WPost: GM Will Probably Never Pay Back Its Loans

I suppose there are few of us who hadn’t guessed this, but it would have been nice to have it reported before the administration committed to a bailout:

It’s sure to be a stretch. For the United States to fully recover its investment, the value of General Motors stock will have to reach levels it has never before attained.

“I’m not going to predict it — that’s not my job today,” GM chief executive Fritz Henderson said in a recent interview.

“I don’t know how much we’re going to recover,” a senior Obama administration official said as the company headed into bankruptcy last month.

This uncertainty stems from the difficulty in valuing the 60 percent GM stake that the United States will receive in exchange for the public investment. The government also gets preferred shares and other compensation.

The stake will be worth enough to fully cover the government’s direct investment only if GM’s stock rises above $68 billion. Even at its recent 2000 peak, GM’s stock was worth only $56 billion.

Liberals have complained that about the secretive nature of the Bush administration. They argued that some folks in the Bush White House should have known that Iraq lacked stockpiles of Weapons of Mass Destruction, but failed to disclose all they knew. Here we have a case of the supposedly-transparent Obama administration sitting on negative information because it might have spoiled the GM bailout. Just like they sat on a report about the effectiveness of DC’s charter schools. And just like they sat on an inconvenient EPA report that casts doubt on the administration’s arguments about ‘global warming.’

If President Obama was genuinely interested in openness and transparency, he would have said clearly up front that there was no expectation that all this money would come back to the Treasury. Instead, he has concealed that fact – largely because he could see how many Americans opposed this bailout. If he had been truthful about his plan, there would have been even more opposition to this payoff to the unions.