Having the right to do something does not make it right to do...

Preface: I am not an economist and no expert in public policy. I only know what I know by trying to read a balanced amount of content from the left and the right, knowing that the truth belongs to neither and it lies someplace between each of their respective spin machines.

I know I might be in the minority when I say that I think the auto bailout and the financial industry bailout were the right things to do... Especially in my family and my wife's family which is pretty heavily conservative in political nature.

My reasoning may be so simplistic as to be completely wrong, but it's what I believed at the time and haven't read a lot to change my mind. I also happen to believe that had the GOP won the White House they'd have been forced to do something very similar... It's just politically convenient to scream from the mountain tops about an unpopular yet required infusion of hard earned tax dollars.

My simplistic defense for bailing out auto and finance in the US is this: I am relying on savings and investment to send my kids to college as well as retire. There are A LOT of people out of work today. Imagine the state of the US economy if we had let the auto industry fail... all those living wage jobs gone and all those suppliers shutting down and sending their employees to the welfare offices for checks as well.

Hank Paulson (Republican Treasury Secretary) estimated that without the bank bailout unemployment could have reached 25%. And that's just the financial sector. Add the auto industry and the suppliers to that industry... it's scary to think about the size of the recession or depression the US could have entered.

Call it simplistic, call it selfish. It's both, but it's why I look at the bailouts as a necessary evil.

That being said, I can't believe the marketing decision that GM just made. Many have probably seen the GM commercials talking about paying their loans back in full, with interest and early. This is technically accurate. Based on the research I have done, nothing they said was untrue.

But the reality is that GM was given 2 pots of TARP funds. One was loan money, the other represented the cash investment in the company whereby the US Government owns 60% of the company. This second bucket is where the money came from to pay off the loan.

Now, based on what I have read, and as a shareholder in GM (aren't we all shareholders when our tax dollars are paying to buy 60% of the company) it was the right financial decision. It seems that use of TARP debt came along with a fee that GM would have had to pay soon. If they retired the debt, they avoided the fee - saved money. Absolutely the right thing to do.

Now, for what I am calling them 'having the right to do something that was not right to do'... They chose to advertise that they paid back the loans in full intimating that this was done out of earnings from selling cars... they never said it, but a pretty strong correlation was drawn between 'increased demand for GM cars' and being able to pay the debt portion of the TARP funds back. They absolutely had the right to run an ad that put things in this light. But from my seat in front of the TV it wasn't the right thing to do.

I thought GM was making good progress. They are emerging from bankruptcy, they have some good cars (as measured by 3rd party feature and quality reviews), their advertising campaign talking about 'may the best car win' put the focus on the strides they were making.

Then this... a purposely misleading ad... Again, paying off the loan, even with other TARP funds was their right, AND the right thing to do.... Running the ad was their right, but in my opinion, not the right thing to do.