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  • No Contradiction Here

    Washington Post, January 16, 2009:

    Senate Votes To Release Bailout Funds To Obama

    In a personal pitch to Democratic senators this week and in two letters sent to lawmakers by his top economic adviser, Lawrence H. Summers, Obama has pledged to focus the rest of the TARP funds on homeowners and credit markets, and to bolster oversight of companies participating in the program.

    Summers also vowed to dedicate $50 billion to $100 billion to a “sweeping effort” to reduce foreclosures. And he assured lawmakers that Obama “has no intention of using any funds to implement an industrial policy,” a reference to the concerns of many Republicans that the money would be used to prop up the failing auto industry, which has been awarded a small share of the funds.

    Washington Post, January 16, 2009:

    Obama Outlines Conditions for Automaker Aid

    President-elect Barack Obama said yesterday that the nation’s struggling automakers must develop sustainable business models that set realistic production goals focusing on fuel efficiency in order to qualify for continued federal assistance from his administration.

    Posted in Economics [slideshow_deploy]

    8 Responses to No Contradiction Here

    1. Harry Thomas, Laurel says:

      The business plan that will work for the auto industry will never get the approval of the Obama administration and liberals in the house and the senate. Because to make money means they would have to build automobiles that people will want to buy at a price people can afford to pay. The green cars are not going to be anything people want or can afford. The auto industry is going to learn a valuable lesson here. NEVER invite the government into your business. I have a 98 dodge RAM and I am going to make it last until I have to surrender my license(I am 49 YO)do to old age. The wife is driving a 04 Grand Cherokee, I know we will have to replace it at some point but it won't be with any vehicle made by a company that my tax dollars had to subsidize.

    2. Michael Gleason, Cra says:

      I agree with Harry Thomas. Frankly the auto industry has been giving the customer what they want all along with various models. I believe that what will take place is a definite narrowing of choices of vehicles that can meet standards imposed by this new administration which is going to reflect more of the new world order philosopy in it's policy making decisions. With inflation bound to rise as a result of bailout give aways and the dollar shrinking to less value than the paper used in printing it fewer people are going to buy in the days to come. If they do buy they won't want junk with technology that fails and needs constant tuning and repair such as is the case with many American models. The industry won't survive when people hold on to their cars for 200,000 plus in order to make ends meet. This will cause further job cutting, fights with the union, and deeper debt by the industry. The money given to them will end up being a loss which we can't afford in everyway imaginable. I feel real sorry for our new president. He is going to wind up getting very bad press in the months to come. Much of which he will deserve.

    3. Michael Auer,FT.Myer says:

      Where are our Republican Reps. that we voted into Congress or the House? I can not believe that all of a sudden we have no voice, no one to read these proposals and stand up and fight against them. We need soneone without the Obama fever to stop the maddness,or have they all just gotten into line with the left so they to can kiss his ring? Government can not be in any business without screwing it up. Let the automobile makers file for bankruptcy,restructure and then we will go on to something else a little bit more important like not letting Obama buy into the housing industry or the insurance industry or any other industry. "COME ON"

    4. Ann Williams, Michig says:

      The Sunday Detroit Free Press has a front page article of interest. A woman making a sign "Buy American cars", and Americans responding: "This is America – we can buy any brand we want to!" I believe in competiton, but I also believe in common sense and keeping the American people employed. For over 25 years the American auto companies have had to compete with foreign manufacturers, quite well in my opinion. American buyers have refused to buy American, because "the American auto companies make too much money" – "spread the wealth". Well – the delicate "balance" of the American auto industry, the complacency of the American people, and politicians who will do anything to get elected & stay elected, is now "way out of balance." The automobile = freedom. It always has.

    5. Paul, Saint Paul, MN says:

      Hi Michael,

      You are going to have to look really hard for any Republicans, and more so even somebody with a conservative thinking process. The only ones left are the RINO's with no spine to be the strong voice of opposition that our Republic needs.

      They have not figured out that trying to get along has gotten them a one way trip to nowhere.

      The republicans need somebody out there every day, not just on election day giving the other side of the equation on the economy, spending (stopping it), and our nations security.

      No easy task with the so called 4th estate busy celebrating tomorrow, but try they must if they want to have any say in the near future.

      Paul

    6. Jerrod,Singapore says:

      There has not been enough emphasis on the role of the Unions in this situation. It is no secret that the compensation packages of existing and retired employees have been a major factor in the companies' problems.

      The UAW has employed a tactic of "mob rule" to negotiate these outrageous packages for themselves. They wanted more "say so" in company affairs ie. (their own compensation). Well this should not be a one way street. They should also share in the blame for the problem and the solution. The UAW could either take a decrease in benefits or lose it all.This should have been pushed by the Auto Execs. It was their responsibility to make the choices clear.

      The only two options for the Auto Industry should be to reorganize or shut down.

      Yes, that's right. Shut down. This may sound harsh but it would not be the end of the world.

      The automobile market, as in "the amount of cars purchased by Americans", will not change significantly. The remaining car companies will pick up the slack as well as hire on a large number of the released employees to be able to take on the new market share. That is, if these employees are willing to relocate to stay working (for those of you who have heard of the "job pool").

      There would be a period of adjustment. Just like pulling an aching tooth, it may take a little pain to ultimately end the suffering. You cannot take pain medicine indefinitely. It only masks the problem. It does not fix it.

      On the other hand this could allow for new companies to arise and take up the slack. Companies run by people who believe that business decisions should be left to those who know how to run a business. Not to employees, and certainly not to the government.

      Passing this problem off to the taxpayers should never have been an option simply based on the idea of "Who is responsible for these companies?". Unless you are a member of the UAW, one of the Auto Execs or a member of the board of directors…the auto companies are not your responsibility. Secondly, only the continued injection of money into a flawed business model will keep it running. When the bailout stops, there will certainly be a painful correction (like pulling teeth). This would be the same as not going ahead with the bailouts in the first place.

      The only difference will be that the taxpayers did not have to supply the costly "pain medicine".

    7. Marshall Hill-Michig says:

      All RINO's stand up for your JUST DESERTS!

      NOTHING!

    8. Mike, Hickory, NC says:

      "Obama has pledged to focus the rest of the TARP funds on homeowners and credit markets, and to bolster oversight (government control) of companies participating in the program (government take-over)"; "he (Lawrence H. Summers, "[Obama's] top economic adviser) assured lawmakers that "Obama has no intention of using any funds to implement an industrial policy"; "the money would be used to prop-up the failing auto industry, which has (already) been awarded a small share of the funds", and "President-elect Barack Obama said yesterday that the nation's struggling automakers must develop sustainable business models that set realistic production goals focusing on fuel efficiency in order to qualify for continued Federal assistance from his administration".

      How many of us see the obvious quadruple (4 times) "about face" glaring contradictions in those statements, or am I simply not drinking enough poisonous Leftist government elitist Obamanite "Kool-Aid" to miss them?

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