Bailout Watch 440: "Never Mind The Bankruptcy"

Edward Niedermeyer
by Edward Niedermeyer
bailout watch 440 never mind the bankruptcy

The Freep reports that Obama’s Car Czarlet, Steve Rattner, is steering his Presidential Task Force On Autos away from earlier considerations of bankruptcy for GM. “Bankruptcy is not our goal,” Rattner tells the Freep after a week of Kool-Aid sampling in Detroit. “I’ve been in and around bankruptcy for 26 years as part of my private-sector work. It is never a good outcome for any company, and it’s never a first choice.” And by turning away from bankruptcy restructuring, the PTFOA has eliminated the only real possibility for comprehensive, radical changes to Detroit’s business model. The result? Don’t expect a single major turnaround effort to tackle Detroit’s unsustainable posture.

Instead, “it’s entirely possible, in fact I think it’s more than likely, that what you will see is not a single announcement at a point in time that’s the beginning of the end of our policy efforts for the auto industry, but rather a series of actions over perhaps a reasonably long period of time to solve this problem,” says Rattner. And why not? Every good parasite knows that a slow bleed keeps the host alive longer than massive feeding binges do. As the man detailed to keep Detroit rumbling along at a minimum cost to the President’s political capital, Rattner knows that massive federal cash infusions create controversy without ensuring long-term viability. Hang on for a long slog, folks.

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4 of 12 comments
  • No_slushbox No_slushbox on Mar 16, 2009
    Lokki: The auto bailout loans failed in Congress, so there were definitely not enough votes to override a veto. Bush came up with TARP and supported the auto bailouts (technically the auto bailouts are part of TARP, since Bush used money that, by law, was only supposed to be used for financial company bailouts to fund the auto bailouts) for the same reason as Obama is continuing both programs, political fear. In the end it may have cost McCain the election.

  • Tesla deathwatcher Tesla deathwatcher on Mar 16, 2009

    How disappointing. We need someone with insight and wisdom. And we get Steve Rattner.

  • Robert Schwartz Robert Schwartz on Mar 16, 2009

    Rattner is Pinch Sulzberger's tennis partner. The GM/Chrysler bailout is a UAW payoff. And Bush was jsut playing kick the can down the road. In a month its your problem.

  • SexCpotatoes SexCpotatoes on Mar 17, 2009

    no_slushbox: You may want to check your timeline... didn't Obama get elected in (very early) November of 2008... then Bush decided to use the TARP funds to "help" the automakers in Dec? Unless you mean he lost the next election for John McCain as well...