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Biden

Dear Editor:

A couple days before the Democratic National Convention, our intrepid vice president, Joe Biden, made a suggestion for a bumper sticker: “Osama bin Laden is Dead and GM is Alive.” Let’s take a look at General Motors and see where it is and what it has cost the American taxpayer since it was bailed out of bankruptcy in 2009 by the Obama Administration.

According to the Congressional Budget Office, the total auto bailout in 2009, including TARP money given to both GM and Chrysler, cost taxpayers $34 billion. At that time, the U.S. Treasury ended up with a 61-percent equity stake in GM and a 9.9-percent stake in Chrysler.

In September 2010, GM’s stock went public (the Initial Public Offering — IPO) at an initial offering of $33 per share. Following the IPO, the Treasury held a 26-percent stake in GM. At that initial share price, it will have to rise about 65 percent (to approximately $54 per share) in order for taxpayers to break even. As of 4 September 2012, GM is selling at a rather anemic $21 per share. On top of this, GM has just asked for $8 to $10 billion more to beef up liquidity and to refinance existing debt. And so it’s true that GM is alive, but it certainly is not very healthy and I don’t think its financial condition is anything one might want to trumpet (except for Joe Biden). Furthermore, at this rate, we taxpayers are going to have to wait a long, long time to get reimbursed for the bailout, if ever.

Since it was Biden who chose to contrast bin Laden with GM, I’d like to add this vignette: Documents recovered by the Navy Seals in bin Laden’s hideout revealed bin Laden considered Biden, “totally unprepared” to take over the U.S. presidency (in the event of Obama’s demise, presumably). Therefore, he did not include Biden in an al Qaeda hit list which included, among others, Obama and David Petraeus. Had I been bin Laden, I wouldn’t have included him either.

Gary Stansbury

This story was posted on September 13, 2012.