Patterico's Pontifications

12/12/2008

Using TARP to Bail Out Big Three: Illegal?

Filed under: General — Patterico @ 9:48 am



Via Michelle Malkin comes a link to an argument that using TARP money to bail out the Big Three would be illegal.

It’s a pretty convincing case. Then again, President Bush is famous among lefties for allegedly not caring about the law. Whether that’s a fair characterization or not, the fact remains that he has been discussing it, according to numerous news reports.

The possibility of a TARP bailout may be the only thing that kept the market from diving 1000 points today, as I had predicted last night. If Bush doesn’t dip into TARP to help the Big Three — and I’m not saying he should — we may see the stock market ugliness that we mostly missed today.

Meanwhile, at The Jury Talks Back, Scott Jacobs has an amusing statement from the Big Three that will bring a bitter smile to your face.

37 Responses to “Using TARP to Bail Out Big Three: Illegal?”

  1. Why are you folks so disappointed Bush would consider something so extralegal as using TARP money to bailout 2 of the Detroit 3? After all, he’s just proving how irrelevant Nancy and Harry are to the process, and we know you like that when he does that.

    Seriously, though, Bush doing this would send a rather painful message that the executive can unilaterally rescue a wishy-washy Congress from having to make an actual decision. And it’s going to get even more painful when Obama ends up NOT making these sort of decisions when his own Congress gets a case of the Linguini spines.

    Brad S (9f6740)

  2. Malkin is hardly an expert source for ecomonic viability on anything.

    DCSCA (d8da01)

  3. DCSCA – English is your 3rd language? Or is reading comprehension just not your thing?

    JD (6a82b7)

  4. Malkin is hardly an expert source for ecomonic viability on anything.

    Which is why she LINKS to the argument made by someone else you nitwit.

    Scott Jacobs (a1c284)

  5. Scott – Quit making fun of nits.

    JD (6a82b7)

  6. The Governor of Michigan says the vote against the auto bailout is “Un-American”:

    “Michigan Governor Jennifer Granholm (D) said it was “un-American” for senators to have voted against approving a bailout of troubled automakers last night, saying their vote may cause a recession to become a depression.”

    Governor Granholm was born in Canada. Now that’s what I call Un-American!

    Official Internet Data Office (d1195a)

  7. whether it is illegal depends on what the meaning of ‘institution’ is. Obviously the anti-bailout Heritage Foundation would like it not include the likes of Detroit, others will have a different interpretation of the statute.

    and for the 1,000 point drop, perhaps the lack of such is not so much the market thinking a bailout is still coming but that the consequences of no bailout ain’t as bad as Ford, GM and Chrysler have threatened.

    steve sturm (369bc6)

  8. What IS teh market sitting at right now, anyways?

    Scott Jacobs (a1c284)

  9. #4 Scott- A link is a conveyance. A conduit. In her case, to promote the link is to agree with its content. I’d link you to an argument made by someone else in your defense but you distain the support of nitwits.

    DCSCA (d8da01)

  10. #3 JD, actually, it’s my fourth language. Private schools are so much better, doncha think? Or don’t you?

    DCSCA (d8da01)

  11. #2 DCSCA wrote: Malkin is hardly an expert source for economic viability on anything.

    She runs a profitable business whereas the captains and kings of industry that run the New York Times and the LA Times do not. Yet these proven liberal failures continuously look down their noses and lecture the unwashed masses about finance and economics.

    Perfect Sense (9d1b08)

  12. it’s my fourth language.

    Work harder at it. You are failing to understand the words you read.

    Scott Jacobs (a1c284)

  13. “She runs a profitable business….”

    Care to describe HotAir’s revenue source?

    Brad S (b5b919)

  14. Care to describe HotAir’s revenue source?

    Ads, like most things. But the Blog isn’t the business, it is but a brand/face of it.

    Scott Jacobs (a1c284)

  15. Hot Air’s revenue source is a combination of SDI technology, Karl Rove payouts, and blood pastry coupon books.

    They aren’t ideologically in lock step with CBSNBCABCNYTLATWAPOETC, so they are obviously evil.

    Juan (4cdfb7)

  16. The BDS is still strong in here…

    It’s craven, racist, and sexist (considering they’re attacking a woman of color behind her back)…

    If one disagrees with another’s political views, that does not automatically invalidate them. Unless you’re from Planet DCSCA, apparently…

    A more appropriate (and mature) response would have included either a rebuttal or a link to a rebuttal–not just a sophomoric ad hominem.

    jtb-in-texas (7cf1cd)

  17. #12: the LAT had positive cash flow of $100 million.

    Scott #15: I’m sure those banner ads are throwing millions her way.

    steve sturm (369bc6)

  18. Wjhen asking if the president can skirt the law on bailout ideas, we should ask: Do we even have a legal system?

    Hillary is, without question, ineligible to be Secretary of State, citizens each have specific standing if their president has not demonstrated eligibility for his office (I think he’s eligible, btw), I have the right to put up a flipping billboard with my opinion on an election, unrestricted by Congress or the FEC, I have the right to carry a gun in Anacostia or Harlem, I have the right to smoke at my bar (bleagh), and GM has the right to determine which employees they will assemble with.

    We have a sense-of-the-judiciary system. Not a legal system. The president can do whatever the hell he wants, so long as it doesn’t offend the wrong people. Laws are a lie at that level

    Juan (4cdfb7)

  19. Steve Sturm, the LAT can’t afford to employ its best and brightest. What a completely idiotic example of financial success!

    Of course Malkin isn’t making millions. She’s a David fighting the Goliaths… she is making far more than the LAT times is per employee. I don’t like Malkin’s manner at all… but she’s one of many success stories of the internet, and anyone who refuses to accept she’s done better than the LAT lately is a mental freak.

    Juan (4cdfb7)

  20. #18, could it just be that some folks are jealous of people seen on TV? That some people feel the same irrational hatred and fear of Ms. Malkin that others feel about Chris Matthews?

    Ms. Malkin’s business interests are much more successful than most Americans. She has a point of view that some find irritating, while others find refreshing. It’s worth pointing out that those who disagree with her can skip her blog, browse post her columns on TownHall, block her tweets, avoid reading her books, and change the channel when she’s on TV.

    I wish they’d also grow up and act like American adults; but I suppose I’m expecting too much from them.

    jtb-in-texas (7cf1cd)

  21. Juan: the great thing about statistics is it lets anybody just pick the one that bolsters their side. So what that Malkin makes more per employee than the LAT? So she makes enough money from her fraction of a cent per click to pay her rent, wow, that is one incredible internet success story. What kind of a market cap would that result in? Given my choice, I’d take the LAT over her business any day of the week.

    And you’re equally off with your first point. Best and brightest according to who? You? Patrick, who long ago dropped his subscription? The staff they’re dropping are not those who draw the readers, they’re the reporters and writers who may write interesting things but just don’t draw the readership sufficient to justify the salary. And they’re dumping people to maintain their margins, or at least keep them from falling as far as they would if they maintained the higher staffing levels. Dropping unproductive employees and trying to maintain margins, sounds like good business practice to me, but I’m an idiot with no business sense.

    steve sturm (369bc6)

  22. DisTain? Heck I thought it was disdain. But what do I know I wuz edificated in public schools. Graduated Lawdywhodathoughtit.

    Is anything illegal in Washington now?

    Bosslowrider (94c787)

  23. Steve, the company that you are wanting so much is bankrupt.

    You’re crazy if you think I’m cherry picking statistics.

    What Malkin has accomplished is pretty amazing. I would not be surprised if she makes more than the highest paid LA Times employee. Would you? The LA Times is shrinking in every way… it’s debunked and associates with criminals at every turn.

    Malkin is indeed just one person and probably doesn’t bring in the revenue the paper if the USA’s 2nd largest city does. How pathetic you are to make the comparison. Imagine how embarrassed LA Times must be to be reduced to only winning comparisons against solo blogs.

    And reading your comments, it’s pretty clear you’re the one with the absurd use of statistics. Your words: “I’m an idiot with no business sense.” have the ring of truth to them.

    Juan (4cdfb7)

  24. #22 wrote regarding Malkin: I’d take the LAT over her business any day of the week.

    At what price will you “take the LAT?”
    How will you finance that purchase? With debt or equity, or a combination of the two?

    Perfect Sense (9d1b08)

  25. http://www.latimes.com/business/careers/work/la-fi-tribune11-2008dec11,0,565784.story

    The LA Times can’t seem to pay what it owes its own employees, its tax obligations, etc. Their own attorney describes their business as in “a precipitous decline.”

    Meanwhile, Malkin makes a profit. Alone. She makes more than all of the LA Times put together, since the LA Times doesn’t make any profit at all.

    I’m not laughing. It’s a shame that the second largest city in this country has such an awfully lame newspaper. If Malkin were running the LA Times, we all know they would be making a lot of money.

    Juan (4cdfb7)

  26. Gee Juan, have trouble getting past the headlines? The PARENT of the LAT is bankrupt because IT has too much debt (taken on from its LBO, prior to which it was doing just fine) and can’t cover that debt from the (admittedly shrinking) cash flow from its business units. On a stand alone basis, the LAT has positive cash flow (which pretty much means, unless they’re selling assets, they’re profitable). The Tribune owns the Cubs, are they bankrupt too?

    And I’m embarrassed? I’m not the one who started making the comparison between Malkin and the LAT. And so what IF she makes more than the highest paid LAT employee. Again, you betray your lack of business knowledge: the OWNERS of a business (which she is) almost always make more than the EMPLOYEES of a business (unless that business is GM, where management has taken shareholder money and given it to the workers and retirees).

    Perfect sense: with as much borrowed money of course, the leverage is so much better! Know of anybody doing no money down loans? As for the price, assume $100 million as yr 1 cash flow, declining 20% a year, anything under $175 million gives a real nice return.

    steve sturm (369bc6)

  27. To be clear, I should have written: more than any single employee, not employees as a group.

    steve sturm (369bc6)

  28. Steve, I don’t like Malkin or the LAT. But you seem to really be consumed with anger and hatred.

    Why are so angry with me? you know I’m right… the LA Times is declining rapidly, and obviously unprofitable with the rest of the Tribune papers. That’s why they keep reducing their staff and size of their paper, why fewer businesses advertise with them, and why fewer and fewer bother advertising.

    Of course, the real problem is that the LA Times is such a terrible source of information. You’re crazy to rely on them for anything. You read this blog, so if you deny that you’re just a liar as it’s been easily established.

    Admit it: Malkin is the future and success. La Times is the past and failure.

    There is no reason to be upset about this. I think the left has as many or more great blogs as the right has. Many of them are also leaving the LA Times behind and I imagine, per person, many are making far more money.

    You do know why I compare them that way, right? It’s a pretty basic and honest way of making the comparison.

    Juan (4cdfb7)

  29. #12: the LAT had positive cash flow of $100 million.

    Sam Zell does not agree with your assessment, apparently – he’s made no bones about the fact that the main reason he bought the Trib was for the real estate holdings. Since those are currently in the tank, on we go towards bankruptcy proceedings. His play didn’t work (as of yet), he had no interest whatsoever in any of the papers (including the ChiTrib), hence the massive layoffs. While the other media properties are potentially quite valuable down the road (including the Cubs), the papers are nothing but declining assets for him (i.e write – offs).

    Dmac (e30284)

  30. A commenter had a good point: buy equity in a bank, have bank extend credit to auto companies. Actually given reserve requirements they can probably lend out even more than the 15 billion auto wants. Though, that would be so dastardly! telling banks what to do now that we own them!

    imdw (de7003)

  31. Measuring Malkin’s ‘success’ as fringe on a right wing carpet is a matter of context. Something, again, conservatives always overlook. The Empire State Building is a space program– to ants.

    DCSCA (d8da01)

  32. As much as readers here might like to think otherwise, the drop in LAT circulation (along with that of the other MSM papers) has less to do with what they put on their front page than the ability of people to get the rest of the paper (comics, movie listing, classified, sports scores) elsewhere, eliminating the need to buy a physical paper. The falloff in advertising (which affects the bottom line far more than the drop in circulation) also has less to do with the content of the front page than advertisers being enamored with internet advertising and shifting ad dollars away from traditional print (even without a circulation drop, papers would still be collecting less in ad dollars).

    As far as their reducing staff, like the car companies, they haven’t reduced them far enough fast enough to match the revenue. They’ve long had the luxury of being subsidized by classified and display advertising, but once they get their costs down, they will once again be profitable, albeit not at the level they were pre-internet.

    And as far as Malkin making more per-employee, BFD, I’ll take 1,000 employees generating $20,000 each in profit any day of the week. Relying on banner ads and hoping advertisers don’t realize that they provide a lousy ROI, yeah, that’s the future I want a piece of.

    steve sturm (3811cf)

  33. imbw, that’s a pretty interesting point.

    Sad to say that we’re approaching the point where the government has that kind of control. But if we do, at what point is the bank not the government, and at what point is getting the bank to bailout the big three unlike the government doing bailing out the big three?

    Of course, if the big three were viable investments, people would invest in them and they would have plenty of money for whatever they are pretending to do.

    (I know I shouldn’t include Ford in big three… sorry).

    Juan (4cdfb7)

  34. Apparently the GAO thinks Treasury has the authority? See here.

    Bob Loblaw (6d485c)

  35. Devotees to Michelle are Malkin tense.

    DCSCA (d8da01)

  36. “Sad to say that we’re approaching the point where the government has that kind of control. ”

    Sad that we’re giving away money and when we talk about putting conditions on it, we worry about ‘control.’

    imdw (1d0ada)


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