TODD ZYWICKI: The Corporatist Legacy of the Auto Bailouts.

If success is measured by a $10 billion loss on a $49.5 billion investment [sic] in one case, and the control of one of the “Big Three” American automakers by Europeans in the other, one is left to wonder what an unsuccessful program would look like. (Oh yeah, right). On top of that, special tax treatment by the Obama Treasury Department saved GM billions of dollars in taxes that typically would be owed.

But despite the massive losses and the shrinking of the “Big Three” to the “Not-Quite-As-Big Two” American automakers, it is true that both General Motors and Chrysler have survived and returned to profitability. Moreover, the automotive industry as a whole has added hundreds of thousands of jobs since the depths of the recession. But is this because the taxpayer bailouts “saved” the American automotive industry? (Notably, the President no longer says that his administration “saved Detroit.”) Or did GM and Chrysler survive despite Washington’s meddling?

Looking at the actual record of the auto bailouts paints a different story from that told by the Administration. In particular, looking at the record, there is little evidence that the most controversial elements of the federal government’s intervention actually helped to reorganize the companies—and in the end had an overall net negative effect.