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Bailouts Back on the Agenda

By Ben Pershing
A spirited game of chicken over the fates of some of the biggest companies in America will continue today, as Congress and the Bush administration resume grappling over whether and how to bail out the auto industry. The latest development on that front is a new effort by Chris Dodd to win support for a plan to divert some $25 billion already earmarked to improve fuel efficiency toward helping the Big Three avert a cash crunch.

(And as was the case during the debate over the mortgage "rescue package," the head of the United Auto Workers would like it known that this would be a loan, not a "bailout." So stop using that nasty word.)

As for the other bailout(s)/rescue plan(s), the awkward presidential interregnum continues to sow uncertainty, as the Bush administration wants Obama to weigh in with more specific details of how he would like Treasury to spend the rest of the $700 billion. The "presumptive president-elect" has resisted so far, even as he keeps making extensive public comments on the economy. The latest came during his announcement Wednesday that Bill Richardson would be his Commerce Secretary.

Yes, that's the same Richardson whom James Carville compared to "Judas" not so long ago for his betrayal of the Clintons. The "Team of Rivals" atmosphere is now so thick that the Commerce nominee himself even mentioned it Wednesday. But with the addition of Judas to the team of the man mocked by critics as "The One," perhaps the comparisons to Lincoln's Cabinet should give way to Last Supper analogies.

Continue reading at Political Browser»

By Web Politics Editor  |  December 4, 2008; 8:10 AM ET
Categories:  The Rundown  
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Comments

This so called "bail out" OR "LOAN" is nothing but a glorified rip off, people. They had the warning signs 3 or 4 years ago. I know that I will not be able to pay my mortgage in another few months, so I have applied for a reverse mortgage NOW! Why wait until it is too late? The CEO'S had PLENTY of warning and sat by and let the chips fall. ALL thre CEO'S, accountants, comprollers, financial advisors should have seen this coming. Going and asking for this "money" and then adding a few BILLION dollars more? Where are their heads? YOU know where they are = "where the sun don't shine", is where. I feel this is not our problem - it is their problem, with bad financial managers - they can all go home - adjust the payroll so they are NOT included - shoot down the golden parachutes, get the wages in line and when this is done - DON'T COME BACK! These men are smart enough to do this on their OWN without all the "help" they are asking US to give them! They could sell the jets they own - cut salaries of the TOP guys, lower the boom on all their spending and get themselves out of this mess - that THEY made. Well - I just HOPE Congress sees through the smoke screen they are putting up and denies them ONE DIME! They have high powered, intelligent, fincial guys - let THEM do the math!! Leave US out of it.

Posted by: homaek2 | December 4, 2008 6:42 PM | Report abuse

to continue your analogy, imo we have more than one Doubting Thomas.

Posted by: TomJx | December 4, 2008 5:01 PM | Report abuse

The debate in Washington has sought to find the cause for our present economic problems. Deficit spending, greed to earn money by CEO's, attempts to provide help to our needy citizens, all contributed as well as unplanned events, war in Iraq, floods, hurricanes,etc.
However, our current problem is largely the fear of the loss of savings and earnings, so Consumers have stopped purchasing needed products.

Instead of giving money to Banks, Wall Street, Auto Manufacturers, give to Retired Seniors the funds their Retirement Accounts have lost, provided they will spend the amount for example to buy a new car. As cars are sold, new cars must be made to replenish inventories, and the economy is stimulated. All Capital purchases can be included, such as Refrigerators, Stoves, Air Conditioners, Heating units, Retirement Living Homes or Apartments, Nursing Home Admission, etc.

Since I do not know the number of Retired Seniors, it may be helpful to include all consumers, who lost money in their retirement funds, into the group receiving funds as long as they will spend the funds within a specified time period. Consumer spending is the key to overcoming the Recession without needing to impose advance regulations on Banks, Investment Firms, Manufacturers, etc. which has prevented immediate acceptance in Congress. This approach permits our Congressional personnel time to develop a plan to prevent another Recession.
Example: A Senior, who has lost money in his retirement account, is reluctant to buy a new car. He will shop and find the car he desires. He presents a Purchase Agreement from the Auto Dealer to purchase a car for $30,000, which is below the amount of money he lost. He will receive a check made out Payable to the Auto Dealer, which expires in 45 days.

By focusing on the individual rather than economic institutions, such as Banks, Auto Manufacturers, Wall Street, it will bring back optimism to the people? Then it will be up to Educators, Psychologists and the Media to re-educate our citizens to avoid deficit spending in the future.

Posted by: jsrson | December 4, 2008 4:35 PM | Report abuse

Although bankruptcy serves the interest of the conservative right, it will not benefit this economy short term. Since this economy is very fragile, this bankruptcy could lead to a depression. These same people who screech for bankruptcy will blame the Democrats for doing something else that had nothing to do with the downfall of the economy.

For those people who care about getting out of this quagmire we have to avoid a bankruptcy at this time. It may in fact be necessary to let one or more of them fail but only at a time when the economy could take the strain. The cost of not bailing out these companies in the long term will be far greater if we enter a depression. This is something that we should not gamble with. Part of any bailout will be the need structural changes that those who want "the market to do it's job" We got into this problem because lenders were not responsible and allowed borrowers to be irresponsible. There was a time when lenders prohibited unfit borrowers from getting their hands on money that they do not know how to control. The credit cards that are in the hands on teens and those without an independent source of income is a monument to that irresponsibility of the banking industry.

The use of credit for quality of life issues as the Mastercard adds promote is irresponsible and reprehensible.

Posted by: Gator-ron | December 4, 2008 4:34 PM | Report abuse

CORRECTED LINK BELOW

This entire bailout scenario is an exercise in corporate, national socialism.

Could the financial meltdown be a partial byproduct of ideologically-driven government programs that have eroded the financial well-being of many thousands of "targeted" American citizens?
http://my.nowpublic.com/world/targeting-u-s-citizens-govt-agencies-root-cause-wall-street-financial-crisis

OR http://members.nowpublic.com/scrivener

Posted by: scrivener50 | December 4, 2008 12:54 PM | Report abuse

"EXTRAJUDICIAL TARGETING" OF AMERICAN CITIZENS:

A ROOT CAUSE OF FINANCIAL CRISIS?

This entire bailout scenario is an exercise in corporate, national socialism.

Could the financial meltdown be a partial byproduct of ideologically-driven government programs that have eroded the financial well-being of many thousands of "targeted" American citizens?
http://my.nowpublic.com/world/targeting-u-s-citizens- govt-agencies-root-cause-wall-street-financial-crisis

OR http://members.nowpublic.com/scrivener

Posted by: scrivener50 | December 4, 2008 12:49 PM | Report abuse

The "Big 3" should enter into a pre-planned bankruptcy, which would allow them to dump their bloated dealer networks and modify their onerous union contracts.

When they emerge from bankruptcy they might be able to compete with the auto companies that are building autos in the southern states and are able to thrive and are profitable.

Posted by: mwhoke | December 4, 2008 10:22 AM | Report abuse

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