DN Editorial: Over-Sachs'ed

THE U.S. auto industry is thriving, running its factories at triple-shift full capacity, hiring new workers.

It's begging auto-parts suppliers for more product, as hiring grows all along the U.S. car-market supply chain, where millions of Americans are employed in the real economy, building and making actual things.

Its workers are shopping, buying, paying taxes, funding schools and showing the effect that manufacturing jobs can have in the honest-to-God economy.

Even Government Motors, otherwise known as GM, will make a handsome profit this year, and soon the feds will have sold off our stake in the bailed-out automaker, a deal now estimated to cost you, the taxpayer, $10 billion.

A good deal, we say, but free-market purists are displeased. The GM bailout skirted traditional bankruptcy, and rewarded workers at the expense of investors (and union pensions at the expense of private pensions).

You can see how this rankles the Wall Street crowd, which is accustomed to stiffing pensioners as the first order of business in a restructuring. As to the holders of GM stocks, bonds and IOUs - let us remind them that the company was dead, and in no danger of getting private financing, since the private-financing system had just collapsed.

This brings us to the other bailout, that of Big Finance. We all remember TARP, and the $700 billion allocated to fund the banks that blew up the economy. Fewer remember that the AIG bailout was another way for that company to funnel millions in "counterparty payments" to fellow gamblers like Goldman Sachs and others. And few talk of the trillions in purchases, loans and guarantees put forth by the Federal Reserve to prop up giant banks.

What did we get for this investment? The short list includes interest-rate fixing scams, drug-cartel money laundering, manipulation of commodity and energy markets, and sham foreclosures.

Bank lackeys forged documents (called robosigning) by the thousands to facilitate the repossession of foreclosed homes - something to think about the next time somebody carps that the auto bailout skirted the "rule of law."

Goldman Sachs is now repaying America by actively working to ensure that American manufacturing can't get the materials it needs at fair prices.

According to the New York Times, Goldman was recently found trucking aluminum from one warehouse to another to skirt rules against hoarding. Those complaining include the automakers and beer companies - again, those who make things and employ people.

We bring this up because the auto and bank bailouts - conceived in desperation - have been revealing as policy choices.

We can choose to invest in manufacturing, which has tangible benefit in real America, or we can choose to invest in Big Finance, subsidizing its addiction to pointless anti-capital mischief.

The next time somebody starts pontificating about the job creators, ask: Who created the jobs that now grow up around the rebounding auto sector?

It wasn't Goldman Sachs.

And it wasn't John Galt.

It was you, the taxpayer.