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For Senate Republicans, this is a "hill to die on"
Posted by: McQ on Thursday, December 11, 2008

I'm already tired of the Blagojevich scandal (an Illinois governor is corrupt? Well knock me over with a feather), but I remain concerned with this auto bailout and can only hope, with the White House caving in, that the Republicans in the Senate will make one final stand before their minority power is blown away for at least 2 years come January 20th.

Why? Because if this gets passed, I want Democrats to take complete ownership of it. It's going to be a debacle, and I want it to be their debacle. I don't want to hear "well the Republicans okayed it and the Democrats simply tried to make their plan work". Huh uh - I want it passed by a Democratic Congress and a Democratic President if it is to be passed. And I fear it eventually will.

Right now this is all about political CYA. The Dems don't want to see the unemployment numbers go up as they're coming into power. Nor does the present administration as they leave office.

The Dems also want a little Republican cover for this. This 15 billion is nothing more than a carryover to let the auto industry stay solvent until the Democrats take power and can put a more extensive and restrictive package together (like requiring that the auto companies be barred “from participating in, pursuing, funding, or supporting in any way, lawsuits (existing or contemplated) challenging State laws concerning greenhouse gas emission standards.”)

If Republicans want to retain any credibility at all as well as denying Democrats the political cover they desire, this is a legislative hill to die on. The Republicans in the Senate must refuse any sort of bailout and require Democrats to shoulder the entire package.

Yes, GM may actually go bankrupt in the meantime - but frankly I don't see the downside there when compared with the bailout alternative. And yes, there may be a temporary spike in unemployment. But a GM restructured to compete, without a "car czar" breathing down it's neck and demanding it manufacture vehicles the public doesn't want, is much more desirable.

To the Senate Republicans - say "no" to this travesty.
 
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And the auto execs respond accordingly.
 
Written By: CR
URL: http://
pedro likes the new dynamic of a narrow democratic majority. dems are too spineless to be the minority opposition party. republicans are too incompetent to be the majority. a deadlocked congress is a good congress. let’s work together and do nothing.
 
Written By: pedro the illegal alien
URL: http://
YES I agree
no one will get it if there is NO pain

Life is tough - so lets grow up a get on with it

Get this post out to newsmax or drudge it needs exposure
 
Written By: carson everett
URL: http://kit carson
It looks like the Republicans in the Senate got a spine. And I cheer them on.

For the next two years, as things go from bad to worse, Republicans have to go before cameras everywhere and say, "Democrats are in COMPLETE CONTROL of this place and the White House. They have done NOTHING, and in fact made things WORSE."

Then take a page from Truman’s 1948 re-election campaign, and run in 2010 against the do-nothing Congress and the do-nothing President. We will see then what happens.
 
Written By: James Marsden
URL: http://
Same as with the coming healthcare abomination, I agree 100%

Let Reid, Pelosi, Franks and the Lightworker reap the "rewards" of this action.

The GOP does not exist to provide them political cover.

 
Written By: shark
URL: http://
For the next two years, as things go from bad to worse, Republicans have to go before cameras everywhere and say, "Democrats are in COMPLETE CONTROL of this place and the White House. They have done NOTHING, and in fact made things WORSE."
AMEN

That fact needs to be driven home. The GOP becomes basically a powerless minority Jan. 20th

What happens next is the fault of 1 single party.

 
Written By: shark
URL: http://
I don’t like the auto bailout, but then I was not a big fan of the Wall Street bailout either, but, if you think about in the context of using government money to "create" jobs, if a few billion dollars allows a annual payroll of $200 billion to continue, that may be the cheapest "job creation" going.

Even if it’s only temporary, if just half of these jobs go away in the short term, that could be a crushing blow to our economy.

If we had a free market, I’d say let the cycle weed out the weak, and the whole will be stronger in the long run. But we don’t have a free market, and haven’t for over a century.

I guess the most practical solution I can see is to take bailout monies that are already approved and redirect them to the auto industry. The money’s gone anyway, but if directed to the auto industry it might prevent another big drop in consumption.

I think it’s important to note that spending by American consumers accounts for 70% of our economy. As consumption goes, so goes the economy, and as jobs go, so goes consumption.

Or, we could just take our medicine and take the big hit now, and in ten years or so, we could be stronger than ever, and maybe, end up with something closer to a free market. Still, if we let big companies and industries keep writing our laws, we’ll just be heading right down the same path again. And I don’t mean this as a "Republicans do and Democrats don’t", they both do it, and they both do it a lot, and it is the opposite of a free market when larger companies get the write legislation to protect them from competition.

I don’t like any of it one little bit.
 
Written By: CaptinSarcastic
URL: http://
Or, we could just take our medicine and take the big hit now, and in ten years or so, we could be stronger than ever, and maybe, end up with something closer to a free marke
Capt. - I like this option. Pay me now, or pay me later.... (Actually, I don’t "like" any of this, but this option is better for the long run.)
Republicans have to go before cameras everywhere and say, "Democrats are in COMPLETE CONTROL of this place and the White House. They have done NOTHING, and in fact made things WORSE."
James - Excellent! That is exactly what they need to do. Every single day.
 
Written By: jjmurphy
URL: http://www.allthatisnecessary.com
but then I was not a big fan of the Wall Street bailout either
Neither were most here
 
Written By: capt joe
URL: http://
OMG! pedro finally writes something I can agree with:

a deadlocked congress is a good congress.

Anyway, I’m afraid that enough GOP senators will cave to let this go through. They will be terrified of the specter of thousands of unemployed auto workers who will blame THEM for not pulling their fat out of the fire. Never mind that most of the (union thug) auto workers will NEVER vote GOP anyway, and that their union dues go to support the democrats (spit). Never mind that, no matter what happens, the GOP will be left holding the bag because this happened on Bush’s watch. I also much imagine that Dingy Harry is making it quite clear to wavering GOP senators that, if they want ANYTHING over the next two years, they’d better play ball. If they don’t, don’t even bother to put a bill on the floor ’cuz it ain’t going ANYWHERE. Capish?

Anyway, after we spent billions bailing out Wall Street, what’s a few billion more of Monopoly money to bail out The Big Three? Hey, it’s not like it comes out of congressional paychecks! Plenty more where that came from. When you’re trying to save the country, no expense is too great!
 
Written By: docjim505
URL: http://
that could be a crushing blow to our economy.
yeah, we wouldn’t want their plants to be controlled by a money making foreign car manufacturer would we, even if it does employ Americans.
The foreigners might not deal well with the unions, so scratch that idea.

Just keep buying into the whole crushing blow thing, and keep buying into the total economic collapse thing, and the whole national depression if GM isn’t GM any more and is controlled by Mybotsu when it cranks out Mybotsu Monstrosities instead of Suburbans.

No chance to restructure if they are forced into bankruptcy, it’ll all go completely, totally south, we’ll become a bigger banana republic than we’re already acting like. Yep yep yep.

The money’s gone anyway, but if directed to the auto industry it might prevent another big drop in consumption.
Even if two of the three automakers (or their masters) already have enough capital to handle their problems, let’s bail em out with government money.
It’s all ’government money’ right?

We must continue to make mistakes because we’ve already made some!
I love this justification!
I expect it’ll work as well as the Titanic going to all ahead full as it hit the ice berg.

 
Written By: looker
URL: http://
So you want Republicans to act un-republican to make the Dems look bad? Kinda sad that all you have left is the slim hope for future schadenfreude.
 
Written By: TomD
URL: http://
Okay:

This is an auto workers’ union bailout. Chrysler’s owners are flush with cash. Ford has the money and may not want to take the string Congress wants to impose; they don’t need the help. GM wants to build SUVs and trucks, not green cars - a great idea if you like money = but the Mistress Pelosi will crack the whip and run the GM into the ground.

My Senator, Richard Shelby, is trying to hold their feet to the fire. I have terrific respect for the man. To paraphrase Admiral Farragut, "Damn the Rhinos, full speed ahead."

 
Written By: arch
URL: http://
We must continue to make mistakes because we’ve already made some!
I love this justification!
Wow, you act like I’m the point man for these bailouts.

I think the $700B was a mistake, but that $700B is already gone, one way or the other, so I’m saying that if a few billion of that could keep some people for a while, it meets the goal of spending government money to keep people working, and if it’s $15B to keep a $200B annual payroll going, why not?

Do you think it makes any less sense than funding $200B in payroll for new projects?
keep buying into the total economic collapse thing
I don’t think we are risking total economic collapse over the auto bailout, it would just make a bad situation much worse. You do understand that 70% of our economy is based on spending by people with jobs, right?

The auto industry has served this country pretty well over the years, it’s not like we have to bail them out every day, and know this, all those union retiree packages will become the (discounted) responsibility of taxpayers going forward if they go bankrupt.

Or, as I said, maybe the best thing is to just let the chips fall where they may. That would certainly be my suggestion if we had anything remotely resembling a free market economy.
 
Written By: CaptinSarcastic
URL: http://

I think it’s important to note that spending by American consumers accounts for 70% of our economy.


Just as a note, not a disagreement about your argument, but this is not literally true. That is an accounting fiction. They account for 70% of final net spending, not actual (or gross) spending.

Actually business spending is larger and by a good bit. However, in putting together GDP accounts if you counted every bit of spending by business or production before the final purchase it would lead to double (actually multiple) counting.

Let me give a simple example. A raw material producer sells his material for 1 dollar. The purchaser works on it and sells it to the next person (merchant) in the process for $1.30. He sells it to the consumer for $2.

Most production is far more complex than that and the spending is far larger in relative terms. The key though is that $2.30 was spent to produce a $2 sale. Yet all three of the businesses made a profit. This confusion infects most economics, especially the macro side, as they reason based on the idea that the accounting represents the actual spending going on, when it does not. Thus consumer spending is seen as far more important than it is, and thus much theory and policy is aimed at constantly goosing it, and consternation as to why the effects are not what simple accounting identity reasoning would suggest.
 
Written By: Lance
URL: http://riskandreturn.net
Thus consumer spending is seen as far more important than it is
What happens to all that production spending when consumers stop (or slow down) buying?

 
Written By: CaptinSarcastic
URL: http://
What happens to all that production spending when consumers stop (or slow down) buying?
Recession, though that is just because of the shifts in how spending is allocated. Many countries grow their economies just fine with a far smaller share of final net spending being consumer led. Getting from here to there is the issue, not the ultimate share that consumers represent.

Anyway, my point is that it isn’t true.

Interestingly Keynes knew that, even if most Keynesian’s do not acknowledge that. Keynes felt the reason to concentrate on consumer spending was that it was more stable, while business spending was much more volatile.

Being the politician that he was (I am a big admirer of Keynes by the way, I just see him for what he was, and why he said the things he did) he built a framework to justify what he wanted done. Thus his theories were a special case, not a General Theory (despite the title of his book.)

Hayek used to say that if Keynes had lived longer he would would have campaigned to undo the policies that were built on The General Theory once the crisis of the 30’s was well in the rear view mirror to avoid the inflation that eventually came based on it. I think he was right. Certainly the General Theory contradicted much of his earlier work, I doubt he would have minded contradicting himself again at all.

To push your question further along, what happens to all those businesses when the consumers take on all the debt necessary to keep the spending going once it becomes too unstable?

Oh, wait. We are finding that out now, a meltdown of epic proportions.
 
Written By: Lance
URL: http://asecondhandconjecture.com
and know this, all those union retiree packages will become the (discounted) responsibility of taxpayers going forward if they go bankrupt.
Lance - do you know if (a) these are Taft-Hartley plans and (b) if so, what the PBGC obligations are in that instance?
 
Written By: Phil Smith
URL: http://
GM, called by some the world’s biggest healthcare company, had rested it’s hopes on "Universal Healthcare" as a way of shedding the that title, but circumstances overtook the company.
 
Written By: Neo
URL: http://
Oh, wait. We are finding that out now, a meltdown of epic proportions.


I could not agree more.

 
Written By: CaptinSarcastic
URL: http://
Lance - do you know if (a) these are Taft-Hartley plans and (b) if so, what the PBGC obligations are in that instance?
I am not sure, however I expect we will cover then on similar terms if necessary. Other benefits are another matter.
 
Written By: Lance
URL: http://riskandreturn.net

 
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