Congressional Oversight Panel says government sold GM stock too soon
Paint peels from the GM logo painted on a chimney at the shuttered GM assembly plant in Janesville, Wis.
TEXT OF INTERVIEW
JEREMY HOBSON: Back in November, the Treasury Department sold almost half of its shares in General Motors for about $33 apiece. Today, shares of GM are going for $38. So this morning, the Congressional Oversight Panel that keeps an eye on the TARP bailouts, including the bailout of the auto industry, says the government sold too soon.
Former Senator Ted Kaufman chairs the panel and he joins us now. Good morning.
TED KAUFMAN: Good morning Jeremy.
HOBSON: So I thought it was supposed to be great news that the government was able to sell its shares in GM and let the auto industry go back to the private sector. What's the problem?
KAUFMAN: We're concerned about the sum of things that's going on. One of them is that you know it's hard for Treasury to make decisions. They have three different goals, which are save American jobs, keep their hands off of the companies that we own, but at the same time, return tax payers money as soon as possible. And at time there's been conflicts between those three. And we just though it would be better if they stayed with what their priorities were. The final concern is the whole question of moral hazard which we've raised before. The fact that we do not want companies around the United States to get the feeling that they can be too big to fail.
HOBSON: Do you think that they made a political calculation? That they just didn't want to be seen running the auto companies?
KAUFMAN: Yeah, many times political is also the right decision. I think what we're concerned about is just what is the highest priory. Is the highest priority not running an auto business? Is the highest priority getting us out quickly> Or is the highest priority saving American jobs? All three of them are clearly priorities of the U.S. people and of the government.
HOBSON: Alright, and finally -- do you think that even if some money is lost on the auto side of the TARP that maybe one of the other parts will make up for that and we'll end up breaking even?
KAUFMAN: Right now, the Congressional budget office sets it at a cost of $25 billion, although Secretary Geithner said he thought it was going to be lower than that and most of the information says it may well be.
HOBSON: Former Senator Ted Kaufman, Chair of the Congressional Oversight Panel thanks so much for your time.
KAUFMAN: Thank you Jeremy.