Autos Bailout: White House Blinks
There's a flurry of activity happening in the moments before the markets open on Wall Street today at 9:30 a.m., as the White House attempts to prevent a Dow disaster.
The market futures point to a huge drop at opening, thanks to the Senate's defeat last night of the $14 billion autos bailout loans.
But the White House appears to be trying to stabilize the system a little, saying moments ago that "letting the auto industry fail would be irresponsible."
In its statement, the White House said: "Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms. However, given the current weakened state of the U.S. economy, we will consider other options if necessary – including use of the TARP program -- to prevent a collapse of troubled automakers."
This has all amounted to a huge and scary game of chicken: The White House had opposed using the TARP funds -- the $700 billion bailout/rescue package -- to bailout the autos industry, saying Congress should reappropriate money already allocated.
The House capitulated, but the Senate -- indeed, the Republicans in the Senate -- defied President Bush in defeating the bailout bill last night.
This morning, it's looking like the White House is blinking.
This is going to make from one chaotic market opening.
December 12, 2008; 9:24 AM ET
Categories: The Ticker | Tags: Chrysler, Ford, GM, automakers, capitalism
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