On winning

I can't say I've followed every nuance of the auto bailout. At first I was inclined to think that letting the Big Three go bankrupt and rebuild wouldn't be the worst thing ever, since they'd probably get restructured somehow into more viable entities. But in this business climate, who would buy them? And what would happen to all those workers? To all those pensioners? To all the families that rely on UAW insurance? To all the communities built around Big Three factories, or around factories for Big Three suppliers? Especially with the prospect of an honest-to-god depression on the horizon, allowing that much financial disaster in order to have more fuel-efficient and better designed American cars is simply an insane trade-off. (Not that there weren't those willing to hang hundreds of thousands of American families get soaked.)

So I'm down with the idea that a bailout ought to exist. And that it ought to be done in a way that preserves a living wage for workers along with benefits for their families. And it ought to preserve pensions for retirees who did their part for American industry and paid into their defined benefit plans. And it ought to preserve communities that rely on auto jobs. And it ought to push Detroit to finally catch up with the efficiency and simple reliability of cars designed in Japan, Korea, and Germany.

Congressional Democrats originally hoped the Bush Administration would simply use money allocated to financial bailout to hold Detroit over until a more comprehensive solution could be found. The White House objected, demanding a separate pool of money to be administered by an unaccountable Bush appointee with the power to destroy unions along with the wages, benefits, and communities that rely on them (but asking corporate leadership to give up their private jets is apparently crazy talk; note to Cothran: Walmart isn't seeking a federal bailout, so the analogy is rather inexact). The UAW and Congressional Democrats were understandably averse to that, but ultimately went along, since the consequences of no deal would be disastrous.

Then Congressional Republicans decided that there needed to be even more punitive measures inserted, provisions moving wage cuts for workers from 2011, when the next contract was to take effect, to 2009. The UAW drew the line, as did Democrats, and the bailout package failed. At which point Bush announced that he'd allow the use of funds from the financial bailout to be used to tide Detroit over until there was time to hammer out a better deal (which won't be until after Jan. 20).

You'll recall that this solution is what Congressional Democrats originally wanted. But because they bargained away various positions along the way, the fact that they got exactly what they wanted can hardly be considered a brilliant victory. It was a success, but not one they can use to demonstrate their political muscle. Brilliant tactics, but possibly poor strategy over the long run. When you win, you want to be able to take a victory lap.

Right now, the Republicans can pretend that they won something over all of this, when they got nothing they wanted and Democrats got what they asked for.

You'll note that my links above generally go to the execrable Martin Cothran. He currently serves as one of my conduits into the conservative id, and has been notably indifferent to the human suffering that would follow from allowing the Big Three to fail. Of course, he is focused on Kentucky politics, and Kentucky hasn't got Big Three plants. They do have non-unionized Toyota plants, which may help explain some of the conflict of interest faced by Cothran and his Senator, Minority leader Mitch McConnell. Republicans don't need an excuse to bust unions, but by busting unions in Michigan, they weaken efforts to unionize Kentucky's workers. A unionized Kentucky workforce would be in a position to keep Toyota's profits here in America, but what do Kentucky's conservatives care about that?

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I agreed (reluctantly) with the need to bailout banks because they constitute a special case in the financial system -- the overall health of banks is linked to the overall health of the economy. I am not against bailouts per se, but the devil is in the details. There are a lot of ways that they…
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I keep ranting about a National Security interest in keeping American auto production facilities alive and well but can gain little credibility. So, mebbe you know? WHO makes our tanks, humvees, trucks, jeeps, cars, ambulances and the like for the Military. And how can those so-called paragons of patriotism and security, the Republicans, settle for some foreign company making them? Why doesn't that seem to bother anyone else?

It's probably time for Obama to pull off his mask and reveal his true (according to some) socialist colors. A bit of nationalizing - even temporarily - might help.

Notice I say "might". I'm no economist. But if companies get too big to be allowed to fail then perhaps they're just too big.

The use of TARP funds for auto bailout is illegal.

I cannot adequately express the grief and disappointment I feel in my government. I see America crumbling under the weight of corruption and government intrusion into the private sector. My grievance is not with any one party, but rather with the government as a whole. I lost my job on March 10, 2008. I watched the government throw $700B at the financial markets in a rushed manner, served on a platter of fear, and poorly planned. And now I see the program has failed as banks and other financial institutions are hoarding that taxpayer money. The TARP did not help me or others like me at all. No, the government helped the elite.

I have watched my government try to pass legislation to bail out a completely dysfunctional auto industry with yet more taxpayer money. I hear much discussion about protecting autoworkers jobs, but I have heard nothing about the rest of us. I am not greatly bothered by this as I am a proud and principled American who will face whatever destiny awaits me.

The Legislative Branch of our government has a specific job to perform defined by, and within the limits of, our Constitution. When we do not like what comes out of both houses of Congress, we do not presume to believe that the Executive Branch is unconditionally granted the freedom of running rough shod over the Legislative Branch no matter what the interest of the Executive Branch may be. We let the Legislative Branch do its job and we stand by the result of their efforts whether we like it or not unless it is unconstitutional.

Now I read that the President is planning on taking unilateral action to draw funds from TARP to bailout the automakers without the consent of my congressional representatives; my Senators and House Representative. Oh, they may not have a problem with your proposal, but that does not in any way make it right or just. It is wrong in principle, and it violates the Equal Protection Clause as stated in the 14th Amendment of our Constitution. In addition, I am of the opinion that such a proposal annunciated by your administration tramples under trias politica. Indeed this model of a democracy is clearly documented in the United States Constitution, Article I, Section 8: which places all the power of the government in the Congress to make all the laws.

Yet the sum of all guidance divined from our Constitution is being set aside for what might be considered for the good of the many. However, is setting aside our Constitution, for even the most noble of causes in fact and in truth serve the greater good? I should think the founders of our country and the framers of our Constitution would answer in the negative.

The TARP was funded for the purpose of assisting Financial Institutions. I direct your attention to the following interpretation of Financial Institution as documented in the TARP bill (Emergency Economic Stabilization Act of 2008, Public Law 110-343):

Financial Institution - The term financial institution means any institution, including, but not limited to, any bank, savings association, credit union, security broker or dealer, or insurance company, established and regulated under the laws of the United States or any State, territory, or possession of the United States, the District of Columbia, Commonwealth of Puerto Rico, Commonwealth of Northern Mariana Islands, Guam, American Samoa, or the United States Virgin Islands, and having significant operations in the United States, but excluding any central bank of, or institution owned by, a foreign government.

This definition contained in the statute does not leave much room for interpretation.

Automakers are not Financial Institutions and thus, to draw funds from TARP for any other purpose than to assist Financial Institutions without the protection of representation afforded me by the Constitution and through my Senators and Representative is wrong by any measure. And should my Senators and Representative not act to prevent such action is to abrogate their Constitutional duties and responsibilities and render them unfit for presiding over the matters of, and brought forth by the people of the United States of America.

Should you proceed, you will release America into a deep and unexplored abyss of historic proportions. I advise good measure and profound thought before you make any decision in regard to drawing taxpayer dollars from TARP to be given over to any public or private business that does not meet the definition of Financial Institution.

Thank you.

By J.D. Marshall (not verified) on 13 Dec 2008 #permalink

You forgot a couple of things J.D. There is little or no Congressional oversight over the billions of dollars being wasted on "Financial Institutions" which immediately convert those taxpayer dollars into dividends and bonuses. So much for helping "Financial Institutions". Screw them. Instead, help out someone with MY taxpayer dollars who actually makes something to sell. Keeping American auto makers alive will help keep non-productive service industries (such as "Financial Institutions") alive.