It’s funny how things work. There were so many detractors of the automotive bailout loan, yet no one has said much about how quickly Chrysler LLC and General Motors put American taxpayers’ money to work.

The same day the U.S. Treasury Department loaned Chrysler Financial $1.5-billion to finance new auto loans, Chrysler rolled out a zero-percent financing on an array of 2009 and 2008 models. Executives said more incentives would follow. The loan also allowed Chrysler Financial to buy down to a 620 credit score.

It took GMAC only one day to roll out a similar plan after the U.S. Treasury bought $5 million in GMAC stock and loaned GM $1 billion to invest in its captive financing arm. GMAC took it a step further by lowering its qualifying credit score from 700 to 621.

The point is the bailout money had an immediate impact, something I’m not sure we can say about the $350 million spent from the Troubled Asset Recovery Program.

In Woodbine, N.J., Paul Gentilini, owner of Gentilini Chevrolet, said GMAC’s expanded credit and new incentives doubled the amount of qualifying customers at his dealership.

Michael Martin, owner of Chevrolet and Saturn brand dealerships in
Manassas, Va., said GMAC’s lifting of credit restrictions should set an example for banks that have yet to use their bailout funds.

“People are saying it’s good to see GMAC back in the marketplace,” Martin said.

Some detractors likened the financing advantage GMAC received to a $3,500 taxpayer-subsidized price cut on GM vehicles, the amount consumers save with zero-percent financing. However, one analyst estimated that 49-million more Americans became eligible for financing under GMAC’s loosened restrictions. How many banks which benefited from the TARP can say that?

And let’s not forget the significant burdens being placed on GMAC. The former captive finance arm is now a bank-holding company under federal regulation, which means it has less control on how it loans money.

Whatever the case is, I think it’s good to have both GMAC and Chrysler back in the marketplace. In fact, Jim Press, Chrysler’s co-president, said Chrysler Financial was virtually out of the game for 35 to 45 days before it received the $1.5 billion loan. That’s a scary thought, especially considering the situation at Chrysler Financial cost its captive 20 to 25 percent of sales.

So has the industry finally hit the bottom of this cycle? Well, not exactly. The industry still saw vehicle sales plunge 36 percent in December, and that’s despite huge rebates and zero-percent financing. What happens this year really depends on what happens on the job front, and the signs so far haven’t been good.

Jobs disappeared in numbers not seen since the end of World War II, with the unemployment rate rising to an eye-popping 7.2 percent in December, the Labor Department reported. Even worse, the economy lost 2.6 million jobs last year, with about 75 percent of them vanishing in the last four months of the year.

The problem is fear is what’s driving this out-of-control train. On one hand, consumers have cut back on spending as the value of their homes and investments decline. On the other, businesses are cutting hours and payrolls in anticipation of lower demand. It’s fear factor in the worst way.

Economists are already predicting that this recession, which began in December 2007, will be the longest one since the Great Depression. The unemployment rate is still far from the 20 percent rate recorded during that period. However, Nariman Behravesh, chief economist at IHS Global Insight, said the jobless rate will continue to rise through much of 2009.

“During the first few months, the magnitude of the job losses will be at least as large as the November and December drops,” Behravesh wrote in a January report. “However, if a large fiscal stimulus package can be enacted quickly, then the pace of job losses in the second half of the year can be slowed, and by early 2010 the prospects of the U.S. economy starting to create jobs again will be good.”

As of press time, President Barack Obama was moving quickly to do just that. Let’s just hope there’s more accountability than what was seen with the first $350 billion spent from the TARP. Heck, maybe the automotive industry can serve as the model for how to put taxpayers’ money to work.