By on January 16, 2009

Even before President Obama becomes President Obama, the democrats have put a light on that Hill (go Jumbos!). In other words, the bailout bucks are flowing freely, with House Democrats unveiling an $825b stimulus bill. Here’s a challenge: define “stimulus” without using the words “pork” or “special interest.” And one of those special interest groups that’s especially interested in sticking their snouts in the federal trough: the U.S. auto industry. Surprised? “The money for advanced battery support includes $2 billion — half in loans and half in grants — and $200 million to encourage electric vehicle technologies,” The Detroit News, no stranger to industry encouragement, reports. “The bill also calls for $300 million to retrofit older diesel engines and replace some diesel vehicles, such as school buses, and use $400 million to help state and local governments buy more efficient alternative-fuel vehicles. Additionally, the measure includes $600 million for the federal government to replace older vehicles with alternative-fuel automobiles.” And get this: Motown’s hometown heroes are feeling shortchanged.

“The House bill will face changes when the U.S. Senate introduces its own bill, which is expected to shift more of the $2 billion in battery research money to grants not loans.” Yeah, why require them to pay it back? That’s… un American!

“Automakers should benefit from other provisions, including a $30 billion boost in highway construction spending and at least $31 billion to modernize federal and other public infrastructure projects, which should increase the sale of pickup trucks for work use.”

And let’s not forget the ethanol industry! “It increases to 50 percent from 30 percent an alternative refueling property tax credit, which could be used for installing rapid recharging units for electric vehicles and E85 pumps.”

Although GM CEO Rick Wagoner just pronounced the Chevy Volt a money loser, his PR spinmeister stayed on message.

“”It’s good to see the stimulus bill recognizes that to keep pace in the global technology race, the U.S. must make the capability to produce advance batteries a national, competitive priority,” Greg Martin said. “Greater advance battery funding can help jumpstart a green manufacturing sector and get advanced vehicles like the Chevy Volt on the road at greater numbers.”

The DetN reports that the House forgot to include some serious bailout billions. “Automakers had hoped to get a second $25 billion included in the stimulus bill for a federal loan program that was approved in September to retool older plants and equip new plants to build advanced vehicles or produce high-tech components, such as batteries and other parts.

“Automakers had also hoped that Congress would have added money to retire older vehicles, known as ‘Cash for Clunkers.’ Proponents wanted to give people up to $4,500 to scrap older, less-efficient vehicles in exchange for buying a new one.”

Oh, did you hear the one about the U.S. auto suppliers lining up for their shot at the federal bailout buffet? That’s one for another post. Meanwhile, how is this not socialism?

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26 Comments on “Bailout Watch 346: Feds Turn on the Taps, Bailout Bonanza Begins...”


  • avatar
    no_slushbox

    This is not at all Socialism; with Socialism the government gets ownership in return for funding. This is Kleptocracy. Which is much worse.

  • avatar
    guyincognito

    There will be no pork added to this unprecidented economic stimulus! (because its all baked into the bill from the get go)

  • avatar
    no_slushbox

    And E85 must die. The point of this stimulus to create jobs. Grain farmers do not employ anyone. It is completely mechanized. And one of the major tractor sellers is Indian.

    I might have to buy a plug in hybrid just so that I can boycott blended fuel.

  • avatar
    dubtee1480

    “Automakers had also hoped that Congress would have added money to retire older vehicles, known as ‘Cash for Clunkers.’ Proponents wanted to give people up to $4,500 to scrap older, less-efficient vehicles in exchange for buying a new one.”

    Good for Congress, that whole scheme stunk anyway… can you imagine the number of people who can’t afford new cars regardless that would have a harder time finding parts b/c of discontinued aftermarket support or scarcity in parts yards b/c the same older model they used as a daily had been crushed. The original language of the proposal had the credit going to the dealer in any case if I remember correctly to be “awarded” to the customer scraping their car, which would have been a whole possible new nest of problems as dealers wheeled and dealed with customer’s giving them portions of the credit.

  • avatar
    taxman100

    How can it be a stimulus bill, when it is full of incentives NOT to work, NOT to get a job, but rather stay on the dole as long as possilble. That is not only citizens, but businesses.

    The rest of the bill is pure pork barrel spending. This has to be about the worst spending bill ever legislated.

    If you think Bush was bad, the next 4 years will be much, much worse.

  • avatar
    ARacer

    Thanks no_slushbox. Finally, someone else who recognizes that most of the stuff labeled “socialism” by pundits, media types and my blindly partisan friends is socialism. Can we stop calling things we don’t like ‘socialist’ or ‘communist’ or any of the other ists?

  • avatar
    bluecon

    The Democrats dream come true. Tax and spend like even FDR only dreamed of.

    Reminds me of when FDR covered the pensions for all the workers in the dieing Railroad industry.

    History repeats.

  • avatar
    FromBrazil

    thank God!

    This is all America is consideirng! If it ever were to lift up trade barriers to help (???) local manufactures, let’s say, give ’em some breathing room, that’d be the death knoll to the rest of the world.

    Long live American magnficiency!

  • avatar
    bluecon

    ARacer
    Finally, someone else who recognizes that most of the stuff labeled “socialism” by pundits, media types and my blindly partisan friends is socialism.

    agreed

  • avatar
    menno

    This is National Socialism (as in Nazi) mixed with Socialism (aka Communism) mixed in with a little good old fashioned ‘meracun mafiosa style “fixes” and Chicago/DC/NY style “politics as usual” bled over to Detroit.

    (Yes, this can also be known as Kleptocracy. What the hell does anyone who’s ever studied history think Communism and Socialism and Fascism really were? How else were there ZIL limousines and so forth, in a “commune-ist” state? Because “some were MORE ‘equal’ than others” of course… you know, they wanted “change” in Russia from the Czars. And got it).

    See the original history of Volkswagen. To this day, the State of Saxony still owns part of VW.

    Needless to say, it is an unhealthy situation, especially for the wallets of the American public.

    Thing is, the auto side of this grand theft is but a minor player (thus far) in the big picture of bankster bailouts.

    But back to cars for a minute, didn’t central planning of an auto industry work out “just great” for Soviet Russia and East Germany, among others?

    After all, without that, we would not have Trabants, Wartburgs, rear engine Skodas, Ladas, FSO’s (“Polski Fiats” aka “Poxy Fiats” in the UK back in the day), and Yugos to laugh at.

    So I presume this means that by 2012 or so, we’ll be the laughing stock of the rest of the automotive world….

    Oh, wait. Never mind….. (too late)

  • avatar

    A little OT, but to anyone who still thinks bankruptcy is a good idea, Circuit City says hi.

  • avatar
    menno

    To see a somewhat larger picture of the future possibilities of where this whole thing leads, read this:

    http://www.independencejournal.com/today.htm

  • avatar
    psarhjinian

    This is National Socialism (as in Nazi) mixed with Socialism (aka Communism) mixed in with a little good old fashioned ‘meracun mafiosa style “fixes” and Chicago/DC/NY style “politics as usual” bled over to Detroit.

    In other words, as put so aptly at the top of this thread, a kleptocracy.

    I’m a socialist. This isn’t socialism. If someone where proposing a uniform sales tax, a more aggressive income tax that increases the load on the rich and/or buying GM or Chrysler outright and turning them into a crown corporation, I’d agree. I’d probably also be cheering.

    This is income redistribution from the poor to the rich. Any socialist I know (and I know lots of them) would be disgusted.

  • avatar
    Bancho

    psarhjinian :

    “This is income redistribution from the poor to the rich. Any socialist I know (and I know lots of them) would be disgusted.”

    Bingo!

  • avatar
    bluecon

    psarhjinian :

    “This is income redistribution from the poor to the rich. Any socialist I know (and I know lots of them) would be disgusted.”

    That is how socialism always works in reality.

    Like Winston Churchill says socialism is the equal sharing of misery.

    Then there are the socialists that believe in the destruction of capitalism and some nivirna of life that is never going to exist.

    Why the Soviet Socialists were such an abysmal failure.

    Read Animal Farm by Orwell to understand how socialism works.

  • avatar
    Qwerty

    Looks like good old Republicanism in action: Take from the poor and give to the rich while those who benefit from the largesse whine about socialism.

  • avatar
    bluecon

    That might make a better argument if the Dems were not controlling the Senate, the House and the Presidency. Or you could look at the FDR administration.

    This is FDR all over again and your are going to get the same result.

    Let the excuses begin!

  • avatar
    jschaef481

    From the Communist Manifesto

    “Conservative or Bourgeois Socialism:

    A part of the bourgeoisie is desirous of redressing social grievances in order to secure the continued existence of bourgeois society.

    To this section belong economists, philanthropists, humanitarians, improvers of the condition of the working class, organizers of charity, members of societies for the prevention of cruelty to animals, temperance fanatics, hole-and-corner reformers of every imaginable kind. This form of socialism has, moreover, been worked out into complete systems…

    …The socialistic bourgeois want all the advantages of modern social conditions without the struggles and dangers necessarily resulting therefrom. They desire the existing state of society, minus its revolutionary and disintegrating elements. They wish for a bourgeoisie without a proletariat…”

    There are many brands of Socialism. Bourgeois Socialism looks to be the most fitting description of our current government.

  • avatar
    bluecon

    All that socialism is, is the government confiscating the money from the people and spending it for them.

    What should be done is to follow the American Constitution which FDR and the governments since have had such disdane for. The economic meltdown we are currently experiencing is a direct result of to much government and to much spending. Now the Little 3 can’t pay their workers, how long do you think the government can prop this up with borrowed and printed money.

    The industry in the country is mostly shut down and the government is spending oodles of money. Who is paying for this?

    Read Ayn Rand’s “Atlas Shrugged” to find the answer.

  • avatar
    Qwerty

    Read Ayn Rand’s “Atlas Shrugged” to find the answer.

    The ravings of that fruitcake already created the Republican Depression. We don’t need to dig the hole any deeper.

  • avatar
    Qwerty

    What should be done is to follow the American Constitution

    Sorry. The Republicans already decided that the Constitution can be violated with impunity. That document is worth no more than a few squares of sandpaper grade toilet paper. The time to begin whinging about protections in the Constitution was before King Bush eliminated those protections.

  • avatar

    When the public complains about the feds throwing good money after bad, they need to give E85 a good smack-down. This is ridiculous. It’s already subsidized TOO MUCH, and they’re going to throw more money at it? Only the deliriously greenwashed see any benefit in this.

  • avatar
    bluecon

    Like I said, let the excuses begin.
    You are gonna need them after the Obama New Deal starts.

    Note that Reagan never made excuses he just fixed things and the economy was far worse in ’81 than it is now.

    The socialism and Keynesian policies never work, history has proven that.

    Guaranteed if the government carries through with these so called stimulous plans things will be worse in a year. Best that can be hoped for is a short term boost.

  • avatar
    psarhjinian

    Note that Reagan never made excuses he just fixed things and the economy was far worse in ‘81 than it is now.

    Snort. Yeah, sure. Ask George Herbert Walker Bush that question. Reaganomics’ fall-out is practically responsible for electing Clinton.

    The socialism and Keynesian policies never work, history has proven that.

    So the whole end of the depression can be ignored wholesale? Or post-war Japan and West Germany?

    Read Animal Farm by Orwell to understand how socialism works.

    Read Lord of the Flies to truly understand Capitalism. Pithy soundbites cut both ways.

  • avatar
    no_slushbox

    bluecon:

    Nothing in “Atlas Shrugged” gave Ayn Rand’s lover/associate/co-author Alan Greenspan the foresight to end artificially low interest rates soon enough to prevent any of the asset bubbles that have led to this current situation.

    There is a strong argument that relative socialism would allow the Federal Reserve to work more effectively because it would not have to worry about employment and growth (which it implicitly does) if there were more safety nets, and it could focus solely on inflation (which is the only thing it is supposed to be concerned with).

    National health insurance (i.e. Medicare for people under 65) would give small businesses a huge advantage; they would be able to attract competitive employees without paying health insurance costs much higher than large businesses pay.

    On the other hand, government should never own manufacturers (or bail them out); that has always lead to failure, as even Northern Europe has learned.

    Regan ran massive budget deficits throughout his presidency, he was the ultimate Keynesian.

    George Orwell was a socialist. “Animal Farm” is a critique of the extremes of communism.

    Both Marx and Rand were extremists that have had a very unfortunate amount of influence on world governments. Reality does not react to dogmatic ideology as well as imaginary worlds do.

  • avatar
    bluecon

    The difference between Reagans policies and what Obama is proposing is that Reagans worked. You will soon see the devastation of Obama’s Keynesian policies. The problem with the economy is that the government is to big, to make it bigger is just going to make things much worse.

    We already have a very socialist high tax high regulation economy and that is the problem. If the companies cannot afford a very expensive health care system what makes you think the government can?

    Ayn Rand the Founding Fathers and the Constitution are in agreement that freedom in economics and life is the proper path. That is the proven system that works.

    Confiscating the money from the winners and handing it to the losers will not work.

    I have a few bucks and I am going to invest it where it will do me the most good for me. That is the proper way, and if the socialism in our society makes it unprofitable to invest in a business that would be for the greater good that is not my fault.

    The Depression ended with WW2. The US came out of the Depression by supplying arms to England and then bombed the competition to rubble. After WW2 the US controlled a huge amount of the economy since the competition was destroyed. West Germany and Japan quickly recovered through extreme hard work and capitalism. Socialist East Germany the rest of Eastern Europe and Russia have still not recovered to this day.

    Look up the “Economic Miracle” if you want the true story of the West German recovery. It wasn’t mostly due to the Marshall Plan as is commonly believed in the USA.

    If you look at the history of socialism in the 20th century it is a succession of failures.

    Snort snort double snort
    Clinton was elected due to Bush 1 making a deal with the Dems to raise the taxes which they promptly used against him in the election. Kinda like Bush 2 making this deal with the Dems to waste trillions of taxpayer dollars on ‘stimulous’. And then Ross Perrot taking a large chunk of the vote away from Bush 1. It had nothing to do with Reagan’s policies.

    The Bush’s seem to have a hard time learning you cannot trust the Dem’s.

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