Alabama Senator Richard Shelby is threatening a filibuster of any bill to bail out the auto industry that makes it to the Senate:
With job losses mounting and Detroit’s Big Three automakers facing a battle on Capitol Hill over emergency federal aid, President-elect Barack Obama on Sunday predicted more hard times for the U.S. economy before it starts to turn around, and Sen. Richard Shelby (R-Ala.) threatened a potential filibuster of any attempt to bail out the automakers.
”This is a big problem. It’s gonna get worse,” Obama warned on NBC’s “Meet the Press.”
(…)
Shelby, who also voted against the $700 bailout bill for the financial industry, called it a “bridge loan to nowhere,” and said General Motors, Ford and Chrysler have to undergo a fundamental restructuring of their operations rather than look for federal help.
He also predicted auto industry executives would soon come back to Washington looking for more money, beyond any assistance they are given now.
“This is a down payment on many billions to come,” Shelby warned. “This is not something that happened overnight. This is 30 years in the making. These companies basically have failed or are failing. They probably need, according to some people, about 60 percent of the management to go, and about 40 percent downsize of the workers.”
Shelby also threatened a filibuster of any auto aid agreement, but was unsure whether he had the votes to sustain it.
And, at first glance, it looks like there are some Republicans who won’t be going along with Shelby:
Sen. Jeff Sessions (R-Ala.), appearing on CBS’ “Face the Nation,” signaled that he may back a short-term loan to the auto companies.
“I think it’s a lot better then they were talking about earlier when the automakers were talking about $34 billion,” Sessions told CBS’ Bob Schieffer. “So I think the chances of passage are better.”
Sessions, however, added, “I truly believe these companies would be better off under Chapter 11 of the bankruptcy code as so many corporations have done.”
Then why not let them go into Chapter 11 ?
It’s gonna be a rough week, I fear
H/T: Crystal Clear Conservative
December 8th, 2008 at 8:30 am
The US government gave hundreds of billions to save a few of Paulson’s Wall St buddies and their jobs and million dollar bonuses.
But, the US can’t seem to find the money to save the jobs of hundreds of thousands of American workers.
The GOP is ensuring it’s own demise by opposing a plan to save the American auto industry. Their newly found backbones will cause a tidal wave of job losses throughout the entire country, if they allow the American auto industry to fail. Not only Detroit, but also hometowns in Tennessee and Alabama will suffer from the collapse of GM, Ford and Chrysler.
December 9th, 2008 at 2:28 am
Bankruptcy is the right answer, not bailout. Failed auto manufacturers will either re-emerge stronger from bankruptcy and reorganization, or the foreign auto makers will take advantage of the vacuum they leave behind. UAW and bad management have ruined domestic manufacturing to an extent which cannot be healed without major restructuring.
Any person who has participated in running a successful business knows that the business must make the decisions necessary to turn a profit in order to survive. Our government and its central bank, the Federal Reserve, cannot continue to prop up failing institutions at the current rate. The Federal Reserve would be shut down by its own bank inspectors if they applied the same rules to themselves that they apply to other banks. FDIC supposedly guarantees bank deposits to a new larger-than-ever extent, and has guarantees for other investments as well now, despite the fact that the FDIC Trust has dwindled to a fraction of its former amount, which was itself vastly insufficient to the crisis currently facing it. This is why Citibank HAD to be bailed out…to maintain this delicate fiction which has been sold to the public that our government can protect people’s savings no matter the depth of the financial morass.
People who have overextended themselves will lose the collateral which guaranteed their borrowing (house and car). Irresponsible lenders will lose money in write-downs on debts they cannot collect. Everyone will learn valuable lessons about saving, borrowing, and lending. Bailouts will, at best, only delay all of the necessary corrections or, at worst, further destabilize our economy and government (hyperinflation, devaluation of currency, ruination of US government long-term credit rating, etc).