Republicans May Have Lost On Auto Bailout

The White House is moving forward with a rescue plan for the automakers. Congressional Republicans are not happy about it. What was first declared a tactical victory for the GOP leadership by the likes of MSNBC's First Read, is now looking like a loss. Because Senate Republicans failed to reach a deal with Democrats and their union allies, it now looks like they will get none of the conditions they were pushing for. In a post from the New Republic, Jonathan Chait notes that the White House is poised to bailout the automakers anyway, suggesting that the "GOP maneuver will have been a total disaster" for the party. If the White House uses the TARP funds its doubtful that the carmakers will be required to accept all of the restructuring conditions the Republicans were pushing for Thursday. This is because if the White House does use TARP funds the Republicans will have lost most of their leverage. Right now they have 49 Senate, in January they will have at most 42 seats, maybe only 41, their ability to block a closure vote. When that happens the Democrats will cut a much better deal for themselves, for the union, and for the auto companies. There will be more protections for the workers and there will be tougher environmental standards. Thus Mitch McConnell who was pretty much being hailed as a genius as a leader of the opposition, will have won nothing.

Republicans had a chance to make this bill as appealing as possible, but they didn't want want to concede anything. They didn't want to concede anything on environmental standards. They didn't want to concede anything on worker rights. They wouldn't negotiate in good faith.

More on the Bailout

If you have been reading this blog, you know I have supported the idea of this bailout. Even though the management of the three companies has been bad, and I would have demanded change at the top, I would have supported this bailout. I also know that I would not have supported a bailout if these were normal times, but that's the thing these are not normal times. The dirty fact is that the three companies would not be in this much trouble if not for the financial crisis on Wall Street, and the credit crisis. This is why when that idiot Mitch McConnell comes on the air and says that the U.S. auto industry have only themselves to blame, her is either lying or an idiot. Actually they are not mutually exclusive.

Under the circumstances of today it is an extraordinarily irresponsible thing to do. The Senate Republicans were not, let me make this clear, WERE NOT trying to do things responsibly. They did not ever seem to consider extending the kind of financing that would allow GM and Chrysler to go through Chapter 11 bankruptcy rather than liquidation. That financing would have involved loans, not gifts. It would have allowed an orderly reorganization that they kept claiming they wanted. Instead Republicans are willing to let a million jobs to go down because they wanted to break the UAW.

We are in a recession. We already have millions losing their jobs. We already have an economy on the brink. We have a party of idiots in congress, what is worse the other party is one of weaklings.

In the middle of the worst downturn in half a century the idiots who make up the leadership of the Republican party decide to prove that they care about fiscal responsibility. This after years of being willing to spend money on whatever George W. Bush wanted. This after years of being willing to spend money on whatever lobbyists have written into laws for them. This after years of being willing to spend money like there was no tomorrow, putting this nation so far in debt we may never see it paid off.

The consequences to our economy sound delightful:

"With Congress failing to agree on a bailout for Detroit, the odds that General Motors and Chrysler will be insolvent by year's end are growing rapidly.

The companies have been warning that they would run out of money for some time, but crushing bills from their suppliers are coming due. It appeared unlikely that they could hold on until President-elect Barack Obama takes office next month, when he and a new Congress might be able to provide a lifeline, as a Congressional rescue this year looked increasingly unlikely. (...)

General Motors and Chrysler, for example, owe their suppliers a total of roughly $10
billion for parts that have been delivered. G.M. has held off paying them for weeks, and Chrysler is paying in small increments. But the cash shortages at G.M. and Chrysler are getting more severe, according to their top executives and other officials. (...)

Many of their suppliers are teetering on the verge of bankruptcy themselves, and do not have the luxury of extending credit much longer. (...)

When suppliers big and small start failing, the flow of parts to every automaker in the country will be disrupted because as suppliers typically sell their products to both American and foreign brands with plants in the United States."

"There's no question it will hit Toyota, Honda and Nissan too," said John Casesa, principal in the auto consulting firm Casesa Shapiro Group.

"Many of the small suppliers will simply liquidate because they don't have the resources to go reorganize in Chapter 11 bankruptcy," Mr. Casesa said.

"They'll just go away."

Here was what Rachel Maddow reported on this story before the Republicans fully sank the deal:

LibertyAir Blog

Get Ready

It is going to be a bad day on Wall Street. This is what we can expect now that the $14-billion emergency bailout for U.S. automakers collapsed in the Senate. The deal to help the auto industry fell a part last night as Republicans tried to break the UAW. Don't believe those lying Repuglicans, this had nothing to do with some principle, it is all about breaking the union. The collapse came after bipartisan talks broke down over union wage cuts, the Repugs wanted the union to basically handover the farm.

Markets oversea's are already falling hard on the news. U.S. Markets are expected to fall. Harry Reid has said he hopes Bush will tap the $700 billion Wall Street bailout fund for emergency aid to the automakers. General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain, and if GM and Chrysler fall it will need help.

The implosion followed an unprecedented marathon negotiations in Washington among labor, the auto industry and lawmakers who bargained into the night in efforts to salvage the auto bailout at a time of soaring job losses and widespread economic turmoil.

The group came close to agreement, but it stalled over the union's refusal to agree to wage cuts before their current contract expires in 2011. Republicans, in turn, balked at giving the automakers federal aid.

Leave it to the Repuglicans to put ideology above country.