Patterico's Pontifications

12/12/2008

Bush Will Bail Out Automakers

Filed under: Economics — DRJ @ 12:51 pm



[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.

— DRJ

UPDATE BY PATTERICO: Ace has a post suggesting that the bailout is not a done deal.

12 Responses to “Bush Will Bail Out Automakers”

  1. What I suspect will happen is 40 billion or so down the rat hole followed by BK in the spring. I could be wrong. The Big Three are perfectly capable of blowing 400 billion. Maybe they should start calling the models they build under Democrat control the Lada and the Zil. Keep the traditional names.

    Mike K (ee3203)

  2. I think you are entirely right, DRJ. The reason the Big 3 CEOs were so desperate to get the deal done this year is because they know the new Administration and Congress will re-structure a bailout deal to minimize the “give-backs” that would be asked of the UAW employees. I think the Bush Administration knows it too, and they are hedging their bets that providing something on the order of $10B now will hopefully preempt Obama/Pelosi/Reid from trying to make the total bailout $20B or even $30B in January. I hope they are right, but I have my doubts.

    JVW (bff0a4)

  3. Bush can’t spend the money. It’s illegal.

    “Treasury lacks the statutory authority to direct TARP dollars to the automakers. While the statute, passed by Congress in October, grants the secretary extremely broad discretion to decide how to employ the funds, it clearly limits the recipients to “financial institutions.”

    (via Michelle Malkin)

    Official Internet Data Office (d1195a)

  4. (And I’d have known that sooner if I hadn’t skipped over one of Patterico’s posts below. Sorry!)

    Official Internet Data Office (d1195a)

  5. #3- Official Internet Data Office: ‘It’s illegal?’

    Memo to you, and bcc:Michelle Malkin-

    ‘Statutory authority’ has never been much of a road block to the Bush Administration.

    Here’s one. Congress Shall Have The Power To Declare War.

    Read that someplace in an old document. Something called the Constit- something or other. Probably been in a Maryland landfill by now.

    Bush will loan (not bail out) GM, Chrysler and Ford using the old standby- national security. And given their contribution to national defense in wars past, they’ve earned a loan.

    DCSCA (d8da01)

  6. Congress Shall Have The Power To Declare War.

    Are you suggesting that Congress didn’t declare war for either middle-eastern conflict?

    Scott Jacobs (90ff96)

  7. Thanks for the update, Patterico. My strong belief that Bush doesn’t want the Big 3 to go bankrupt during his term probably affected how I read the linked article and thus how I wrote the post.

    DRJ (b4db3a)

  8. Well, Barbara Boxer’s contribution to the 1991 Gulf War debate was singing “From a distance.” Brilliant. Gore basically sold his vote for the war in 1991. Blago has a long and honorable precedent.

    I keep hoping Bush will decide this is not what he wants on his record but I’m not optimistic.

    MIke K (ee3203)

  9. What did Pappy Bush yell as he hit the silk, leaping from his burning Graumman TBF Avenger torpedo bomber, loaded with many converted-auto- industry-war-plant-parts in 1945?

    “Bail Out!”

    W outta remember that. Pappy does. America owes the big 3 a bridge loan, even if it is only delaying the inevitable for Obama to handle. Then the slate is clean.

    DCSCA (d8da01)

  10. Why doesn’t Bush just say the automakers should go through a reorganization, and he will help them out once they file?

    Patricia (ee5c9d)

  11. DCSCA, mixing your BDS with a little barely-hidden anti-asian xenophobia. Great combination.

    SPQR (72771e)

  12. SPQR- “You ahead, in a Ford; Way ahead, in a Ford…” Louis Armstrong, Ford Motors TV commercial 1967.

    DCSCA (d8da01)


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