An Obama Fairy Tale: "How I Saved The Auto Industry"

President Obama's truth-challenged state-of-the-union address was successful in a least one respect: creating more jobs for fact-checkers. His speech was studded with dubious claims of his presidency's middling achievements, none more egregious than his assertion he single-handedly saved the auto industry.

In what amounted to a televised political stump speech, the president stroked his ego by trumpeting the following: "On the day I took office, our auto industry was on the verge of collapse...and tonight, the American auto industry is back."

No question the industry has rebounded, but the president's actions had virtually nothing to do with the auto makers' resurrection from the grave. His declaration ignores both history and reality.  However, he has made this pronouncement so many times that the media never bothers to confront its veracity.

First of all, the president did not bail out the auto industry.  The government scooped up $80 billion of taxpayer money and forked it over to just two companies: General Motors and Chrysler.  Ford declined to participate in the giveaway and recuperated just fine.

Despite pumping billions into the auto enterprises, the government was unable to prevent their collapse. General Motors and Chrysler filed Chapter 11 bankruptcy in 2009.  Both firms had been losing millions of dollars for years because of glaring mismanagement, shoddy product quality and plump union contracts that made them uncompetitive.

When the two mega corps emerged from bankruptcy proceedings, management shed jobs, shuttered plants and forced investors to take a $27 billion haircut on bonds issued by the enterprises.  These initiatives were facilitated by the Chapter 11 filing, enabling the companies to regain their financial footing.

In the interest of space, let's look at what this meant for one firm, General Motors. Prior to bankruptcy, employment at the company was 266,000.  At the beginning of this year, the multinational workforce had shrunk by 64,000 jobs to 202,000.  The story is similar at Chrysler.

Along the way, GM closed 17 factories and parts centers.  In addition, the company lopped off more than 1,100 dealerships across the U.S.  Many suppliers scaled back operations or went out of business.  As a result, tens of thousands of jobs vanished.  No one has ever calculated the damage to the economy.

Therefore, it is patently false to claim the administration saved industry jobs by bailing out GM.  To skirt the truth, the administration always adds the disclaimer that job losses would have been a lot worse had the government not intervened.  But there are no facts to support the contention, just supposition.

Lastly, the president bragged in the past that taxpayers would recoup every penny the government invested in GM and Chrysler.  The White House retreated last June, admitting that taxpayers would likely lose about $14 billion on the bailout.  Oddly enough, the president did not mention this in his speech.

Obama suffered other mental lapses as well in his address.  For instance, he never explained why the government still owns 26.5 percent of GM, despite his repeated promises the feds would exit the business. Nor did he reveal why the government has not demanded GM cough up the remaining $25 billion it owes taxpayers.

You would have to suspend reality to find one scintilla of credible evidence that raiding the U.S. Treasury has done anything to save General Motors or Chrysler, much less the entire auto industry. Yet President Obama persists in spinning this fairy tale for an adoring media.

It proves that if you repeat a lie often enough, it becomes reality when you have a partisan press.