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  • Oh My God, They Admitted It

    Great catch by Brian Faughnan over at Red State. He flags this Barney Frank interview with NPR:

    But let me ask you about the first thing you said, Congressman, because you said you don’t think $25 billion is enough.

    Right, I’m trying to explain to you how it works.

    OK.

    They get $25 billion — the federal government would be in the first position to be repaid. We will come ahead of the debt holders, the shareholders, etc. They file this plan on March 31. If, on March 31, the president does not believe that this is going to get them the viability with energy efficiency cars, they have to repay the loan; they get no more money. If they can show by March 31 a plausible way to go forward, then we would consider giving more money, again, under equally stringent conditions.

    So this could be $50 billion, $75 billion, $100 billion?

    Well, [insurance company] AIG, which I don’t think anyone would think was as important to the American economy as the auto industry … got $40 billion just now to make it up over $100 billion. To some extent, let’s not have a white-collar/blue-collar bias in our public policy. You know, those who say, hey, go bankrupt so you can cut back on what the unions have won — the unions have already made some concessions. But, you know, we’ve had enough anti-union activity, and enough increase in income inequality in this country. I don’t want to set a precedent that bankruptcy now is a way in which you undo what gains unions have been able to hold on to.

    So there you have it. As we have repeatedly pointed out, this latest $25 billion request is not the first, and will not be the last time Detroit comes to Washington with their hand out. Throwing good money after bad in order to save high paying union jobs, only kills other more productive jobs elsewhere in the economy. The bailout parade must end. The Big Three must declare bankruptcy and reemerge leaner, meaner, and ready to compete in the 21st century

    Posted in Economics [slideshow_deploy]

    24 Responses to Oh My God, They Admitted It

    1. m.smyth medina ohio says:

      Beating up on the U.A.W.and taking away our hard fought gains seems to be in vogue now.I am a skilled employee of Ford Motor and earn $33 per hour while toyota employees earn $29 per hour for doing the same job,not a great differance.Ford manufactures most of their vehicles in the U.S.A.while toyota only makes enough here to give the perception of made in America.So please give us a chance to do our jobs and contribute to the American economy

    2. Gene Laabs McDonough says:

      There was much said about the auto company ceo's showing up in Washington via private jet, and rightly so. However, please tell me how Nancy Polsie travels from CA to Washington all of the time, and at whos expense. They can tell everone else how to spend less but the old double standard never goes away!!

    3. Oscar Martinez, Sand says:

      There is no strategy to the bailout, it's just a Band Aid. The UAW has been worse for American Industry than most terrorists are to American Security. If we do give the Big 3 the money, concession number one MUST be that the UAW must be abolished.

    4. Brendan Page, Kingma says:

      A union can be a beneficial tool for employees, but when a company is unable to remain solvent due to the union contract then the union should be open to negotiation. Would you rather be unemployed altogether or negotiate a mutually beneficial deal? Is the union out for itself as an entity or does it have the best interests of the worker in mind?

    5. Doug Lang says:

      What is that in the sky?

      Oh, yeah, no problem spending millions on space shuttles and stations, with the country in a recession, but no money for our auto industry, of which millions are directly and indirectly dependent on for employment.

      And members of Congress are concerned about corporate jet travel by CEOs…LOL!

    6. gilbert zinke,Lewisv says:

      Ford Gm and chrysler would be better off to file bankrupty ,than goverment to feed them money.And as far as the unions goes they are the cause of the car companies problems to begin with. Over half of congress is so corrupt it is terrible.

      thank you

    7. rtk says:

      I am sorry UAW; but, you have personally weakened the auto industry, ruined public education, and I am sure that you have scared away investors to any industries in which you are involved. If it were not for your voting power, the democrats and our new president-elect would give you any attention.

    8. R.Reiher says:

      m.smyth says “employee of Ford Motor and earn $33 per hour while toyota employees earn $29 per hour” Not true—Toyota isn’t burdened with an Ford’s unmentioned union benefits which cost and additional $43 per hour, not to mention the liability of Ford’s union retirement benefits for employees who are no longer working. And the topper is “Toyota only makes enough here to give the perception of made in America.” Toyota Corolla is the #1 US made car exported from this country.

    9. Robert Meyer, San An says:

      The unions are most certainly out for themselves. Their leverage of an uninformed base of union members to set the rules is the model our government has adopted. As R. Reiher points out, there are additional expenses over and above the wage scale imposed upon the employer of which the typical union member is unaware. The key term is uninformed. Because most union members/voters are unaware of the financial realities of running a business/country, it is easy to perpetuate the myth that big buiness is the villain. Funny that the same villanous big business is now deemed "too big to fail" and in need of a government (taxpayer) "bailout". Follow the money.

    10. Alfred Pryor Eldora says:

      First off I think all of this bail out business was a bad idea! When will it all stop, and how many fat lazy pigs will come to the trough before it is empty?? I have been in business now, myself being the boss 18 years. When my business has tough times nobody comes to bail me out! I have to dig deep into my savings sometimes, cut back on expenses and try and figure out how to make more with less!! You can not borrow money to get out of debt!! Debt is the killing disease here!! How can anybody believe that giving or loaning these places of business money at this stage of their bad decision making process be a good idea?? If I ran my business the way the government runs their check book or business I would be in jail right now!! This whole system that the government operates under is a complete mess! As a matter of fact I feel that most goverment regulation and the tax system in general is set up against me and other self employed people! At one time these unions were a good thing, but as it stands right now the union labor wage and benifit agreements are killing these companies!! No we don't need to completely get rid of the unions, but they need to take a hard look at what is really going on here! I have a friend in government and he is always working in arbitration to resolve labor disputes. He says that without a doubt the unions will say cut jobs, but don't even think about cutting our benifits! They are truly out for their ownselves!!

    11. Alfred Pryor Eldora says:

      How many generations of american people will it take to pay for all of this mess? Your grand kids will be paying for all of this mess in the form of higher taxes, greater inflation and devalued dollar! It will take even more money to get the job done as soon as your next paycheck! All of these people in these places of business and government are totally out of touch with the people who are out here working, trying to make it!!

    12. Bill - St. Charles, says:

      We can all thank unionization for the benefits we enjoy today(blue collar and white collar alike). That said the pendulum has swung too far in the direction of the union from a cost accounting point of view. Yes there are some skilled labor trades working in this industry that have gone through (apprenticeship programs) that are worthy of the higher hourly rate – however any position that can be learned in a few hours or evena week in a week should be in the maximum $15-18 pay range. That is still excellent pay for semi-skilled labor with ability to receive the benefits of healthcare as well. If these concessions are not made – the big 3 will be the non-existant 3 in short order.

    13. K Houghton, Redding, says:

      The US needs to remain a Country based on a free market. A government bail out the big 3 auto manufactures is a contradiction of this basic principle. Where will it end? Instead of traveling to Washington DC with their hands out the CEOs need to become the leaders they are being paid to be and come up with a plan to do what is necessary to survive. If they are not up to the task they need to resign. The Detroit auto industry needs to adjust to the demand of their market. If this means downsizing, throwing out the unions, merging then they need to get to it.

    14. Dennis Aderholt Soci says:

      The unions are the ruin of the auto companies. They have had their time and it is past.

    15. B. Bennett, Calif says:

      The CEOs' of the "big 3" are not the whole problem. The board of directors (bod)and stock holders must also take responsibility for the financial problems. Either the bod or the stock holders need to force changes in the management planning. I heard one of the talking heads say the other day that one of the "big 3" had lost billions in the last year. If this is true then the bod and/or the stock holders need to replace the CEO and staff.

      I know for myself the pension funds that pay my monthly income was removed from the funds used to operate the business thus is not a financial burden to the company's ongoing business expenses. This has worked for my company since this separation of funds was initiated back in the late 70s.

    16. C.Cusmano, Detroit,M says:

      We see the result of a cascade of a socialistic agenda from the democrats in congress these last two years. What caused this problem? Frannie Mae and Freddie forcing lending to people unable to afford a payback, banks drying up lending, resulting in media hysteria about a recession and of course consumers not buying large ticket items. If we have money to buy toxic loans from the banks, we certainly have money to loan the Big Three. The Dow dropped almost 2,000 points after Obama was elected, they understood that he is a socialist with a socialistic agenda. Not good for capitalistic economy. Oh well, we made it through Carter.

    17. Mark G says:

      The 3 must get rid of the union baggage. Unions are the problems – everywhere. They produce inferior products, expensive. Be it education or automobiles, they have ruined the very fabric of what made this country – the greatest country on earth. Ban Unions, bring individual prosperity back.

    18. Michael Hill says:

      I am a skilled worker UAW card in my pocket and make 18.35/hr.If working for the big three means I deserve more money send me the application! Never have union talks neared what they get.I just completed 30 years employment only 10 to go!

    19. SJK, Stockbridge, GA says:

      We have always had a tug-of-war between the worker and management in this country. I am not in favor of management taking advantage of the worker-we've had many incidents in our history of this. But, the UAW is no doubt the tail wagging the dog here. You have to be very low on brain power (or a member of the socialist/marxist party, formerly the Democrat Party)not to be able to understand what is going on.

      Allright, Barney and Nancy, et al, go ahead and give the big three their money. But note this…I will NEVER, EVER!! BUY A ANOTHER GM, FORD, OR CHRYSLER PRODUCT (And I'm a NASCAR fan!). I WILL WORK TIRELESSLY TO INFLUENCE AS MANY OTHERS AS I CAN NOT TO BUY THEIR PRODUCTS. If enough of us band together to apply the right economic pressure in a large enough dose, we can destroy the UAW and their commie benefactors in our "new government of change".

      Well now, I feel better!

    20. duelles says:

      m.smyth medina ohio _ I feel good about your salary. But the cost to Ford of you working is about $22/ hour MORE than the Toyota workers. As an investor- which you need to keep you job, this is how I vote – I am more likely to invest in Toyota or even Tata for that matter.

      It is simply the old buggy whip scenario.

      THe world has "changed" with more than the last election. As a residential remodeler, my business plan, materials, suppliers, labor force has changed over the past 35 years. This is how I make money to invest! Change.

    21. duelles says:

      Doug Lang writes:

      What is that in the sky? Science. Pure Science, that really only can be done on a scale of Government financed projects. Pure science endowment is, perhaps one of the few things Gov't can do well. The private sector benefits a great deal from the work we do in space. Undeniably.

      Companies that have mismanaged themselves, made bad Union deals, fail to lobby against federal Idiots and CAFE are in deep trouble. They need not have the financial commitments they have. If it is cheaper to procure parts from other countries and assemble here, well DUH! That is the new business model for success.

      You want change. Or do you want to preserve and send us back in time? Surprising at how progressive conservative economics can be!

    22. Debra Lee, Pittsburg says:

      I think unions ruined this country, but they're not the only thing that did. Doctors, lawyers and CEO's make way too much money, but no one cared until the little guy got tired of not having and now they want anything/ something and to sit on their butts while they collect it. The USA needs to rethink who they put into office and make them accountable. Once this happens, we can concentrate on what else in Washington needs fixed, including Unions.

    23. Ms. Edie Boudreau, P says:

      Bailouts are the fourth error committed by our govt. Carter signed the Community Reinvestment Act (CRA), which started bad loans, Clinton reinforced the CRA, which made it worse, and Obama's ACORN manipulated and terrorised lenders into giving loans to underemployed people that they knew wouldn't be paid.

      However, everyone was happy because Fannie Mae & Freddy Mac bought all of them, and the Democrats stopped regulatory or investigative bills that Republicans tried to pass. Corrupt politicans & Wall St. CEOs have filled their pockets all along, betraying the responsible people who have paid their own way. Now they have hung the Bailout noose around our necks & those of our descendents. The Big 3 have to file bankruptcy to reorganize & rid themselves of corrupt union regulations, or they will be history. We cannot bail them out too.

      It is time that American citizens revolted against our corrupt politicans. Have Pelosi & Reid recalled by their constituents; put Barney Frank, Chris Dodd, Frank Raines, Paulson, et al., in prison, and get back all the illegal money that they and the Wall St. CEOs took with them.

      Insist this country become Energy Independent ASAP through drilling, clean coal, nuclear reactors, & other unsubsidized means–which includes ethanol, which the govt. is subsidizing via sugar, corn, etc. crops, which also raises the price of our food. This will save $700 Billion a year to pay down our debt.

      Turn welfare (except for the sick/elderly), into workfare (jobs that illegals are working because 'Americans' won't do them), and offer training for higher-paid skills to collectors on their own time. Soon enough they will choose to learn jobs that pay more than minimum wage. Enforce our immigration laws by deporting current prisoners and all those committing new crimes, strengthen the Border fence, and jail businesses that hire illegals. That will soon benefit our social programs.

      Americans have to become pro-active and stop being victims!!

    24. Ms. Edie Boudreau, P says:

      Bailouts are the fourth error committed by our govt. Carter signed the Community Reinvestment Act (CRA), which started bad loans, Clinton reinforced the CRA, which made it worse, and Obama's ACORN manipulated and terrorised lenders into giving loans to underemployed people that they knew wouldn't be paid.

      However, everyone was happy because Fannie Mae & Freddy Mac bought all of them, and the Democrats stopped regulatory or investigative bills that Republicans tried to pass. Corrupt politicans & Wall St. CEOs have filled their pockets all along, betraying the responsible people who have paid their own way. Now they have hung the Bailout noose around our necks & those of our descendents. The Big 3 have to file bankruptcy to reorganize & rid themselves of corrupt union regulations, or they will be history. We cannot bail them out too.

      It is time that American citizens revolted against our corrupt politicans. Have Pelosi & Reid recalled by their constituents; put Barney Frank, Chris Dodd, Frank Raines, Paulson, et al., in prison, and get back all the illegal money that they and the Wall St. CEOs took with them.

      Insist this country become Energy Independent ASAP through drilling, clean coal, nuclear reactors, & other unsubsidized means–which includes ethanol, which the govt. is subsidizing via sugar, corn, etc. crops, which also raises the price of our food. This will save $700 Billion a year to pay down our debt.

      Turn welfare (except for the sick/elderly), into workfare (jobs that illegals are working because 'Americans' won't do them), and offer training for higher-paid skills to collectors on their own time. Soon enough they will choose to learn jobs that pay more than minimum wage. Enforce our immigration laws by deporting current prisoners and all those committing new crimes, strengthen the Border fence, and jail businesses that hire illegals. That will soon benefit our social programs.

      Americans have to become pro-active and stop being victims!!

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