The democratic leaders in Congress are pressing for tax payers to bail out the automobile industry along with the rest of the American economy. Read about it below.
Speaker of the House Nancy Pelosi and Senate Majority Leader Harry Reed have collaborated in sending a letter to Treasury Secretary Henry M. Paulson Jr. requesting he assess the possibility of assisting the auto industry as part of the current financial bailout. They argue that the auto industry is essential to a healthy economy. If their request is granted and the tax payers are saddled with bailing out the automobile industry, then that will further expand the government’s role in private industry and big business. In other words, yet another sector of our economy that will be socialized.
The carmakers want $50 billion in assistance. What’s another few billion dollars when we’re already spending billions upon billions. Just pile those bills on. That should really help the middle class.
It is worth noting that our recently elected President, Barack Obama, has had both Michigan Governor Jennifer Granholm and former Michigan Congressman David Bonior on his economic advisory committee. Its further worth noting that both are being appointed to positions in Obama’s cabinet. This is a little disconcerting considering the condition that Michigan’s economy has deteriorated to under the care of Granholm. Now both of these people will have expanded influence on the economic well being of the country.
I suppose its only the beginning of campaign favors being repaid during an Obama administration.
It seems that many people completely forgot that the democrats have been in charge of Congress for the past two years. When there was so much talk about ‘change’ and how bad the economy had gotten over the last few years, people pointed at the administration. But it was the democrats in charge. I think people must have forgotten that when they went to the polls to vote.
We might do well to remember that when the banks first started failing, it was called the Chuck Shumer Recession. Remember? But he’s still in the Senate and giving financial advice on how to fix the economy he allegedly helped bring down. Nancy Pelosi has presided over the least popular and most ineffective Congress in history. Barney Franks has been in charge of the finance committee for the past two years and it has strategically collapsed prior to the Presidential election. The democrats have refused to vote on issues to help the economy over the last two years in spite of how it might have affected the tax payers. Now they want to use tax payer money to bail out every sector of the economy and President Bush will not be there to prevent all their legislation from going through.
We have a democratic Congress, a democratic Senate and a democratic President. We have effectively removed all checks and balance. I hope your money is in an Obama proof investment because the rooster is guarding the hen house.









November 9th, 2008 at 12:56 am
The republicans under bush bailed out wallstreet, the big banks, and now even insurance giants, to the tune of 750 billion dollars plus another 750 with cash injections into the monetary base. The democrats are only asking for a few tens of billions to save our iconic big automakers, keep our what is left of our manufacturing base and provide good paying jobs. So when the republicans do it on a massive scale of essentially nationally the banks money wise on the taxpayers back yet leaving them in private hands which will garner the profits its okay. But god forbid the democrats get a piece of that pie for their constituents. Some how that is demonic. You guys dont play fair. Now will the money save detroit, or just prolong the pain. well without a serious change in auto maker management and their cost structure and the ability to make cars that will sell in tomorrows markets, no. Its as problematic as saving the banks and brokerages and insurance companys that management nearly or successfully destroyed. Over all, for a free market economy its all bad to nationalize businesses. The government under bush and paulson could have simply insured money market funds, bank deposits to 250 k, assisted in advising mergers of the weaker players, assosted in changing arms to fixed mortgages and left it at that. What you have now is the banks are sitting on the tarp money given, using it to pay dividends and bond holders, yes bonuses still, and for possible acquistions. they are not addressing mortgages as was the orignal intent. In otherwords, so far, the taxpayer has been ripped off while failed businesses have been given huge amounts of cash with which they are doing nothing. Do you guys even realize what paulson, the former ceo of goldman sachs till 06 who was paid many millions in his career even did? He has advocated for his industry, and the bush people twisted congress’s arms behind their backs to pass tarp while conning the taxpayers into thinking it would save their mortgages.
November 9th, 2008 at 5:57 am
Ontop of the fed already bailing banks out on bad mortgages, now theres talk of them asking for a bail out on credit card debt.
Along with the assistance we offer the auto industry I want to know where the hell all this money is coming from ?
I find it disgusting that the banks are not freeing up the money they were given to offer loans as it was intended when those loans could very well be the thing the auto industry needs now to pull out of this.
Instead, since the banks are hoarding a good part of those funds, we now have to reach even deeper into debt to do what the bank bail out was intended to do in the first place.
All this instantaneous gratification is going to kill us man, cant anyone see that ?
Brian, you need to pay close attention that while these iniatives purposes were nobel and right Bush and co. cannot be held accountable for the actions of the banks. Hes already expessed his dissapointment in them an told them they need to free up these monies.
I hardly think Bush twisted the majoritys arms behind closed doors.
They went along with this willingly and with teaming support, in addition, offered ontop of it another stimulus package.
The dems dont care how much we spend right now and are not worried about how to recover these funds. They are totally aware that when Obama reachs the office they will be allowed to impose just about any tax on anyone they want.
November 9th, 2008 at 6:56 am
Wow just to think 8 years ago when Bush was going into office he had no problems like this facing him.our economy was strong he had a surplus not trillions of dollars deficits and you guys are scared of what the next 4 years will bring(what a joke!!!) you repubs should really be proud of yourselves then u come here and vent your hatered its disgusting you guys are disgusting
November 9th, 2008 at 7:04 am
beth shaw says: “The carmakers want $50 billion in assistance. What’s another half a trillion dollars when we’re already spending billions upon billions. That should really help the middle class.”
I’ve got news for you, beth: $50 billion is not equal to “half a trillion.” It’s more like, “one-twentieth of a trillion.” But I’m sure that’s the only mistake you made in your analysis, right? (ha.)
November 9th, 2008 at 7:46 am
Bush’s treasury secretary was a creature of the banks and brokerages. He was ceo of goldman sachs till 2006 and was paid I believe about 200 million in salary and bonus’s. He is biased and socialized by the system to look at wallstreet a certain way. He has contacts and friends among them and you can bet they had many a discussion offical and nonofficial. The treasury did not attach the kinds of conditions and oversight to the moneys they gave to the banks like europe and asia did. Our government presses can simply print fiat money to spend anyway they want. The price of that is even more inflation down the road and devaluation of the dollar. These are real effects, its just right now we are delevaraging and disinflationary due to the recession and nobody is buying so demand for products and services and loans has dried up. Bush and paulson decided the bailout and even congress bucked them at first as it didn’t pass the smell test. They forget how aggressive and self absorbed the people are who run wallstreet and the banks. Plus our system makes it a legal manner for ceo’s to maximize shareholder returns and they, of course, also feed at that trough with bonuses’ I think bush has a tendency to simply avoid and escape responsibility for some of his actions that weigh on us all. Its not just him, its a culture of financial engineering, collusion, corruption, and denial. For quite a while elliot spitzer was the one federal prosecutor weighing in on the excesses of corporate america housed on wallstreet, and of course they got him over call girls. Then all the bad behavior simply accelerated and nobody stepped up to the plate to be that countervailing force. people give clinton way too much credit for the finanical times when he ws president. what he did was simply step out of the way as the tech boom dot.com era had its bubble and then his term was over and serendipity made everything crash as it too was mostly hype and speculation.
November 9th, 2008 at 7:56 am
Carla.
It seems once again you’ve proven that whats really disgusting is that you’re a useful tool thats only use is to point out your lacking of crucial information.
I seem to remember an attack on American soil that crippled our economy for years only to be brought back by initiaves set forth by Bush. While at the same time having to invest in two wars that were clearly a result of Clintons dereliction of his responsibilities.
Its easy for any schmuck to aquire a surplus when he is not spending the required funds to prevent what happened on 911 or deal with a madman that was in violation of numerous peace treaties and UN resolutions while shooting at our troops 1600 times.
Not to mention the abject failure of Clinton to deal with Al Queda after the first trade tower bombing on his watch, never mind the Cole and south Africa.
Freedom and peace at home cost money.
Get it right.
Your buddy Obama on the other hand has suggested that we pull out of Iraq to pay some of this debt.
Only so that the middle east can erupt into anarchy resulting in the possible loss of oil trade to America.
You think its bad now ?
I suggest you project a scenario in your mind of an America without oil.
Buts thats OK right ?
Obama will get us alternatives that are viable one of these days. Until then you all can sit on your campaign posters and hope for change, maybe get a check here and there.
November 9th, 2008 at 8:04 am
Your post says nothing to change the facts Brian while you conveniently forget the pork that Bush eliminated from the bill that the left attempted to include.
Like I said but will say it another way.
The left is eating this up an enjoying what is socialistic foreplay, just the opening act of the collective socialistic agenda that they will impose on us.
More regulations, more cap gains taxation, more social engineering on its way…
November 9th, 2008 at 8:17 am
This should not be allowed to happen. The liberal illuminati do not want to bail out the auto industry; the want to bail out the labor unions, which feed off of the auto industry.
No matter what Gov. Granholm says, much of the reason Michigan is in trouble is due to her terrible initiatives. While the Detroit auto industry is flailing, that is the fault of the Big 3 for not keeping up with the innovation of Japanese automakers.
What really has Detroit worried – and therefore the left – is what the unions (read mafia) will do without the automotive industry.
Anyone who’s lived in Michigan knows what “unions” mean in Detroit. Democrats, and the United States, should not be indebted to the mob.
November 9th, 2008 at 8:20 am
yes a lot of pork crept into the bill that would have made it a total joke. But you are calling the democrats “the left”. Do you simply see dems as the evil left? Talk about bias. bush already heaped socialism of the risks to the banks while letting them retain the profits. Its a very drunk kind of socialism. dizzy really. we need to regulate people who make bonuses creating a den of frauds. we need “real” balance sheets that are not cooked. we need prudent fiscal management not 30-1 leverage in risky markets to boost performance pay. As it stands now there are no cap gains on the sale of your primary home and still people are choking on their mortgages. One analysis said that the cap gains stock regieme benifits just those at the top that have already ripped off the nation so I think they need to start paying us back. Another analysis said that moving from 15 percent to the income tax level of 20-33 percent won’t have that much of an effect as the number of people involved will be relatively small. I woujld like to see the first 25k of cap gains and dividends indexed to inflation at the 10 percent level. then 15 percent from 25-50k. and then at the regular income take levels above that. That will preserve ordinary retirees with 401k’s and ira’s and small investors yet put some pressure at the margin for the top end which I think will encourage creative financial activiets as they try and shelter that income, it will push them into participating in governmental pilot programs from putting solar panels on the house to other investment incentives. At the same time it will prevent people from wholesale liquidations of their portfolios and create a more stable cash flow environment. its a good idea actually.
November 9th, 2008 at 9:04 am
Don’t look at me, I was against the bailouts.
November 9th, 2008 at 10:08 am
I want crazy about the bailout either.
Brian, I’m not going draw lines between every variation of liberalism,democrats, progressives, socialists, communists,conservative liberals and what have you.
They all reside for the most part on the left.
Too many people consider the things which government does for them as a society in maintaing stabilty and infrastructure to be socialism, when most of it really is considered social progress, but they do not understand the things government does for “select others” is what real socialism is.
So please,lets stop the bullsh*t that everytime the government drops a dime on a problem its considered socialism.
IT IS NOT !!!
Once the fed starts taxing your 401k compounded by eliminating the breaks that are present you can kiss all those brilliant suggestions goodbye.
The idea in motion right now is that people dont know how to invest properly in their 401s so the government is going to do it for them.
November 9th, 2008 at 10:33 am
Let our American automakers die. They deserve to go under. Yes, it will hurt short-term, but in the long-run we are all better off.
I do not buy American, just to buy American. I think this is a form of “affirmative action” to support industries that have failed to compete.
It makes me laugh when Obama says he’s going to fight for American car workers by opening foreign markets to American cars. Guess what. Open them up ALL you want. NO ONE will buy those cars. Free trade will not make Koreans or Germans buy American cars. Owning an American car is embarrassing, even in Korea, because GM, Chrysler, Ford have become low-end brand names.
I haven’t bought an American car in 20 years. I see no reason to buy one now.
Whatever happened to CAPITALISM, FREEDOM, LIBERTY, the cornerstones of American prosperity?
Calgone, take me away.
November 9th, 2008 at 10:42 am
there is no way to invest properly, just ways to either make or lose money. The s&p is lower now that it was 10 years ago and bonds just gave back four years of gains. All the 401k stats hype the boom market of the 1990’s and make people that is how it always works. Not! You cannot expect joe the plumber to know how to invest in shark infested markets that feed on volatility backed up by teams of analysts with computers, stratigist, money men, huge leverage, global connections, and governmental connections. They will lose in every market but an unbrideld bull which is rare. One good analysis is over a 25 year time period your 401 will go up more than half by what you put in and capital gains will be a little less than half, then when you pull it out a quarter of that goes back in taxes. Effectively you gain about a quarter after all the taxes are out, which use to be equivalent to a tax free money market fund. Make ya think huh! People who only invested in the 9 years from 91-2000 and somehow got out at the top would have made 3-4 fold if they were in the right funds. Now people who invested in 2001-2008 are down 35-50 percent if they were in stocks and bonds. Bonds didn’t help out much this time. The capital gains went to hedge funds, the big boys, and institutions, even pension and endowment funds, not to the retail investor. then when things cratered the market picked the pocket of the retail investor again just like everyone else. retail investors rarely buy puts or shorts for insurance. gold and reits and commodity funds worked for a while till they didn’t. A bear market is a vicous clawing churning mess with short quick rallies that rapidly peter out only to fall back to new lows. then margin calls create forced selling and people in hedge funds want their money back and that increases the velocity of selling. eventually everyone loses confidence and doesn’t want stocks. Then a few buyers tip toe back in only to be crushed by the shorts and the hedgy’s again further eroding confidence. Some say we are in a bottoming process now, but by historic bear market pe’s we are still 11-14 versus 7-10 and in a deep global recession. I think globalism will actually help us pull out faster this time than some think, but who really knows as the train wreak is still going on as car after car tumbles off the tracks for what seems like miles on end. The loss of mainstreet jobs is serious and the lack of good corporate leadership is equally serious. You can throw money at the car companys but it makes no sense with giving it to the same managements. pension and health care legacy costs are really not the problem it was the low ball projections of these costs that was. Didn’t any of their mangers take cost accounting in college? Its all really pathetic on so many levels. The real costs are simply a lot higher than they projected so everything is underfunded and the stock and bond markets are declining fast as well. Frankly if our corporate leaders had been honest and forthright and competent in the first place we might not all own suv’s but we would be solvent.
November 9th, 2008 at 11:24 am
“there is no way to invest properly, just ways to either make or lose money. ”
WTF ?
November 9th, 2008 at 12:36 pm
there is no proper way to invest, just ways to either make or lose money from the original investment. There are made up suggestions by mutual fund companies, brokerages, finanical planners, that are guestimates based on selective review of selected time periods, but there is no one way. there are things not to do like just put it all in your companies stock. Investing is a zero sum game spread over large groups of people in the end. Recession to the mean is the watchword. people also underestimate the impact of taxes on their final spendable pot of money.
November 9th, 2008 at 3:58 pm
Here’s an idea, why don’t I just start on business that is not competitive and loses money every year? I’ll pay myself millions to run this company. When it fails against foreign competitors, I’ll just go crying to the government so I don’t lose my shirt.
Does this sound like a plan?
November 9th, 2008 at 4:11 pm
Iggy, need a silent partner ?
Sorry brian.
A 250.00 investment 15 years ago started up a business for me that has been in the black since. Helped me buy a house and start a family.
I cant seem to work out what you’re saying if you’re generalizing it to all and any form of investment.
I was always under the impression that if you profited from the investment, the way you invested was proper.
November 9th, 2008 at 4:19 pm
The question is, when does it end? If the automakers are able to convince us they are “too big to fail” then what is next? We have bailed out the banking industry, the insurance industry, the mortgage industry and now the auto industry. I’m guessing trial lawyers are next, but that is a guess. I think the way we can tell which industries will be bailed out is by looking at which were the biggest contributors to the Democrats this cycle
Oh, here is a newsflash, American cars are already big sellers overseas. Ask anyone in Britain, the average person thinks of Ford as a British company.
The main problem we face, if we keep bailing companies out, this money has to come from some place. Does anyone here remember wild inflation under Carter? Well, happy days are here again, we’ve dug a hole and the only way out is through higher inflation and monetary control. The piper always wants his due.
November 9th, 2008 at 4:33 pm
Excellent point, Bryan. We are on the classic slippery slope. There’s even talk of bailing out credit card debt. I almost feel like I should stop paying my mortgage and racking up my credit card bills. What incentive do I have to continue being a fiscally responsible person if the government keeps bailing out the irresponsible?
November 9th, 2008 at 4:37 pm
I could care less about union labor.
My biggest concern would be all the contributing small business that depends on the auto industry.
Not after market, even though that would suffer a little but the pre fab market would be slammed.
Dont forget that they want to bail out credit card debt next, another batch of stimulus checks…
And yea Bryan, I’m watching closely to see who on the hill is asking where this money is coming from.
November 9th, 2008 at 5:00 pm
Micky, the problem with union contracts, especially the UAW, is the level of benefits that continue for the balance of an employees lifetime, even after retirement from the active workforce. As such, there is probably between $3K and $4K of each car price that is there just to cover retiree benefits. You are correct in your assumption about the auto suppliers. For the 25K employees working for the Big 3, there are another 150K in the Tiered supplier networks.
November 9th, 2008 at 5:36 pm
I wonder what the toyota, nissan, and honda employees get after they retire, what kind of pension and health benifits?? But lets not forget the wonderful auto maker managements that “chose” to make suv’s rather than fuel efficient cars. And time and time again they have chosen short term profitability over sustainability for the long term. You guyz are so down on the worker, but always give management a free ride because you buy all the programming they plug into you.
November 9th, 2008 at 5:49 pm
I,ve worked as am Iron woeker for three years and most of my life in the rest.business.
I supported Iron unions that protect the workers from scab companies that undercut their contracts. The level of patriotism, work ethic and product quality was not one of the “only do what I need to, get in my 40 hrs.” mindset that I saw in the hotel industry.
I dont know if certain professions draw a certain attitude or what but even though I said I dont care about union labor thinking back I have to say I have all the sympathy in the world for quality trained professinals in the construction industry.
Although I do understand the corrupt connection between big labor and government I’m kind of tossed up on Iron workers.
These guys earn every penny they bring home.
Its high risk hard work that demands professionalism or people die.
Hotel and retail unions seem to protect those with limited skills except for a few that are more or less non essential to our countries growth and infrastructure.
Clerks, maids, busboys etc are a dime a dozen.
I agree that unions drive the cost of just about anything to ridiculous levels only to pay for bloated glutunous contracts.
The bottom line for me in the end would be that job security should depend on the quality of the labor.
Later I avoided union houses and worked privately owned restaurants where I survived just fine on the merits and quality of my work without being a part of a extortionist gang.
November 10th, 2008 at 7:50 am
Maybe the government will bail me out. I’m with Ignat – if I quit paying my credit card bills and mortgage – will I get bailed out?
BTW – if we keep just printing more money it’ll end up being about as valuable as Confederate money.
November 10th, 2008 at 1:51 pm
Deutsche Bank just reported that GM is predicted to become worthless within a year. Let’s not save something that is not worth saving.