When all is said and done, taxpayers take a $1.3 billion loss on Chrysler bailout

Posted on July 22, 2011

Blue portrait (per Chrysler-Plymouth) of Chrys...

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The American taxpayer finally made it out of Chrysler’s business today after the U.S. government sold its final holdings in the company to Fiat to the tune of $560 million.  This final sell-off brings Chrysler’s reimbursement to the U.S. taxpayer to a grand total of $11.2 billion.  That’s  a whopping $1.3 billion short of the company’s total received bailout. Would you call flushing $1.3 billion of the taxpayers’ money down the drain a success?  Not if you were sane. But from the federal government’s viewpoint,  success and failure are defined by alternative means. 

As it has indicated before, Treasury is unlikely to recover the remaining $1.3 billion. But Tim Massad, the Treasury assistant secretary who oversees the TARP program, declared the bailout a success.

“With today’s closing, the U.S. government has exited its investment in Chrysler at least six years earlier than expected,” he said. “This is a major accomplishment and further evidence of the success of the administration’s actions to assist the US auto industry, which helped save a million jobs during the worst economic crisis since the Great Depression.”

Ah yes, saving Chrysler’s union jobs. That’s what the bailout was about , right?  Well, bailing out Chrysler jobs might have been good for the unions, but overall,  I’d say it was an loss for the American taxpayer.

While Chrysler had the feds to float them some cash to keep its jobs from disappearing, do you know who had really great job security in the face of the worst economic downturn we’ve seen in decades? I’ll give you two guesses and the first one doesn’t count.  It’s none other than the federal government itself!

Keeping federal employees employed might be one of the very few things this administration has done successfully. Notice I didn’t say it was something this administration had done “correctly.”  In fact, job security must be job one in Washington, D.C. because, according to this article, if you work for the federal government in our nation’s capital, you may be more likely to die than to be fired.

Death — rather than poor performance, misconduct or layoffs — is the primary threat to job security at the Environmental Protection Agency, the Small Business Administration, the Department of Housing and Urban Development, the Office of Management and Budget and a dozen other federal operations.

The federal government fired 0.55% of its workers in the budget year that ended Sept. 30 — 11,668 employees in its 2.1 million workforce. Research shows that the private sector fires about 3% of workers annually for poor performance, says John Palguta, former research chief at the federal Merit Systems Protection Board, which handles federal firing disputes.

The 1,800-employee Federal Communications Commission and the 1,200-employee Federal Trade Commission didn’t lay off or fire a single employee last year. The SBA had no layoffs, six firings and 17 deaths in its 4,000-employee workforce. (emphasis mine)

Not a single worker was laid off or fired from 7,000 employees?  Either all 7,000 are stellar performers or the government just refuses to get rid of its substandard personnel.  Given two examples off the top of my head: federal employees owing billions in back taxes along with hundreds of FBI employees found cheating on work-related exams, I’m willing to go with option number two and say the feds have no will to do what the private sector does on a regular basis in order to survive: cut the ones undeserving of their employment.

Posted in: Economy