Bush’s Parting Bailout?
Perhaps congress wont bail out that automakers. If they don’t, maybe they’ll opt for that pre-negotiated bankruptcy which will allow them to bust the union or get the concession from the union that it wants. The problems with the car makers goes far deeper than the labor unions, regardless of what Fox News wants people to believe.
If congress does nothing, it wont have to face the wrath of the American people whom don’t seem to want any part of this. Seem to be bailouts every where but no one is bailing out you or me. IF congress does nothing the automakers will likely find a way and if they just can’t find a way, then Bush’s administration can step in and do the dirty deed.
Bush is on his way out, so it wont hurt him politically and is in position to keep the three from going under and taking the American economy deep into recession. Canada will also be hurt badly. Canada has a lot of auto parts factories. Or they did ten years ago.
Its time to watch and see what happens. It will likely not be boring.
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Tagged with: AutoMakers • Bailouts • Economic Crisis 2008
Filed under: Politics • US Politics
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Mexico and Brazil will be the countries affected by the failure of the American auto plants. One of my Ford work trucks was actually built in Mexico. I used to be a union leader when I was a machinist so you cant call me a union basher. The union contracts crippled the auto industry and Clintons NAFTA agreement with mexico allowed many manufacturers to flee to mexico for cheap labor and no tariffs. Many auto plants in Canada were shut down during contract negotiations and moved to mexico. This is a simple case of killing the golden goose. The American auto industry, GM in particular, is prone to diluting its own market share. Why would anyone market the same cars under three or four brand names. There is no difference between a buick, oldsmobile, pontiac, or chevrolet. There is so much overhead carrying all these lines. They should have merged the brands ten years ago. Wake up and quit blaming Bush for everything. I am still waiting for the wonderful changes that the democratic controlled congress promised two years ago. Can you think of anything that these people have achieved in the last two years? Including the Messiah BHO? Eagerly awaiting you enlightened response! Ha Ha!
I didn’t bash bush in this. It politically makes sense for him to make this happen. It wont hurt him, it will hurt congress as the American people don’t want a bailout but they are wrong. Unless we want a depression we must act, its very simple.
Canada though, it was covered under NAFTA, I guess the lower wages did in Canada. My last wife was from Canada and when I went to Canada I learned the factories there were already in trouble. That was before NAFTA. She worked for one of the plants at one time. They made wind-shields. Because things were going bad long before NAFTA, I suspected that things had changed. Canada has not been a good friend to the US as far as I’m concerned.
The democrats can’t fix this over night but under Obama things will improve, after they get worse. You’ve not followed me closely on Bush bashing and the economy. This problem actually started with Regan but Clinton too had his hands in this problem, NAFTA is not part of the problem. I am generally for leveling the playing field, I prefer no protectionism of any kind but I recognize sometimes we have to have them in place.
I bash Bush for several things, weakness, corruption and torture being at the top of the list. He allowed Cheney to userp him which makes his presidency a failure. No way around that.
PS, I don’t expect my views to be very popular amoung expats and even less popular amoung southerners and I’m okay with that. :) I’m very awake.
Great post. This bailout has some very interesting effects on both the economy and the capitalist system as a whole. The new president will be making some dramatic moves to help revive the economy. If we can help the people that need to refinance their homes and shore up housing values it will go a long way in reducing the need for future bailouts.
Adam Ferguson’s last blog post..An Open Letter to the President-Elect
Housing values are falling because housing prices were inflated and not true indicator of their value. Some of the banks actually encouraged this as it drove the profits of derivatives up. I don’t see house prices rising back to their pre-October values. That’s why the banks continue to refuse to lend. They need the case for the coming losses that are on their way. If GM and Chrysler fail, we ain’t seen nothing yet.
Hi Rusty!
I agree with you about the housing values being inflated. Before the bubble burst anyone could get a inflated home appraisal value. Then to make things worse the mortgage lenders like Countrywide were lending up to 120% of a homes value. I just read the open letter to the president elect. Kind of reminds me of a scene from wild kingdom where the jackals and hyenas are fighting for the rotting pieces of a wilderbeast. The refinancing schemes are the worst culprits in the mortgage mess. People constantly drain the equity in their homes to buy crap. This guy wants more of that with even less restrictions. I think I will just stick with my Nigerian banker that sends me offers in my email.
I was right about who and how the automakers would be bailed out. I know you hate that. LOL :) Notice I wrote this more than 10 days ago. Even before the automakers last stand on capital hill.
I even think the republicans got together with Bush and he told them to vote it down in order to make them look better in the next election.
That there were problems in the housing market is well founded. The experts that I talk to have told me that Greenspan really missed the boat on that. He thought it would self correct. He admitted that he was wrong about that.
I like what I hear out of Obama, he sees the path to take is regulation when needed. Seems pretty basic now. The markets don’t aways do what they should do.
I use to notice a certain cycle in the Federal Government that is playing out in the financial markets. The people that would get a new project started where never the same people that stayed after it was up and running. This way they got credit for it going well but if it blew up, they’d be long gone by then.
Seems a lot of bankers took huge risk that paid off for a while, got their multi-million dollar bonuses and took to the hills before it all fell apart.
Too much regulation is bad, not enough is also bad. No one, include Clinton, congress and Bush wanted to put the breaks on the house boom as it would have slowed the growth. I believe Obama would have done something about it.
I to agree with your post, I work in the real estate industry and its hard not to notice the amount of home owners struggling just to keep a roof over their heads right now, It seems that only the largest of companies and business has benefited by the bail out money, the quote of too big to fail ringing true. It’s a shame that the Obama and co did not put more stringent conditions on this bail out money, as the banking system seems to be hording the cash right now, thus no lending to the markets like ours for new investment etc.
Obama wasn’t in office when the legislation for the bailout money for banks was approved, Bush was. That Republican controlled congress drafted teh legislation and that Repulican president approved it.
But you’re not the first that I’ve seen attribute that to Obama.
Fox news is doing it job of spreading lies well.
When Obama makes efforts to get the money back, Fox news claims he’s against capitalism.
Wake up people, its snowing, even when its not cold.