On December 9, the federal government dumped the rest of its 30 million shares in General Motors, which had become known as Government Motors, for good reason. In 2009, the federal government bailed out the bankrupt automaker to the tune of $49.5 billion and once held 60.8 percent ownership in the company. The loss comes in at $10.5 billion, confirming what Special Inspector General Christy Romero told reporters in August: “There’s no question that Treasury, the taxpayers, are going to lose money on the GM investment.” It’s a very strange investment that loses more than $10 billion. For taxpayers to break even, according to a recent government report, GM stock would have to sell for $95.51 per share, three times the price at the time.
Jack Lew, President Obama’s Treasury Secretary, told reporters that the sale of GM stock was “one of the final chapters in the administration’s efforts to protect the broader economy by providing support to the automobile industry.” The Treasury boss can boast some bailout experience. Lew, a former chief operating officer at Citi Alternative Investments, a division of Citigroup, bagged a cash bonus of nearly $1 million just before a $301 billion federal government bailout of Citigroup. That bailout came during a time of job losses and economic hardship for millions of Americans.
The Washington Post touted Lew as one who “aggressively advocates on behalf of programs that protect the poor,” but holds “a belief that the nation must have its financial books in order.” Those books aren’t exactly in order with a loss of $10.5 billion on GM, and Government Motors is hardly the only loser. Don’t forget the $1.3 billion loss on the federal government’s $12.5 billion bailout of Chrysler. And the federal stimulus losses on Solyndra, Fisker and many others.
Happy holidays, taxpayers.