[Guest post by DRJ]
Reversing his earlier position, President Bush declared he would step in to avoid the “precipitous collapse” of the Big 3 automakers:
“Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms,” White House press secretary Dana Perino said after the failure of a $14 billion bailout bill in Congress. The legislation died when Senate Republicans demanded upfront pay and benefit concessions from the United Auto Workers that union officials rejected.
Perino added, “Given the current weakened state of the U.S. economy, we will consider other options if necessary including use of the TARP program to prevent a collapse of troubled automakers. A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time.”
The announcement followed last nights’ Senate vote rejecting an automaker bailout.
I think Bush bailed because he doesn’t want the Big 3 to go down on his watch. Hopefully Obama and the Democratic Congress will have a Sister Souljah moment with the auto unions next year, although that may be wishful thinking on my part.
UPDATE BY PATTERICO: Ace has a post suggesting that the bailout is not a done deal.