"Playing Russian Roulette" with economy
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"Playing Russian Roulette" with economy
| Fri, 12-05-2008 - 7:16am |
Any thoughts on recent testimony by the Big Three?
| Fri, 12-05-2008 - 7:16am |
Any thoughts on recent testimony by the Big Three?
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I think some deal will be worked.
Sopal
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I haven't been paying too much attention to the hearings (had them on in the background).
Sopal
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It looks like a little creative money juggling will go on as a "patch" of sorts until the new Congress and new president can address the problem:
http://www.msnbc.msn.com/id/28067839/
Dems, White House move toward auto deal
Big 3 plead for a 2nd day with lawmakers for loans to help them survive
WASHINGTON - Jolted by the loss of thousands of jobs, congressional Democrats and the White House reached for agreement Friday on about $15 billion in bailout loans for the beleaguered auto industry. President George W. Bush warned that at least one of the Big Three carmakers might not survive the current economic crisis.
Several officials in both parties said a breakthrough on a long-stalled bailout came after House Speaker Nancy Pelosi bowed to Bush's demand that the aid come from a fund set aside for the production of environmentally friendlier cars. The California Democrat spoke to White House chief of staff Josh Bolten during the day to signal her change in position, they added.
The developments came as desperate auto executives pleaded for a second straight day with lawmakers for loans to help them survive, and the government reported the worst single month’s job loss in 34 years.
Pelosi’s office issued a statement saying legislation would come to a vote in the House next week. The Senate is also scheduled to be in session to consider steps to aid Detroit’s Big Three.
“Congress will insist that any legislation include rigorous and ongoing oversight to guarantee that taxpayers are protected and that resources are directed to ensure the long-term viability and competitiveness of the American automobile industry,” Pelosi statement said.
In a subsequent statement, she added that the billions originally ticketed for development of more environmentally friendly cars would be repaid "within a matter of weeks."
Officials in both parties also said the legislation would include creation of a trustee or group of industry overseers to make sure the bailout funds were used by General Motors Corp., Ford Motor Co. and Chrysler LLC for their intended purpose. The funds are designed to last until March, giving the incoming Obama administration and the new Congress time to consider the issue anew.
At the White House, Bush declared the economy was in a recession, and he urged a gridlocked Congress to act quickly on a multibillion-dollar industry bailout — with taxpayer protections.
“We are going to have to have some give here,” replied Massachusetts Rep. Barney Frank, a senior House Democrat, expressing optimism that compromise might be possible. It wasn’t clear whether he was prodding Bush or Pelosi, but Republicans said there had been no lessening in Bush’s refusal to tap the $700 billion financial industry bailout fund to help the automakers.
Any legislation Congress might approve — in an emergency session next week — is likely to include appointment of a trustee or board to assure that General Motors Corp., Ford Motor Co., and Chrysler LLC use the aid to return their firms to viability.
It was not clear how sizable a package of loans was under discussion, although it seemed unlikely it would be as large as the $34 billion that the Big Three have been seeking this week on Capitol Hill.>>>
Sopal
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>>> Any thoughts on recent testimony by the Big Three? Should they get any bail-out money?
Sure, they've largely been screwed by the "economic crisis," which is the government's fault (mostly the Democrats) so the government should help them out. What the government shouldn't do, however, is to dictate how they conduct business or what products to make/sell...because the government doesn't know what the he!! it's talking about.
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I agree that we need to increase demand for autos and that providing money to replace gov't fleets is a good idea.
The strings attached to the deal should ensure that any plans the big 3 have for the use of that money include buyer incentives sufficient to get cars moving again off the dealers' lots, that exec comp is limited and that dividend payments are halted until the loans have been repaid.
Without gov't loans I'm afraid we'll lose production capacity, and when the economy finally turns around we will be forced to buy more imported autos at sky-high prices driven by the pent-up demand. The trade deficit will worsen and inflation will then become the problem. We Americans are too spoiled to give up our cars.
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http://www.pnhp.org/news/2009/october/meet_the_new_health_.php
http://www.youtube.com/watch?v=DQTBYQlQ7yM
Sopal
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It is not really socialistic. It is exactly what the Swedish government, which was then RIGHT wing and quite staunchly so, did to save the banking industry when it imploded in Sweden some years ago. Banks/companies that wanted a bail-out got taken over by the government and then resold/reprivatized once they were functioning again. It also meant that companies eager to retain control found ways other than government aid to right themselves.
The only iffy thing in the idea, to me, is that I have little faith in the federal government's ability to fix anything really. The Swedes are earnest and practical and it is a small country. What worked there may not work if directed from Washington DC.
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