their own is always a losing proposition."
