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Saturday, December 13, 2008

New Democrat

George Bush may as well just start calling himself a Democrat, as much as he's become in love with the idea of big government and government control of industry.

Senate Republicans, rightfully, blocked the band-aid "rescue" package for Detroit's automakers, and now Bush has decided to look for a way to use the $700 billion bank bailout package to skirt the Senate and help them anyway.

I predicited a few weeks ago that congress would come up with a package just unpalettable enough to get it filibustered so the formerly Big 3 could file bankruptcy. It looks like that is what happened, but GWB doesn't want to see it happen.

I can see his point, to an extent. At the beginning of what looks to be a long recession, having the automakers become wards of the court may deepen the economic downturn. On the other hand, spending billions to prop them up until the time is more appropriate for failure doesn't make fiscal sense when we've already increased the deficit more in 3 months than Bush 41 did in 4 years! Remember back in the 80's when we screamed about Reagan coming up with a $500 billion dollars of deficit spending in his second term. Hell, we've done better than that this quarter!

A month ago the CEO's of the Big 3 begged for $25 billion as enough to get them through. A few weeks later, they said they underestimated, and needed $34 billion. Economists who testified before Congress said that $80-120 Billion was probably a more realistic figure. So Congress of course tossed all those numbers out, and came up with $14 billion as a patch for the hole in the side of the Titanic.

It appears the final outcome will be Chapter 11 for GM and Chrysler; the question is how long do we keep them above water before it happens, and who's the next industry to get bailed out?

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2Comments:

OpenID kevinaom said...

The fact that Bush is a drunken sailor on a spending spree is not new news. Actually, Government deficits and the size of Government have increased dramatically since he came to office. Again, as I have always said, watch the words not the deeds. I would take the fiscal conservativeness of Clinton over Bush anytime.

Now, the autos: I 100% agree with you!! They should not be bailed out and and should go into bankruptcy. There is something very wrong when a Country asks people making $10 with little to no health care to bail out people making $30 per hour with full, free benefits. Having worked in that industry for four years I know how pathetic it is as an industry.

The economy has little to do with their collapse. They have not made money since the mid '90s. The were struggling when everyone was making money.

6:29 AM  
Blogger Crazy Politico said...

Actually, Ford and GM both made billions as late as 2004, since they were selling SUV's and trucks, which make money, like hot cakes.

What they haven't had is a cheap enough to build small car that they could both sell, and make money off of.

As far as Bush spending like a drunken sailor, I resent that. I was a drunken sailor, and never spent like that.

However, Congress, not the President, originates spending bills. So there is plenty of blame to go around. The only change since the Democrats took over in 2007 is that now earmarks go into concurrent reports instead of the bills. That way no one has to actually vote on them.

10:38 AM  

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