John McCain: No Federal Loan Guarantees for Detroit

Robert Farago
by Robert Farago
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john mccain no federal loan guarantees for detroit

The Detroit News reports that presidential candidate John McCain "declined to support any of several proposals to provide loan guarantees to the domestic carmakers." (Whatever happened to Just Say No?) During a campaign swing through Michigan, McCain dismissed calls to help Detroit make the cars they should have been making in the first place, or should be able to make now on their own damn dime given all the profits they banked during the SUV and pickup boom, or something like that. Anyway, McCain's rationale: supporting bail-outs would unleash karma that would jinx Detroit's automakers. No, really. "Asked if he backed such proposals, McCain suggested that such support might create a sense of doom around the companies. 'I have heard many of these proposals, but I have also had meetings with the Big 3 automakers, and they are confident that with the new hybrids and flex-fuels and other technology advances … they can succeed. So in all due respect, I worry a little bit about us predicting failure on the part of the automakers when they're struggling mightily.'" "Barack Obama supports loans and tax credits to retool the nation's auto plants and build the next generation of American cars," Brent Colburn, Obama's economic adviser, advised soon thereafter.

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  • Shaker Shaker on Aug 14, 2008

    I'll admit a fair amount of ignorance regarding the Bear-Stearns "bailout", as I don't read any financial papers or journals (cantcha tell); but it really comes down to the perception of the "Average Joe" who gets his news beamed into his eyeballs while munching on a microwave pizza pocket -- it's the "perception thing". GM execs screw up, Blue Collar takes a hit. Big banks screw up, Uncle Sam to the rescue! I know that the turmoil caused by letting banks fail would crash the economy faster than Capt. Hazelwood would an oil tanker, but it just appears to be slanted towards the filthy rich, no matter how much they screw up.

  • JJ JJ on Aug 14, 2008

    Apart from the fact that I'm against bail-outs... As some above have pointed out it is easy to say for McCain no bail-outs for Detroit. He's going to loose Michigan anyway if I'm not mistaken and it might only gain him a couple of votes from voters in other states thinking 'I don't want my tax money to go to some incompetent exec's 100+ Ft yacht', or just 'why should they get money and not me'. In the last case they may actually have a good argument. Either way, for McCain saying no to bail-outs is just good politics that happens to be the right thing to do. On another note, as a European I can't believe McCain might actually have a shot at winning the elections, 20 years ago not so much. I know the US media says the rest of the world supports Obama (and I think that's accurate) but it's as much about having none whatsoever connection with McCain as it is about enthousiasm for Obama.

  • Philipwitak Philipwitak on Aug 14, 2008

    re: "...I can't believe McCain might actually have a shot at winning the elections...I know the US media says the rest of the world supports Obama..." JJ / August 14th, 2008 at 2:55 pm the mainstream media pump up mccain because: [1] they need a 'competitive' race to cover and [2] 'compelling' content/programming to sell advertising around, plus [3] media's corporate ownership prefers to have politicians in their pocket, especially considering that they are regulated by and regularly have 'business' before the government. in the united states, no group of politicians has been more favorable to big business and it's slash-and-burn, profit-at-any-cost agenda than the republicans. and to make matters worse, recently, even many democrats have finally figured out where the money is and have joined the gop in some sort of pathetic 'good cop/bad cop' routine that benefits no one but themselves, each other and others at the very highest echelons of society. the con is on. the fix is in. and the 'marks' are us.

  • Carlos.negros Carlos.negros on Aug 14, 2008

    Kendahl : "It is incorrect to say that the Federal Reserve “bailed out” Bear Stearns." Whatever you want to call it, it cost the taxpayers $32 billion. The best thing a government can do during a recession is to spend money to stimulate the economy. That has worked in the past in the U.S. and in Europe. When countries have cut back, the recession gets worse, the currency collapses, and foreign interests come in and buy assets. Loan guarantees should not be provided without strings. One string would be a limit on executive pay during the period of the intervention. Another could help to produce particular vehicles, such as plug-in vehicles. One way the government could help would be to provide incentives to provide charging stations at interstate rest stops, for example. I have not read Obama's plan in detail, but I think it is short-sighted of McCain to dismiss any kind of incentives to the domestic auto industry. If he wants to do something different from Bush, why not just promise no more no bid contracts to cronies? Payments on no bid contracts in Iraq have reached $100 billion.