Say it ain’t so… please ,someone. Bloomberg is reporting.
President-elect Barack Obama is pushing Congress this year to approve as much as $50 billion to save cash-starved U.S. automakers and appoint a czar or board to oversee the companies, a move that would require President George W. Bush’s support, people familiar with the matter said. Obama’s economic advisers are now convinced that if General Motors Corp. doesn’t get a financial lifeline soon, it will have to file for bankruptcy by the end of January. And if the companies don’t get almost $50 billion, Obama will be dealing with the issue again by next summer. Any czar or board would be patterned after the bailout of Chrysler in 1979 and New York City in 1975. Advisers such as former Federal Reserve Chairman Paul Volcker and former Treasury Secretary Lawrence Summers are said to be telling Obama that the cash is urgently needed now.
Congress would have to act in a lame-duck session that begins next week. Obama would need Bush’s backing to pass such a sweeping and costly measure in part because Democrats don’t have enough votes to force a floor vote or override a veto. Obama also would need strong support from auto-producing states such as Michigan, Ohio, Indiana, Illinois and Wisconsin to pass such a sweeping and costly measure. Yet to be determined is whether most of the money would be drawn from the $700 billion financial rescue package Congress passed last month or from newly allocated funds.
By injecting himself into the talks about how to save General Motors, Obama is making an exception to his decision to steer clear of policy-making until he takes office. The president-elect also wants the Federal Reserve to extend emergency loans to General Motors, Ford Motor Co. and Chrysler LLC, according to Obama aides who spoke on condition of anonymity. The failure of those companies would likely bring down parts-makers, dealerships and suppliers in addition to inflicting a deep psychological blow.
Is this really true? A multi-billion dollar bailout for the Big Three whose management has systematically squandered away a huge post-war economic and technological advantage, have misunderstood their markets, who have blamed workers every chance they get, and who failed to learn from their rivals and refuse to harness the creative capabilities of workers. An auto czar – huh? I thought Obama was elected by a combination of African-Americans and the creative class. How does this square with his electoral coalition or his vision of a better future? This will just forestall the inevitable. Why not just allow them to be taken over by Japanese car companies like Toyota and Honda who could truly restructure them? For the life of me and the good of the country, I hope this report is wrong.