Jan 02 2009 - Seattle Times
THE latest request for bailout money from the federal government is from commercial real–estate developers. Somewhere the bailouts have to stop, and let it be here.
It was necessary in the September crisis for the Treasury to help the banks. Panic had created a domino effect. The international banking system threatened to fall as a whole, which would be unthinkable. For 75 years, the federal government has insured deposits in commercial banks, largely to forestall such an event.
Dec 30 2008 - Times Union, Albany NY
by PETER S. CANELLOS
In the eyes of the American people, hundreds of billions of dollars in losses on Wall Street is a tough problem, but tens of billions of losses in Detroit is a national embarrassment. How else to account for the relative ease with which the taxpayers and their elected representatives acquiesced to a $700 billion financial–industry bailout, compared with their principled resistance to a $15 billion investment in the nation's carmakers?
Opposition to providing government assistance to General Motors and Chrysler was so powerful that an aid package hammered out by the White House and Democratic leaders couldn't get through Congress, despite the certainty of hundreds of thousands of job losses if the companies went out of business. At the last minute, President Bush provided stopgap relief through the pool of money reserved for the financial companies.
Editor's Comments:
Canellos like the other liberals won't admit to the facts. He talks about the housing fiasco without once blaming liberal Democrats like Barney Frank, where most of the blame should be placed.
And then he goes on to the auto industry and he blames management for poor quality and fuel efficiency. Yet it was Canellos' favorite unions who are largely responsible for quality. They make the stuff. And fuel efficiency? Well, with union contracts, US manufacturers could only make a profit on the big machines, the ones that get less miles to the gallon. OK, I blame management for agreeing to those union contracts, but much of that happened years ago porior to the current management teams and the US government certainly arranged the cards in favor of the unions. bbm
Dec 28 2008 - The Independent Institute
by Robert Higgs
Turned away by the Senate, the Big Three auto makers have resorted to begging the Bush administration to rescue them from the plight in which they now find themselves as a result of decades of poor management. Wailing and gnashing of teeth are all the rage in Washington as these wannabe plunderers warn us of dire consequences unless the government acts as the middleman in their attempts to raid the taxpayers’ bank accounts.
Well, ho–hum, auto makers are scarcely unique in their lack of scruple and their desire to loot the Treasury. What strikes me in the latest reports on this sordid business is not so much the auto executives’ undignified prostration and supplication before the Almighty Government, but the statements being spewed out by our ever–faithful public servants.
Perhaps the single good thing that might have been said about the George W. Bush administration is that its spokespersons sometimes talked as if they supported the free–market system, even if they virtually never acted accordingly. Now, however, even the pro–market talk has gone by the boards.
Dec 28 2008 - Town Hall
by Richard Olivastro
The domestic automakers are in ‘Intensive Care’. The bailout medicine being injected as an IV drop by the outgoing Bush Administration is a $17 billion dollar placebo. As prescribed, it will neither cure the patients nor help the workers whose union is not cooperating.
While the excessively high labor, benefit and pension costs contracted over the years by the three automakers can be described as a virulent out of control virus, a more apt description is several bad cells that, over the years, mutated, multiplied, grew into bulbous tumors, and metastasized onto the bone of the businesses.
Neither President Bush nor President–elect Obama are willing to face all the facts.
Dec 27 2008 - Seattle PI
by PETER S. CANELLOS
WASHINGTON –– In the eyes of the American people, hundreds of billions of dollars in losses on Wall Street is a tough problem, but tens of billions of losses in Detroit is a national embarrassment. How else to account for the relative ease with which the taxpayers and their elected representatives acquiesced to a $700 billion financial–industry bailout, compared with their principled resistance to a $15 billion investment in the nation's carmakers?
Opposition to providing government assistance to General Motors and Chrysler was so powerful that an aid package hammered out by the White House and Democratic leaders couldn't get through Congress, despite the certainty of hundreds of thousands of job losses if the companies went out of business. At the last minute, President Bush provided stopgap relief through the pool of money reserved for the financial companies.
Editor's Comments:
Lots of things to question in this article: First, he blames everybody but the true culprits in the housing mess. Namely, Democrats like Dodd and Barney Frank.
Then he says that the auto industries' only problem has been the downturn of the economy. Hmmm. That hasn't bankrupted any other car company. And though he mentions unions in his assessment of auto problems, the unions only did their job. Fight for the workers. It was the imbalance in union power allowed (promoted) by the government that got us into problems. bbm
Dec 27 2008 - Economic Policy Institute.
by Robert E. Scott
If bankruptcy shuttered one or more U.S. automakers, the effect would be the loss of up to 3.3 million jobs in the U.S. within the next year, according to this new briefing paper released by EPI. Michigan alone could lose over 400,000 jobs, and stands to be the hardest hit state both in the number of jobs lost and the share of total state employment (8.9%) lost. If the Big Three fall, they would take down more than auto worker jobs: when the wages from those auto sector jobs dry up, an additional 576,700 to 2.1 million "re–spending" jobs would be lost. The report lists possible job losses in each state and the District of Columbia.
Dec 26 2008 - Seattle PI
by SEATTLE POST-INTELLIGENCER EDITORIAL BOARD
In Detroit, if your company is going bust, you get on a private plane, ask D.C. for a bailout, and then come back in an SUV to ask again. In Japan, one year of losses may lead to the departure of Toyota's president.
Japanese culture promotes the idea that when things go wrong for a company, somebody should take responsibility. The prestigious Asahi newspaper reported this week that Toyota's Katsuaki Watanabe will step down in the spring. The company denies any decision.
When Sen. Chris Dodd suggested recently that General Motors' Rick Waggoner should go, some in Michigan were offended. But most Americans would join the Japanese public in thinking that a resignation can be an appropriate gesture. If Watanabe is going to wait to quit until spring, here's a chance for GM to steal a lead on Toyota.
Dec 26 2008 - Seattle PI
by Deroy Murdock
As recession–racked Americans try to enjoy this season of giving, this a season of taking for much of our political class. Their grabbing hands are everywhere.
Consider Caroline Kennedy. The late John and Jackie Kennedy's daughter hopes to fill Secretary of State nominee Hillary Clinton's soon–vacant Senate seat. Never mind that Kennedy is a politically inexperienced mom and philanthropist who aims to expand her family's Senate profile, as if she were Lady Caroline of Gotham in the House of Lords. Kennedy should have stated her case privately to Gov. David Paterson, who will appoint Clinton's successor. Instead, she hired a campaign consultant and is trying very publicly to squeeze Paterson in a vice. Kennedy's "my, me, mine" approach is beyond tacky and should derail her senatorial ambitions.
For his part, accidental governor Paterson likely has depleted whatever good will he enjoyed after succeeding his hooker–chasing predecessor, Eliot Spitzer. Facing a $15.4 billion state–budget shortfall, Paterson recently proposed $4 billion in higher taxes and fees. But rather than a painful Doberman–like bite, namely an across–the–board income–tax boost, Paterson unleashed 88 new and increased taxes. Like a swarm of hornets, these sting all over.
Dec 25 2008 - Investor's Business Daily
by INVESTOR'S BUSINESS DAILY
Autos: The government gave the Big Three a $17.3 billion bailout based on the idea that both management and the unions would make concessions. Now the UAW says no thanks. Can we have our money back?
Last week's deal was supposed to hold both the managers' and unions' feet to the fire. In handing out the taxpayer money, the White House insisted the auto union cut worker pay roughly to the levels of their successful competitors, Toyota, Honda and Nissan.
For $17 billion in emergency bailout cash and possibly much more later, it was a reasonable request. As President Bush said, "The time to make the hard decisions to become viable is now — or the only option will be bankruptcy." He added that a deadline of March 31 for the industry to prove its "viability" and other limits "send a clear signal to everyone involved."
Well, if so, the United Auto Workers didn't get it.
Dec 24 2008 - Town Hall
by Terence Jeffrey
The Ghost of New Years Yet to Come wakes you from a fretful sleep and brings you to a cold December day in the not–too–distant future.
The long–lived baby boom generation is now in full retirement. A deep recession has set in. Fiscal crisis looms.
Tax revenues are dwindling. With the national debt having climbed to remarkable heights, creditors are wary of loaning new money to a U.S. government struggling just to meet the Social Security and Medicare obligations promised to retired workers.
America's balance sheet looks then like General Motors' does today: too much debt, too many promised benefits.
A lame–duck president decides he will not allow Social Security and Medicare to default on his watch. He will pass the problem to his successor.
Dec 23 2008 - Investor's Business Daily
by PETER MORICI
President Bush has agreed to lend GM and Chrysler $17.4 billion on the condition these firms complete a plan to accomplish financial viability.
The agreements set goals for automakers: converting two–thirds of their debt into equity; paying company stock to fund one half of the Voluntary Employee Benefits Associations, which fund retiree health care benefits and remove these costs from future liabilities; aligning wages, benefits and work rules with U.S. Nissan, Toyota or Honda operations.
These goals are generally consistent with the conditions I outlined as necessary for the Detroit Three to achieve viability when I testified before the Senate Banking Committee on Nov. 18. For example, laid–off workers could no longer sit in the Jobs Banks collecting 90% of pay and benefits indefinitely and engaging in productive activities like pinochle.
Financial viability requires projecting a positive net present value, taking into account all current and future costs. It does not require a positive cash flow by March 31. Wage and benefit cuts need be accomplished only by Dec. 31, 2009.
Dec 22 2008 - Washington Times
Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses and other benefits last year, an Associated Press analysis reveals.
Dec 22 2008 - The Nation
by Christopher Hayes
As my colleague John Nichols noted, the House passed the $15bn auto–bailout deal yesterday, with little Republican support. It now goes to the Senate where it's passage appears doomed, according the Times. I feel incredibly conflicted about the deal, but end up thinking that allowing the industry to implode, in a manner not dissimilar to Lehmann Brothers, is likely to be incredibly painful for millions of people. That said, a smart observer who's been following the legislative wrangling over the issue, writes in to tell me that he thinks this version of the bill is a terrible deal for the Democrats, politically:
Dec 21 2008 - Forbes.com
by Shikha Dalmia
Big Labor is a big problem for automakers' survival.
With the late–night demise of legislation containing $14 billion in emergency loans to Detroit's automakers, pressure is once again mounting on President Bush to step in. And he is reportedly thinking of doing just that. But the very thing that doomed this legislation will also doom any effort to rescue the industry: union intransigence. If Bush cares more about taxpayers than kudos, he should decline.
The legislation, backed by Sen. Bob Corker, a Tennessee Republican whose state itself is home to GM facilities, was the industry's best hope to return to health. It stripped some of the green baggage of the House bill that would have consigned Detroit to producing not cars that sell but what eco–warriors want. Nor would the legislation have handed quite as expansive powers of micromanagement to a car czar, forcing companies to obtain approval for basic product and capacity decisions.
Dec 21 2008 - Heritage Foundation
by Stuart M. Butler, Ph.D.
Last week the Bush Administration tried to find ways to use the funds available in the Troubled Assets Relief Program (TARP) to bail out the Detroit automobile companies. That decision is just the latest of weekly, and sometimes daily, Administration reinterpretations of the TARP program's purposes. And no doubt the incoming Administration will continue this creativity and TARP will increasingly become a White House fund for politically sensitive companies.
With $15 billion of TARP funds still immediately available, and another $350 billion available if congressional action does not block access to the money, it is time to end this program by canceling further Treasury authority to allocate funds. To the extent that new financial crises materialize, recent experience suggests that the Federal Reserve Board is best able to handle them and would do so while resisting political pressure. If additional steps are needed in the future, the White House should request new congressional programs or authority with far greater clarity and restrictions on the uses of money. It is time to end the continued use and abuse of TARP funds.
Dec 20 2008 - Investor's Business Daily
by INVESTOR'S BUSINESS DAILY
Industrial Policy: President Bush's $17.3 billion bailout for the auto industry just kicks the can down the road and does little to solve Detroit's long–term problems.
Just one day after it was reported that Bush was contemplating a "structured bankruptcy" for GM, Chrysler and possibly Ford, the White House announced it would make more than $17 billion in loans available to the automakers.
It's a lousy deal that rewards bad management and a stubborn United Auto Workers union. Together, they've made a series of bad decisions led to the U.S. industry's precipitous decline. American automakers were once dominant; today, they control less than half the market. This bailout will do nothing to change that.
Worse, as with the recent bank bailout, the U.S. government might soon become a controlling shareholder in the auto industry, since part of the deal requires GM and Chrysler (Ford isn't taking part) to give the government stock warrants in exchange for loans.
Dec 20 2008 - Seattle PI
by SEATTLE POST-INTELLIGENCER EDITORIAL BOARD
It's extraordinary to consider $17.4 billion as a temporary reprieve for the auto industry. Then, "these are not ordinary circumstances," President George W. Bush said last week.
"In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action," he said.
But the real task is to restructure the industry from the ground up. That initiative will be handed over to the new presidential administration next month.
Indeed, the Bush White House seemed to be caught up in its ideology. The day before he announced the funds, the president suggested that bankruptcy might be a better option because he was worried about "putting good money after bad." The message was: No matter what, these companies might fail.
Dec 20 2008 - Seattle PI
by SCOT LEHIGH
It's a strange circumstance indeed when one finds himself saying, jeez, I sure wish people would pay more heed to Dick Cheney.
And yet, the view here is that Senate Republicans should have listened to the vice president when he reportedly urged them to support a bridge loan for American automakers. Instead, they dug in, scuttling a congressional deal and leaving it up to the Bush administration to take unilateral action to help the Big Three.
At a time when the U.S. economy is hemorrhaging jobs, it's astounding we've arrived at this juncture.
Yes, people are angry at Detroit, which has been frustratingly myopic for far too long.
Dec 19 2008 - San Francisco Chronicle
WASHINGTON (AP) ––Citing danger to the national economy, the Bush administration approved an emergency bailout of the U.S. auto industry Friday, offering $17.4 billion in rescue loans in exchange for deep concessions from the desperately troubled carmakers and their workers.
Dec 19 2008 - Seattle PI
by DAN K. THOMASSON
WASHINGTON –– Now they tell us that there is a loophole in the bailout legislation that could negate pay limitations for chief executive officers. In other words the government, without some extra congressional action, may not be able to deprive top execs of those big–time compensation packages that helped get the economy where it is today.
It seems the bailout bill, thanks to some last minute maneuvering by the White House, contains a provision that restricts CEO income when their institutions sell their troubled assets to the government in an auction. But wouldn't you know it, all the money doled out so far from the $700 billion rescue fund has been used to buy the bad loans directly, not through the auction process despite the Treasury Department's initial plan to do so.
