The Democrats might have been rescued from themselves last night, when the Republicans refused to extend a bridge loan to General Motors and Chrysler. The Corker compromise bill, which is the only bill that was likely to pass, was a bruising insult to the labor unions. It was better than letting the auto industry go bankrupt, but a lot worse than any bill Congress might produce in three week’s time. It was also a lot worse than anything Treasury Secretary Hank Paulson might do now to rescue General Motors.
But this is a game of chicken. If Paulson does nothing, General Motors is finished, and probably Chrysler, as well. If the GOP is really out to smash the auto unions, they can do so by forcing bankruptcy. No union contract will survive Chapter 11 proceedings. Ironically, it may be Bush and Cheney who are the voices of reason within the Republican Party:
On Wednesday, Dick Cheney met with Senate Republicans and emphasized the importance of keeping the American automotive industry afloat. “If we don’t do this, we will be known as the party of Herbert Hoover forever,” the vice president said.
The Neo-Hooverite caucus apparently seems willing to wear the label with pride.
When you’ve let your anti-union ideology move you far to the right of Dick Cheney, you know you’re out on a limb. It appears the Senate Republicans decided to play their own game of chicken with the Bush administration. They said, essentially, ‘if you don’t want to go down in history as the modern-day Hoover administration, bail Detroit out on your own’. And now it is up the Bush administration to do just that.
Remarkably, the Democrats made some obscene concessions, but they hung in there, didn’t fold, and eventually called the Senate GOP’s bluff. Bush knows what the collapse of GM on his watch will mean for his legacy. And it might just lead him to do the right thing for once. We shall see.
I wonder where the oil companies are in all this. It is true that their gasoline will work in any make of car, but it is also true that in the event of a Big 3 collapse the demand for gasoline and related products will drop. A general economic collapse benefits no one.
It’s my understanding that the big 3 have continued to buy and stock inventory from suppliers but their AP indicate they have strung out payment to those suppliers, thus turning the suppliers into their bank of choice while keeping their AR inhouse.
Those suppliers will certainly be in dire straits shortly and I would hope Treasury makes allowance for paying them off first or the domino effect will spread quicker than imaginable. It’s not the octupus that is dangerous but his tentacles.
It sounds like Treasury will find money from the bank bailout slush to make a short term loan to the carcos. The political role reversal is nothing short of stunning: the Dems line up almost unanimously to rescue the poster children for the most incompetent, hapless, elitist kind of capitalist arrogance while the Republicans split between compromisers and anti-elitist-preaching defenders of tooth and claw capitalism at its deadliest.
For someone with the patience it would be interesting to try and define the inter-party rhetorical shift, and, even more, the schism within the GOP right between the corporatist Bush/Cheney and the almost anarchist congressional majority that wants to let it all burn before it will allow temporary government loan.
Politically I think you’re right: The Senate Reps have handed the Dems the best of all possible worlds. Bush will have to come through with inadequate loans that barely pull the carcos away from the brink, then the Dems come in in January with a new plan that rolls the loans into a larger push for green energy, labor advocacy, and restoration of government’s duty to regulate business. And maybe health care, too.
I don’t think it’s totally anti-union Ideology. I think Senate Republicans (and House too!) have largely bought into the idea that Roosevelt’s programs prolonged the Great Depression and if only they’d stuck with free market it would have been over more quickly.
Well, DeMint was on the radio and made it pretty clear that he sees this as an opportunity to bust the unions and blame them for the consequences. I’d be shocked if that didn’t become the wingnut noise machine’s new theme song.
It sucks that the right has its own media reality machine. It makes them much less sensitive to the consequences of their actions. After all, who cares about what happens in the real world, when 50% of the country will only hear about a fake one?
You are always the optimist, Boo.
hilariously and predictably, Corker’s phone has been off the hook all day.
they don’t want to hear from anyone. something tells me they’re in a world of shit.
Bankruptcy will allow for a more orderly renegotiation of union contracts. I am not convinced that the produce of a car company who is barely on life-support is really that less attractive than one that is in an orderly bankruptcy. Why renegotiate under the carcos’ coercive time pressures and in the back rooms of congress?
The idea that one or two of the companies failing being the end of the story is simplistic. Ford wants access to loans in case the others fail TO BUY THEM or their assets. I say loan any company money you want, but it as a requirement, the company must go bankrupt within 6 months, with the gov’t being the first payee. Either you are going bankrupt or not, and if you are, then a minimal ‘help’ should be available.
Seems that we the people are last in the bailout line.. let’s save some for us.
Yep. Bankruptcy might not be so bad. This can’t go on forever and bankruptcy might be the best way to unwind this unsustainable industry. I’m not so sure the bankruptcy court will be so hostile to the current union contract as some believe but I don’t have expertise there.
And politically–let this demonstrate once and for all that the Republicans will have spent trillions to bail out bankers but won’t lift one of their fingers to help the working man.
Like usual. Republicans care about the rich and will kick working families in the teeth. Cause that’s what Republicans do.
Not only have the Republicans killed the American economy they have demonstrated that they care only about the rich bankers, not average Americans.
Democrats need to deliver the death blow. Obama needs to lay the blame for the death of American manufacturing at the feet of Republicans (I know this isn’t fair but hey, Dems and liberals need to learn to play politics).
I just don’t see how our economy is imploding because of Republican supply side corporatist policies but the Democrats can’t take full advantage of this. I guess the answer is obvious; they share many of the Republicans economic beliefs and corporate backing so they can only go so far. It’s a shame really. Because it’s holding Demcrats back from really changing the political landscape for generations.
The Hooveristas in the Senate care more about Japanese Companies building cars in America. The Hooverista Republicans are just trying to blame the UAW when labor is only 800 dollars per car. If the big 3 fail, the Chinese won’t have to worry about imported auto parts from America.
http://international-tariffs.suite101.com/article.cfm/chinas_unfair_auto_parts_tariffs
I think there is something inherently UnAmerican, UnPatriotic about those Republican Senator wanting to see America fail. In light of the fact those same Republicans are responsible for this financial fiasco in the first place..by not doing their job and having oversight hearing.
So how many Repubs will get elected in the Midwest next cycle? And if the rest of the country feels this depression like it looks like they will, expect Repub thuggery not to be a hot item even in the Deep South either.
I only wish Reid would have forced the Repubs to get up and talk for a couple of weeks about how bad it is to rescue the auto companies. If Reid is such a wimp it should be easy for someone to get the gavel out of his hand. Barbara Boxer, our next Senate majority leader.
I agree if they want to filibuster, make them talk and allow those Senators who are against the auto bailout do so for weeks. If they can’t talk their way through don’t they lose?