Why Geithner's Treasury Leadership Proved Divisive
Supporters note that the government ended up profiting on its investment. AIG has repaid all the bailout money, and the government made $22.7 billion more than it provided.
â¿¿ AUTO BAILOUTS
Government bailouts of General Motors and Chrysler became a political issue in 2012. Republican Mitt Romney opposed rescuing the two companies. Obama countered that the bailout saved jobs at automakers, parts companies and other businesses. Both companies are now selling more cars, hiring workers and earning profits.
But unlike with the bank and AIG bailouts, the government is expected to lose money on the auto bailouts â¿¿ up to $24 billion out of the $80 billion it provided.The auto industry rescue was begun under the Bush administration but expanded under Obama. Administration officials have said the effort saved more than 1 million jobs and came as the economy was enduring a severe crisis. Geithner was involved in crafting the auto bailout and selling it to Congress. Private economists generally view the auto bailout favorably. "There are certainly those who argue that it could have been done in a less expensive manner, but the auto bailouts did save U.S. jobs," said David Wyss, an economics professor at Brown University. â¿¿ HOUSING CRISIS The Bush administration took control of mortgage giants Fannie Mae and Freddie Mac in September 2008. The two have continued under government control in what became the costliest of the bailouts. The government has given $187 billion to Fannie and Freddie and been repaid $55 billion for a net cost so far of $132 billion. The money was supplied so the two can continue to play a key role: buying or guaranteeing mortgages and packaging them into bonds to be resold to investors. This system expands the availability of mortgages. The future of Fannie and Freddie remains hazy. Geithner's Treasury proposed several options for their future but didn't push any.
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