Taxpayer Bailout to Bail Out Automakers' Bad Loans
You can’t kill the $700b federal bailout bill– sorry, “rescue package” with a stick. And now that it’s ballooned from two pages to over 400, the auto industry lobbyists have wet their beak. Automotive News [sub] reports that “House Financial Services Committee Chairman Barney Frank, D-Mass., confirmed this week that under the plan, the Treasury Department would have authority to buy securities backed by automotive loans. Automotive loans are not as troubled as mortgages, but in the current climate investors are unwilling to buy the securities, effectively cutting off the flow of credit, industry lobbyists say.” In other words, Uncle Sam is going to assume responsibility for billion of bucks in bad paper written by domestic automakers and their agents to move the metal, so that the feds can “free up” the credit market and enable automakers to write more bad loans to boost their bottom line. There ought to be a law. Or, in this case, not.