The government will be distributing another $3.8 billion to GMAC, the former GM subsidiary that makes car loans and home loans, but mostly, bad loans. Although the U.S. government already has given GMAC $12.5 billion in an attempt to shore up its balance sheet, the company is still experiencing massive losses. This latest cash infusion from the government will leave U.S. taxpayers as the majority owner of the company. It doesn’t seem like the wisest investment of our tax dollars, but no doubt the Treasury feels that having thrown $12 billion into GMAC, another $3.8 billion is chicken feed.
I’ve posted about our bailout activities on numerous occasions — such as here and here — but what I find most interesting about this latest bailout is the seeming lack of any real reaction to it. It is as if we have heard about so many bailouts that we have become numb to another failed company, another expenditure of a billion here and a billion there, and other capitalist enterprise largely “owned” by the government, which purportedly will some day be repaid for its “investment.” The outrage at the ineptitude of the corporate kingpins who ran the companies into the ground with risky and ill-fated business activities, and the outrage at the bad deals the government is striking in agreeing to make the bailouts, seems to have vanished. We all apparently are suffering from bailout fatigue.
In the meantime, let’s all hope that GMAC’s continuing problems aren’t an early warning sign of the dreaded double-dip recession.