By Robert Farago
September 24, 2008
Automotive News [AN, sub] reports that the U.S. House of Representatives have passed a bill which includes authorization for $25b in federal low-interest loans for Detroit. The legislation, originally designed to help Detroit automakers retool 20-year-old-plus factories to build automobiles that are 25 percent more fuel efficient than similar models, cleared the Reps by a margin of 370 to 58. The Senate will rubber stamp the bill– whose main purpose is to keep government running in the new fiscal year that begins Octover first– by the weekend. President Bush is expected to sign it next week. And before that’s done, Detroit’s minions will do everything in their power to get their hands on the cash and subvert Congress’ original intent for the bailout billions. As AN puts it, “The final version of the bill is expected to include language that would speed the issuance of the loans and the adoption of rules by the Department of Energy that would govern their use, said John Bozzella, Chrysler LLC’s vice president of global external affairs and public policy.” Meanwhile Rep. John Dingell, chairman of the House Energy and Commerce Committee, was over the friggin’ moon. “Some critics will call this loan package a bailout,” the Michigan democrats statement admitted. “It is not. These loans amount to a little more than 1 percent of the real bailout — the one that the Bush administration wants for Wall Street at a cost of $700 billion to taxpayers.” So it’s not a bailout that’s less than the other bailout. Makes sense to me.
Subscribe to New Content Alerts16 Comments on “ Bailout Watch 67: House of Reps Votes Aye ”
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POWERED
September 24th, 2008 at 7:48 pm
Obviously, there is a minimum threshold at which a bailout is not a bailout.
September 24th, 2008 at 8:10 pm
* Deep sigh * so, 25 is now less than 1% of 700?
The 25 billion is now gone - the “string attached” are obviously fake. The 700 billion will be exchanged into securities that may depreciate or appreciate in value. Detroit is getting a LOT!
September 24th, 2008 at 8:23 pm
Robbie> Perhaps Dingell sees the writing on the wall that total bailouts will exceed 2.5T ?
Scary thought.
September 24th, 2008 at 8:27 pm
Serious question:
Would this bailout have happened without the Volt? IMO, the Volt will never see the road, but it provided cover for this giveaway. Without it, the ‘retool’ ploy would have begged the question “like what?”. Given that GM’s only hybrid plays are a failed joke, I don’t see how they could have used that target.
So it seems to me that Rick and Bob have pulled off one hell of a con, and in my book at least, deserve mega bonuses for as many years as the first $25B and follow-ons last.
September 24th, 2008 at 8:48 pm
Christ, did I ever choose the wrong career path in life. Why can’t I be playing with sums of money like this.
September 24th, 2008 at 8:51 pm
How much has GM lost over the last year?
Chump Change!!!!!!!!
September 24th, 2008 at 8:52 pm
Does anyone know the bill number? I’d like to find out how he voted and contact my rep. Also, I’d like to give my Senator a head’s up that this is b-a-d.
September 24th, 2008 at 9:39 pm
A long time ago a wise man told me that the best way to get rich in America was to find a way to transfer your liabilities to the government. I’m finally appreciating how wise he was.
September 24th, 2008 at 10:42 pm
Mel23 - I fear that you are right and the Volt and Chrysler EV/Hybrids will indeed evaporate before they ever reach the market for one reason or another.
September 24th, 2008 at 11:52 pm
I don’t feel well. This is not a good direction for us.
edit: i believe in a capitalist economy, but when you subsidize or bail out your losers with your winners that’s not capitalism. Survival of the fittest works if you let it. When you funnel money from the winning industries through the government who will take a cut it’s a bigger loss. When you help out the losers they have less motivation to become winners. What irks me most is that the CEO’s and government know all this, and are playing a different game.
September 25th, 2008 at 12:06 am
So, do they all get the same amount? It seems $8.3 billion might actually make a difference for Chrysler while its only a few months worth of money for GM.
September 25th, 2008 at 11:12 am
Welcome to the USSA. Where the taxpayers and the proles get to pay again and again for the lifestyles and perks of the ruling class. Socialism for the rich and corporations and taxes for us poor working slobs. Ah the america way. And didn’t they tell us that we won the cold war when the Berlin wall fell. Well what really happened was that the USSR pushed the wall down and let out Marx. Who is now alive and well and has residences in NY and Washington. Keep the jackboot on my throat.
September 25th, 2008 at 11:56 am
USAFMech :
September 24th, 2008 at 8:52 pm
Does anyone know the bill number? I’d like to find out how he voted and contact my rep. Also, I’d like to give my Senator a head’s up that this is b-a-d.
The problem is is that it seems to be attached to a unrelated must-pass omnibus spending bill. That is, Congressmen who vote for this, for the most part, aren’t actually voting for this specifically-they are voting to keep the lights on and prevent a government shutdown.
September 25th, 2008 at 12:11 pm
If we had anything but a spend-and-spend president, then he’d use the set of raisins he was born with and scratch off the $25B with his line-item veto powers.
September 25th, 2008 at 1:57 pm
USAFMech:
http://clerk.house.gov/evs/2008/roll632.xml
September 25th, 2008 at 5:53 pm
netrun :
September 25th, 2008 at 12:11 pm
If we had anything but a spend-and-spend president, then he’d use the set of raisins he was born with and scratch off the $25B with his line-item veto powers.
The president does not have the ability to line-item veto things. There was an attempt to give it to him, but it was found to be unconstitutional by the Supreme Court. He has the choice to sign the whole thing or veto the whole thing, that’s it.