The Great Automaker Bailout: A Question of When, Not If
So the folks behind the Big 2.5 Amerian automakers—GM, Ford, and Chrysler—are angling for $34 billion from the feds to keep 'em going for some period of time into the future.
Much drama in Congress this past week centered on this shameful spectacle (as with the financial sector bailout, the American people seem less giving with their tax dollars than Congress. About 61 percent are against the idea.)
Here's Rep. Barney Frank (good on Internet gambling, medical marijuana, one or two other things, and pretty awful on everything else) sizing up the situation, according to Reuters:
Frank, the Massachusetts Democrat who chairs the House of Representatives Financial Services Committee, said the economy would be devastated if an automaker were forced into bankruptcy or shut down.
"In the midst of the worst economic situation since the Great Depression it would be an unmitigated disaster," he told a hearing with the CEOs.
Frank said there was a "pretty broad consensus" among committee members to assist Detroit, which he called a step forward. But that sentiment alone "doesn't quite get us there," and said he would be talking with other lawmakers about the form of a bailout bill.
For those of us who oppose bailouts (of the financial sector, the auto industry, the corporate dry cleaning mafia, home mortgage owners, you name it), that sounds pretty heartening, doesn't it? Frank doesn't have the votes, despite a "pretty broad consensus" in a Democratically controlled Congress.
But it's not like the Bush administration and, one assumes, most of the weak-spined Republicans in Congress who ended voting for the Paulson plan, are really against a bailout. They just want it to come from a different pile of money:
The White House refuses to carve out for Detroit some of the $700 billion bailout it is already showering on Wall Street and the banks, saying that money is intended only to help stabilize the financial sector.
Bush said he was concerned about taxpayer money going to companies that may not survive but said modification of the fuel-efficiency loans could help worthy auto companies.
"It is important that Congress act next week on this plan," he told reporters.
In other words, Bush wants to pull the auto bailout dough from an existing $25 billion Department of Energy program to help U.S. automakers create more fuel-efficient cars.
And here's a preview of a plan that will almost certainly carry the day, a Washington-style compromise, meaning everybody gets something, and the taxpayers are stuck with a bill about as good-looking as a Pontiac Aztek:
Michigan Republican Rep. Thaddeus McCotter proposed a $25 billion automaker bridge loan drawn half from the TARP [Troubled Asset Relief Program, a.k.a. the Paulson-pushed bailout] and half from the Energy Department program.
Asked about such a compromise on Thursday, Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, called it "a reasonable idea," although just one of many.
And a special note for those of you who plan on living into 2009: Remember, the odds have got to be at least 50/50 that whatever gets done now will get redone once President Obama actually takes office and starts to worry about the bottom falling out on the collectible plate market.