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Another Transfer of Wealth

Harry Reid claims to have a responsible plan (just ignore the oxymoron) to bail out the auto companies.

The usual suspects, Representative Barney Frank (D-FNMA) ansd Senator Chris Dodd (D-Countrywide), are already singing in harmony with the unions:

United Auto Workers chief Ron Gettelfinger warned Thursday that time was short.
"I believe that we could lose GM by the end of the month," he said.

"Nothing concentrates the mind like a death sentence," Dodd said. ( I thought the only thing that concentrated Dodd's mind was a phone call from Anthony Mozilo)

Barney Frank said in a hearing involving the auto bosses that Congress invited "disaster" if it did not act.

Yet to be determined is whether the bailout money will come from previously appropriated "$25 billion in loans to the industry designed to spur development of fuel-efficient vehicles" , which point appears to be the only political fig leaf the Bush administration requires to hide behind in this otherwise totally indefensible intervention by the Federal government in an industry that should and would be in bankruptcy.

The matter of bankruptcy versus federal intervention is an important point because the latter displaces the historical party of interest (creditors that would ultimately determine the final outcome of any plan to emerge from bankruptcy) with political expediency and political payback (re: union money transferred to Democrat campaign coffers).

Put another way, politicians are going to use tax payer money to pay off the creditors of the auto companies. This act will ensure the future flow of funds (tax payer money) from the unions to Democrats in a convoluted scheme that is nothing more than political money laundering.


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Comments (8)

Author above: HughS... (Below threshold)

Author above: HughS

Its worse than that. The v... (Below threshold)

Its worse than that. The vehicle makeup requirements as part of the bailout vastly decrease any possibility the companies will ever see profitability again. Umpteen Hybrids, etc.

To cover up their mistake Congress will be spending more money and/or tax gas so severely to make it work.

The republicans could have helped mold the bailout, but instead their intransigence allowed the Democrats to put the companies on the road to becoming the US Department of Automotive Manufacture.

Ah, the joys of religious factionalism.

Actually, I think the inter... (Below threshold)

Actually, I think the interesting point is that Bush is making them use already appropriated funds, in quantities insufficient to perform a long-term rescue, as a condition. You might consider it a fig leaf but it looks more like a tactical decision to kick the can down the street and saddle Obama with yet another chance to be the "decider" - and to live with the consequences.

Bush does the correct thing and force the bankruptcy and re=structuring, Republicans get hammered; do the full bail-out and he annoys the base and gets zero credit from the other side.

Also note that the Democrats are the ones who have put this together. When it turns into a toral fiasco (congressional democrats are involved, trust me, it will be a total fiasco), they get the responsibility.

This is all just temporary ... (Below threshold)

This is all just temporary window dressing, and at least one if not all of the Detroit car makers will go under.

Sorry about the weird doubl... (Below threshold)

Sorry about the weird double post of an unfinished thought. Here's the whole thing:

This is all just temporary window dressing, and at least one if not all of the Detroit car makers will go under.

I don't know why the Dems don't just let the evil corporations go under and write a huge check to the union to care for "displaced workers."

All these schemes to funnel the money through the car companies is just going to make it take longer for members of congress to get their cut.

Surely a much better plan w... (Below threshold)

Surely a much better plan would be to "bail out" whichever of the three are in the best financial position and let the other two fail. Then the more successful (least failing) one can buy up the parts of the other two's operations which are worthwhile having, hopefully forming a much more efficient and competitive company. There would still be plenty of competition (Toyota, Nissan, Honda, BMW, Audi, Mercedes, Renault, Saab, Volvo, etc.)

Transfer of wealth? ... (Below threshold)

Transfer of wealth?

$143.8 billion for AIG (thus far; it keeps growing)
$100 billion for Fannie Mae
$100 billion for Freddie Mac
$700 billion for Wall Street, including Bank of America (Merrill Lynch), Citigroug, JP Morgan (WaMu), Wells Fargo (Wachovia), Morgan Stanley, Goldman Sachs, and a lot more
$25 billion for the Big Three in Detroit
$8 billion for Indy Mac
$150 billion for stimulus package (from January)
$50 billion for money market funds
$138 billion for Lehman Bros. (post bankruptcy, through JP Morgan)
$620 billion for general currency swaps from the Fed
Rough total: $2,063,800,000,000--Two trillion
and growing!

Not to mention the cost of the Iraq War at how many billion and counting.......

Who was president during the biggest meltdown in history?

Worst. President. Ever

Indie: You must havee miss... (Below threshold)

Indie: You must havee missed the first word: Another Transfer of Wealth but thanks for listing all the others.

I was against those, too - but some are guarantees rather than bailouts of the cash-on-the-barrel-head variety.

Since you didn't mention Iraq, I won't either.

Who controlled Congress during the the biggest meltdown in history?

Worst. Congress. Ever.






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