First Washington decided auto makers needed bailing out, next it was auto parts suppliers, not to mention “too big” insurance companies. Now one Congressman is proposing federal bailouts for individual auto dealers. At today’s House Financial Services Committee hearing one Congressman floated a new proposal: Federal Floor Plan Financing. Auto dealers generally pay for new cars when they arrive at the dealership. Until recently, auto manufacturers offered their own “floor plan financing” loans for this purpose. Some automakers now find themselves unable to offer these loans to dealers. There are …
The financial crisis has exposed a trend that has been in the works for some time. Since the fall of communism, some of the more socialist countries have learned lessons from the Soviet collapse: free markets work, and government planning does not. Meanwhile, the capitalist countries have slept through these lessons, and have been slowly becoming more socialist. The financial crisis has made this crystal clear. For example, US car companies, and now auto parts dealers, have received bailout money. Sweden, every liberal’s favorite social-democratic country, has let their signature …
“We are the United States of America, we are not Sweden.” U.S. Treasury Secretary Timothy Geithner, March 23, 2009. “The Swedish state is not prepared to own car factories.” Swedish enterprise minister Maud Olofsson, March 22, 2009. “Today, Treasury Secretary Tim Geithner and National Economic Council (NEC) Director Larry Summers convened official designees to the Presidential Task Force on the Auto Industry to discuss recently submitted restructuring plans from Chrysler LLC and General Motors Corporation.” The White House, February 20, 2009.
In February, groups representing the auto parts suppliers asked for a $25.5 billion bailout from the Treasury. Yesterday, the Treasury announced parts suppliers will receive about one fifth of that through Troubled Asset Relief Funds: The Treasury Department announced a $5 billion program to aid struggling auto-parts suppliers, raising the likelihood the government will extend more aid to General Motors Corp. and Chrysler LLC. The assistance expands the government’s intervention in the auto industry, which was kicked off by Treasury’s $17.4 billion in loans granted to GM and Chrysler in …
When you do a Google news search for “TARP” there is a common theme throughout the results: more and more banks want to repay the money. The reason for the change of heart, it fuels government power within the financial markets and tax payers have had enough and rightfully so. This trend to return TARP funds started with smaller banks, such as the Community Bank of the Bay in California, who plans on repaying the $1.7 million in TARP funds after applying for them this past fall to shore up …
“If you don’t return it on your own, we will do it for you.” So warned Sen. Chuck Schumer (D-NY) referring to the $165 million in bonuses paid to employees of the 80% taxpayer owned insurance company AIG. And how did Schumer plan to force those employees to give their compensation back? With a specially targeted 91% tax. Rep. John Dingell (D-MI) later upped the bidding to 95% but Rep. Steve Israel (D-NY) refused to be out demagogued and proposed a full 100% tax. Speaker Nancy Pelosi (D-CA) then demanded …
As President Obama and Congress are starting to learn, it isn’t easy running American businesses from Washington. This week AIG threw bonuses in the faces of their new CEO’s on Capitol Hill, after Senator Chris Dodd (D-CT) specifically legislated that they could do just that. Senator Dodd is apparently wishing he hadn’t made that decision now. Now we learn that the auto companies that American taxpayers are bailing out an alarming rate are being forced into more bad decisions by lawmakers. Their new “bosses” on Capitol Hill are forcing them …
Dangerous currents advocating protectionism are alive and well on both sides of the Atlantic. A “Buy American” clause in the latest U.S. stimulus package may have been eased to avoid violation of bilateral trade agreements, but its protectionist intentions remain. But the European Union is in no position to lecture America about protectionism. In what the Financial Times describe as the biggest European auto bail out, France will give Renault and Peugeot-Citroën €3bn ($3.9bn) each in preferential loans in exchange for keeping jobs in France. Italy has quickly followed suit …
They didn’t support it the first time around and nothing has been done to indicate to Americans that change and sustainability are on the horizon. The Detroit Free Press reports, A new survey shows that 64% of likely voters are opposed to the federal government loaning General Motors Corp. and Chrysler LLC more money. In the survey, taken by Rasmussen Reports, 24% of those surveyed said they favor the government loaning the automakers additional money.” The only thing that is on the horizon is more taxpayer money wasted on handouts …
We know that the Obama Adminstration has a shaky commitment to free trade at best, but this statement by White House press secretary Robert Gibbs is troubling: “We have to ensure that the cars of tomorrow are built here by Americans, for Americans,” White House Press Secretary Robert Gibbs told reporters yesterday. Does the Obama Administration not want American car companies to sell cars to non-Americans? Non-Americans have money too ya know.
