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Fed Aid to Detroit Seems Likely


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  • Fed Aid to Detroit Seems Likely

    Folks, what we're witnessing are major corporations, bailed out with our tax dollars, and brought under the direct control of government. Where is the 'Free Market Enterprise'??? Bear Stearns, Lehman Bros., AIG, have gone under, and now there's talk of the major auto manufacturers. If it quacks, and waddles when it walks, it must be a duck: this is called socialism. Why don't we begin calling our country 'The Union of Socialist States of America', and get it over with?

    Just look who is bringing the U.S. socialism: George W. Bush, Mr. Texas conservative, Henry Paulson, former CEO of the ultimate bastion of capitalism, Goldman Sachs, and Ben Bernanke, Mr. Conservative academic economist, former Bush economic advisor.

    Are you upside down in your mortgage? Can't sell? Decide to walk? US Governement assumes your unpaid balance and takes the house ... sells house at loss ... that loss is now considered your additional income.

    At present no such thing as forgivness with IRS.

    The truth is that free market, deregulated capitalism, is the cause of the financial disaster. Just like in the 1920s when conservative republicans get their hands on government and deregulate everything, and favor the rich, and their corporations, you get big excesses and big bubbles. And then everything comes crashing down. The irony is, even conservatives are forced to resort to socialist solutions to save the day.

    I am more concerned about the return of my money than the return on my money. --Mark Twain


    Federal Aid to Detroit Seems Likely

    Published: September 17, 2008

    WASHINGTON — After a series of government interventions in the private markets, one seemingly more astonishing than the next, lawmakers found themselves confronted on Wednesday with the question of when and where to draw the line on future aid.

    But with billions of dollars in financial backing already authorized for Wall Street, and with Election Day fast approaching, Congressional leaders seemed uninterested in denying help to large employers of blue-collar Americans.

    Even as lawmakers in both parties unleashed a barrage of questions about the wisdom of a government rescue for the American International Group, support seemed to be growing quickly on Capitol Hill for $25 billion in loan guarantees to assist the ailing auto industry.

    Both presidential candidates, Senator John McCain of Arizona and Senator Barack Obama of Illinois, have voiced support for the loan guarantees — an unsurprising stance given the critical importance of the main auto-producing states, Michigan and Ohio, to the electoral map this fall.

    The chief executives of the three big American automakers — General Motors, Ford and Chrysler — met on Wednesday afternoon with House Speaker Nancy Pelosi.

    When they emerged, they expressed optimism that the loan guarantees would be included as part of a budget resolution that is needed to finance government operations through the end of the year.

    “The support that we got was again very encouraging,” said Robert L. Nardelli, the chairman of Chrysler. “The conversations I have had all day on the Hill have been very encouraging, very candid, very straightforward and so as we conclude the day, I would say it was successful.”

    Alan R. Mulally, the chief executive of Ford, was even more upbeat. “It was a great day,” he said. When a reporter asked what Mr. Mulally might say to people who viewed the loan guarantees as a bailout, he replied in a chipper voice, “I would characterize it as an enabler.”

    Ms. Pelosi sharply criticized the Bush administration on Wednesday over the $85 billion bailout of A.I.G., saying it was evidence of mismanagement by President Bush. But she expressed strong support for the automakers’ loan guarantees, which would be used to help the companies meet new fuel efficiency standards that Congress adopted last year.

    “We see that as a way to rebuild and strengthen the technological base of America,” Ms. Pelosi said at a news conference in the Capitol. “It would certainly help people in the auto industry, but it’s not only about the auto industry, it’s about the auto industry, it’s about our economy, it’s about America’s work force.”

    She added: “We consider this a major investment in innovation.”

    Republican Congressional leaders, too, said they were in favor of helping the automakers. Representative Adam Putnam of Florida, the third-ranking House Republican, said at a news conference that it was up to auto executives to convince lawmakers of the need for government assistance.

    “It’s incumbent on them to make the case to Congress that it is a loan guarantee, that it is a wise investment of taxpayer dollars, and I think that they are on the Hill this week making that case,” Mr. Putnam said. “The reports that I have heard from my colleagues is that they have been fairly persuasive.”

    The Senate majority leader, Harry Reid of Nevada, expressed his own support for aid to the automakers at a news conference on Wednesday morning. Mr. Reid said the loan guarantees, which would cost taxpayers $7.5 billion, were needed.

    “I think it’s extremely important that we try to do something,” he said. “These are jobs. These are cars that we should be selling — or manufacturing in America, not someplace else.”

    Still, some fiscal conservatives reacted angrily to the prospect of more taxpayer money being used to prop up private companies.

    “The federal government’s propensity to bail out failing companies in struggling industries ought to be troubling to all taxpayers,” said Representative Jeff Flake, Republican of Arizona. “Aside from the fiscal impact of spending money that the federal government doesn’t have, these bailouts will likely have the opposite of their intended effect.”

    Mr. Flake added: “Federal bailouts may stave off short-term economic damage, but the long-term economic outlook will be much worse if the market is not allowed to make its own adjustments. While the Bush administration certainly shares blame for these bailouts, this Congress may designate itself as the ‘Bailout Congress’ if we follow through on a rumored bailout of the auto industry.”

    But such skepticism was likely to be overshadowed by the huge stakes in the presidential race. Mr. McCain, the Republican nominee, had seemed cool to the idea of loans for the auto industry last month, but at a campaign stop on Wednesday at an auto plant in Orion, Mich., he sounded like a staunch supporter.

    “It’s great to be here today with the assembly workers of this G.M. plant,” he said. “I’m here to send a message to Washington and Wall Street: We are not going to leave the workers here in Michigan hung out to dry while we give billions in taxpayer dollars to Wall Street. It is time to get our auto industry back on its feet. It’s time for a new generation of cars and for loans to build the facilities that will make them.”

    Bill Vlasic contributed reporting from Detroit and Michael Cooper from Orion, Mich.

    Last edited by Stormy; 09-19-2008, 09:32 AM.

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