Bailout Watch 346: Feds Turn on the Taps, Bailout Bonanza Begins

Robert Farago
by Robert Farago
bailout watch 346 feds turn on the taps bailout bonanza begins

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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  • No_slushbox No_slushbox on Jan 16, 2009
    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.

  • on Jan 16, 2009

    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.

  • Scott ?Wonder what Toyota will be using when they enter the market?
  • Fred The bigger issue is what happens to the other systems as demand dwindles? Will thet convert or will they just just shut down?
  • Roger hopkins Why do they all have to be 4 door??? Why not a "cab & a half" and a bit longer box. This is just another station wagon of the 21st century. Maybe they should put fake woodgrain on the side lol...
  • Greg Add me to the list: 2017 Sorento EX AWD w/2.0 Turbo GDI 68K miles. Changed oil religiously with only synthetic. Checked oil level before a rare long road trip and Ievel was at least 2 quarts down. That was less than 6 months after the last oil change. I'm now adding a quart of oil every 1000 miles and checking every 500 miles because I read reports that the oil usage gets worse. Too bad, really like the 2023 Tuscon. But I have not seen Hyundai/Kia doing anything new in terms of engine development. Therefore, I have to suspect that I will ony become a victim of a fatally flawed engine development program if I were to a purchase another Kia/Hyundai.
  • Craiger 1970s Battlestar Galactica Cylon face.