Fox Business News correspondent Charles Gasparino attacked the government's role with General Motors by comparing it to the 2009 stimulus, also known as the American Recovery and Reinvestment Act, which he falsely described as an "utter failure."
During today's edition of Fox News' Fox & Friends, Gasparino suggested that GM wants the government to sell its stocks because the Obama administration is "particularly bad at central planning" and has made GM "not a great company now, no matter what they say." Gasparino continued, "I mean, you've seen what they did with the stimulus package -- complete, utter failure."
History tells a different story about the government-sponsored auto bailouts. Starting in December 2008 and ending in June 2009, the federal government loaned the auto industry $85 billion. Shortly after the money was loaned, the auto industry began its recovery and steadily added more jobs; sales of the Big Three automakers (GM, Ford, and Chrysler) are now, reportedly, "surging." Specifically, General Motors business was up 10 percent this month including all four brands posting higher total and retail sales compared with a year ago. From the September 4 GM sales report:
These sales in turn have resulted in more jobs for American workers. The Toledo Blade reported:
GM announced plans for two investments totaling $343 million in its Toledo Transmission plant and a $47 million upgrade of its Defiance Powertrain plant. At the Alexis Road facility, also known as Toledo Powertrain, GM officials have said they expect to add as many as 650 jobs this year, including up to 150 in the first quarter. This is the first time in a decade that Toledo Transmission is hiring workers new to GM.
In a report last year, the White House claimed more than one million auto industry-related jobs would have been lost if GM and Chrysler had not been saved. And experts point to the government for this turn around:
"It's been a phenomenal turnaround for the Big Three," Michelle Krebs, an analyst with researcher Edmunds.com, said in an interview. "Chrysler and GM have the American taxpayer to thank for that, but in the end, it's been a good investment."
Despite what Fox says, the auto bailout was a huge return on taxpayer investment. The Economic Policy Institute explained that "federal taxpayers are likely to recoup most or all of their investment in GM, and will enjoy a net gain of at least $61 billion on their $5 billion to 7 billion investment in the auto industry recovery plan."
In addition, the stimulus itself was far from a failure. A November 2010 report by the nonpartisan Congressional Budget Office (CBO) estimated that as of the third quarter of 2010, the stimulus increased the number of employed people by between 1.4 million and 3.6 million, and lowered the unemployment rate "by between 0.8 percentage points and 2.0 percentage points," compared to what would have happened in the absence of the stimulus.
Another report by private analysts at the Council of Economic Advisers (CEA) estimated that the stimulus increased employment by 2.1 to 2.5 million. The CEA report also estimated that the stimulus "has raised the level of GDP as of the third quarter of 2010, relative to what it otherwise would have been, by 2.7 percent." One chart showed that the stimulus boosted GDP between 2.1 and 3.5 percent: