Posted on 12/21/2008 1:21:48 PM PST by AmericaTalks
The bailout of Chrysler and General Motors was a simple case of CYA for the Bush Administration. Bush did not want to go out with the collapse of the auto industry happening on his watch.
The $17.4 billion lifeline extended by Bush will not do much in the way of preventing the total collapse of these companies. The viability of the industry is in question and the reckless decisions by management over the course of many years cannot be turned around within a three month period. By March, these guys will have their hands out again, with no significant restructuring plan for retooling themselves. What will the incoming Obama regime do?
Obama has pressed the industry for major changes, including increasing fuel efficiency and reducing carbon emissions. He also wants the maximum number of jobs saved. But at what expense? The problems G.M., Chrysler and Ford face now have been building for decades.
“I do want to emphasize to the Big Three automakers and their executives that the American people’s patience is running out, and that they should seize on this opportunity over the next several weeks and months to come up with a plan that is sustainable. And that means that they’re going to have to make some hard choices,” said Obama.
Clearly both the automakers and the union are unhappy with the conditions placed on this bridge loan to nowhere by the Bush Administration. Ron Gettelfinger, president of the United Auto Workers Union, expressed concern that too much of the burden for concessions is being placed on his folks; namely wage and benefit cuts. But much of the blame for the collapse of the industry is due to the oppressive tactics by the U.A.W. over the years in a time when the car companies have been seeing decreasing market share. Although there was a time when unions served a purpose due to abusive conditions in the workplace, they are now a detriment to both their members and the companies, employing strong arm techniques to extract exorbitant amounts of goodies that are only helping to kill the goose that lays the golden egg.
Obama is going to have to make some tough decisions in the next several weeks, some that the Bush Administration through this temporary lifeline avoided having to make. Are factories being closed and jobs being eliminated in proper numbers? Do the car companies need to use a surgical scalpel or a butcher knife? Are G.M. and Chrysler consolidating their product lines to make the leaner and meaner companies viable? And if not, will Obama have the cojones to call the loans and force the companies into a messy bankruptcy that may threaten to anger the unions that so vehemently supported him during the campaign?
Both G.M. and Chrysler chairmen expressed relief and an almost giddiness at receiving the good news about the bailout. Will they still be as happy come March 31, 2009?
This whole deal was a tremendous mistake. The automakers should have been allowed to fail, even if it meant initiating a domino effect that rippled through the manufacturing industry, with suppliers also falling on their swords. Sometimes the medicine one must take to cure an illness is tough to swallow. But that is what should have been done. The same applies to the financial institutions and mortgage companies.
But the fact remains that the government has become the nannies of our nation, refusing to allow failure of any sort. The founding fathers must be turning in their graves.
No matter to George W. Bush. He covered his rear end and exposed Obama's.
Business as usual in Washington.
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Gloat, gloat.
No doubt in the next election cycle the UAW will gratefully remember the efforts of President Bush and will sharply increase donations to Republican candidates.
Seems plausible.
Bush could be trying to hold up the entire stack of cards at least until he leaves office. Treasury seems to not have a clue what they are doing, lacking any real plan or direction. If a problem shows up, they just throw a few billion at it to make it temporarily go away. The UAW bailout was like that too.
Oh, and if they do stay in biz, now they can undercut Ford on prices, since there's no need to make profits for a while.
Smart middle-finger move by Bush on Obsama. The recession will now be on Hussein’s watch. Watch the MSM protect their boy by outlawing the word “RECESSION’ in their articles strating January 20.
That's right. The pubbies are still blamed for the Great Depression, for shutting down the government in 1995, and now for this recession.
Given the poisonous media atmosphere for anything GOP in general and Bush in particular, his actions should shock no one.
There; fixed it.
It wasn’t CYA, it was “kick the can down the road”. It worked too.
That’s fine with me. I got my bail out, too. To the tune of around Twenty One Thousand Dollars in Unsecured Debt. Just shy of that. And what I did is legal and ethical and patriotic.
The “Federal Reserve” is not a government institution but a private central bank owned by a handful of major banks and bond dealers. As such, it is a cartel owned, controlled, and essentially for-profit driven, not by the people of the United States but, instead, by the banking industry’s ruling elite. This oligarchic setup generates the most costly, debt-based, money system and greatest conflicts of interest in the history of the world. It is a system clearly at odds with the intent of the founders of the United States of America.
The United States Supreme Court has ruled time and again against the legal authority for banking institutions to lend credit. Both Federal and state laws allow banks to lend money, but banks do NOT have the authority to loan credit.
When you use your credit card, the bank is loaning you credit, NOT money. They can’t lend you something they don’t have, and they can’t charge you interest when they did NOT lend you money in the first place.
THIS is the “game” the Big Banks are playing. I found out how to play, too.
Banks do not lend money. They lend promises to supply money that they do not possess. So, if we can have no money without debt then if there is no debt then there is no money? That is exactly right.
We create more than 95% of the money today by signing a piece of paper promising to pay back the bank for money that the bank never had to lend. That’s not double talk, it is fact.
This only works for UNsecured Debt (credit cards, hospital bills, etc.) FReepmail me or check my blog at http://auntiecoosa.blogspot.com for more info.
I like being Patriotic.
Bush electing to abandon free market principles to save the free market system highlights Administration credulous, unreasoned economic pursuits. Whatever financial costs the people of this country must pay now to adhere to principle pales before the latter costs incurred, if markets are forced merely to postpone consequences. True solutions reaffirm the inexorability for market forces to countermand private and government fiscal sorcery, and to incorporate risk within all economic activities.
Government nationalization of private firms feeds addictions to power equivalent to chemical and pornography entrapments. The only beneficiaries are the patricians and private sector allies, who retain power by finding shelter within the debacles they fabricated. These ever more fragile constructs defer a final reckoning effecting everyone.
Proper government involvement means the Federal Reserve, in concert with Treasury and Justice, applies persuasion to private sector firms. Brutal persuasion, just short of torture as condemned by Geneva Conventions, enables private companies to discover programs for market clearing asset prices. They also form new companies absent flagging management and labor attributes.
The framers of our Constitution possessed the intelligence, pragmatism, and integrity to say this country would promote the general welfare. They rejected the impetuous arrogance enabling a declaration the Treasury Secretary would ensure protection of home values, college funds, retirement accounts, savings, executive severance packages, homeownership, lifetime employment, corporate wealth, political careers, and union benefits.
Washington. Bottomless moneyhole.
Wall Street. Moneyhole.
Detroit. Moneyhole.
California, New York City, New York State, Michigan, Ohio....
Looks like the North and South Dakota will have to pull us out of this.
Unfortunately, A hopelessly infected host must die to also kill all the parasites.
Some groups of folks just don’t know when to quit choking the golden goose.
IMHO, the interesting part is (though not “legallY” binding) one of the stips was aimed at the UAW in the form of “lower wages”. Now Congress should go ripping back and make it a “legality”.
At least this money comes from “Pot A”....not added money. Bush saved us $15 bil.
What a great idea! The U.S. auto industry is collapsing — let's do more of the things that caused the collapse. What doesn't kill you makes you stronger, n’est ce pas?
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