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Comment by braythwayt | Hacker News Reader

I’m actually not very pro-Iacocca in the least, but I must give credit where credit is due. At the time I questioned the loans, and still do.

But in comparison to bank bailouts, Those arrangements were far less costly for taxpayers.

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In your original comment you never mention bank bailouts. A far more appropriate comparison would be the more recent bailouts of US automakers in which the TARP loans were all repaid. Granted, the partial ownership of the companies that the government took on during the bailout resulted in a loss- but I'm not sure if it would have been more appropriate for the government to hold the stock until it recovered.

https://www.thebalance.com/auto-industry-bailout-gm-ford-chr...

TARP was primarily about the banks, but the money authorized was expanded to cover automakers as well. The government made a profit on it overall, and both the bank and auto parts were profitable.

The problem with TARP was the government should have got a lot more equity in return for what it provided (for example, Goldman Sachs and Warren Buffett also invested, and got better terms, but the government's impact was even greater, and should have gotten as good terms, if not even better ones than Buffett and Goldman).

GM bondholders, many of them retirees, were also screwed. The govt overrode traditional bondholder priority in restructuring, in favor of the union. This was wrong.

I think the comparison to bank bailouts is fair: in his autobiography, Iacocca complained that he had to go to Congress to get a billion dollar loan, but the Federal Reserve routinely loaned similar amounts to banks (although I don’t know how well he understood banking, so his definition of loans to banks may have been unfair).

The bailout that Iacocca oversaw didn't cost taxpayers anything. Those were loan guarantees; the federal gov't essentially co-signed a loan from Manufacturers Hanover (now JPMorgan-Chase). At no time was public money given, only risked if the loan defaulted.

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