Another way to think of the GM/Chrysler bailout

Posted by Marc Hodak on February 23, 2009 under Politics | Be the First to Comment

I was taught to think in terms of return on capital relative to cost of capital.  Totally outdated way of thinking.  In financial terms, the return on capital invested in GM or Chrysler is still less than zero.  In fact, it will likely be negative 50 percent.  That’s the best case scenario.

The correct way of thinking about this is in terms of return on political investment.

Good commentary on the Chrysler corporate welfare package here.