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Oh My God, They Admitted It

Posted By Conn Carroll On November 21, 2008 @ 11:22 am In Economics | Comments Disabled

Great catch by Brian Faughnan over at Red State [1]. He flags this Barney Frank interview [2] 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 [3], this latest $25 billion request is not the first, and will not be the last time Detroit comes to Washington with their hand out [4]. Throwing good money after bad in order to save high paying union jobs, only kills other more productive jobs elsewhere in the economy. [5] The bailout parade must end [4]. The Big Three must declare bankruptcy and reemerge leaner, meaner, and ready to compete in the 21st century


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2008/11/21/oh-my-god-they-admitted-it-2/

URLs in this post:

[1] Red State: http://www.redstate.com/diaries/redstate/2008/nov/19/barney-frank-big-3-will-need-lots-more-money/

[2] interview: http://www.npr.org/templates/story/story.php?storyId=97187470

[3] repeatedly pointed out: http://www.foundry.org/2008/11/18/merely-the-beginning-of-the-bailout-parade/

[4] this latest $25 billion request is not the first, and will not be the last time Detroit comes to Washington with their hand out: http://www.foundry.org/2008/11/20/morning-bell-the-perpetual-bailout-machine/

[5] Throwing good money after bad in order to save high paying union jobs, only kills other more productive jobs elsewhere in the economy.: http://volokh.com/archives/archive_2008_11_16-2008_11_22.shtml#1227141469

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