Saturday, December 6, 2008

Automaker Bailout

So, the news has been back and forth lately around the CEOs at the big 3 automakers saying at Congressional hearings they are "too big to fail," somewhat like CitiGroup did, and along with union representatives are requesting a bailout. The first round, they arrived in Washington in their private jets and asked for $25 million all told. They left empty-handed. This time, they drove there in their hybrid cars and requested $34 billion. It seems from reading about it they had a mixed and lukewarm reception, but an agreement has been reached between the White House and Congressional Democrats for $15 billion in loans.

I wrote my representative Nancy Pelosi, urging her to not use taxpayer money to support unprofitable corporations; rather, what is best for America would be to let the big 3 go under, so their production capacities could be sold to new firms that conduct their business better. I mean, at least the financial industry didn't off-shore Wall Street jobs... I don't think.

Actually, I see a plan starting to unfold: passing another bailout would be politically inexpedient at this point; so, Congress agrees to pass the unspent $350B of TARP bailout money, if the Bush adminstration agrees to give some of it to automakers.

UPDATE [12/11/08]: Though the $14B bailout proposal of the automaker passed in the House, today it was voted against in the Senate. Plan B mentioned in the above paragraph is still in play. [12/19/08] The Bush administration, citing concerns of a disorderly failure of automakers, will lend $13.4B to GM and Chrysler, coming from the first $350B of TARP bailout money. The second $350B still remains unapproved by Congress. Apparently this finishes up the first $350B of TARP funds. [12/29/08] For what it's worth, the Canadian government throws in another $4B to rescue the automakers, and the Treasury allows GMAC, which financed mortgage and auto loans, to be regarded as a bank, and adds another $6B to GMs bailout.

1 comment:

Mberenis said...

I'd like to Post a Comment

Did you know there is a bailout for you? Probably not, but Obama is making it better for us already! Most people don't realize how much money there is out there. During economic times like this, there is more money to be had than ever. Because of the bailouts and economy, lenders are bending over backwards to bail you out too. Believe it or not, there is people getting tons of cheap money nowdays to start businesses, buy homes, pay off debt, and more. Bailout is for YOU