Joe Biden shared some insights about the GM bailout with the folks at Car and Driver in the October 2011 issue. Here are some excerpts from the interview:
C/D: It must be gratifying to see Chrysler pay off its government loans six years early. Where is GM in its payback schedule?
JB: GM is on schedule. They’ve paid back a significant portion. We will hold 33.3 percent of GM common equity, but the point is that 33.3 percent is worth something. So taxpayers have an asset. But the best news is GM is talking about hiring back essentially the last of the laid-off workers by year’s end. No one ever thought we’d get there.
C/D: You said the loss of GM and Chrysler would’ve killed a million jobs?
JB: One million, absolutely. The critics talk about, “Oh, the market would have balanced things out.” But that’s like saying, “In the long run, we’ll all be dead.” Had we not forced the car companies to reorganize, then given them help, well, the failure of the suppliers then could have caused Ford to fail as well. So this has exceeded everyone’s expectations.
C/D: Absent a simultaneous recession, would you still have bailed them out?
JB: I would have, just because I don’t accept this proposition that somehow the U.S. cannot handle a heavy-duty manufacturing capacity, that we should shift our focus to service industries. Look at Japan and Germany — their labor costs are as high as ours. Big countries have to be able to make big things. Have to.
There’s plenty more in that interview, including the VP’s car ownership history, newfound fascination with his brother’s CTS-V, and something about the Onion story that (fictitiously) had a shirtless Mr. Biden washing a Trans Am in front of the White House.
The GM Authority Take
We wholeheartedly agree with Mr. Vice President’s take on the bailout (ok, maybe it’s more than a “take”, given that the man was involved in the decision-making process). As our college economics professor would say, “A free-market economy is the best, until it’s not. That’s when it’s time for an exception called government assistance.”
In other words, the market isn’t capable of balancing some things out. But that’s a topic for another day.