Why GOP Conservatives Should Let The Auto Bailout Happen

There's a solid argument for conservatives to not oppose the current auto bailout too strongly less they fall into a trap that could keep them in the minority for years. If you adopt a cynical, purely political reasoning, that's the move that makes the most sense.

It's being called a "bridge loan" for a reason. Everyone knows what's coming after January. It'll have a much bigger price tag than this. So what happens if a GM fails and declares bankruptcy before January?

Congratulations GOP! You are now known as the only reason the American auto industry went down the tubes and the highly newsworthy blood of every disappearing auto sector job around the country will be on your hands. And all for a measly $15 billion - after you'd already given several times that to Wall Street. Also no one will ever get around to debating what a full scale rescue package would have actually cost.

Contrast that with the potential debate after January when we are talking about a much larger number of taxpayers dollars, plus many more nationalization-like demands by the Dems fronting for that bill. And even with all that they still won't be able to guarantee the long-term viability of the industry without even a great infusion of taxpayer cash down the road.

I'm not suggesting conservatives shouldn't ultimately draw a line in the sand over bailouts - just that the better time to draw a firm line might be in the next Congress and not now. And the GOP would also have more time to think through and present their own viable alternative.

Comments

[Fellow American]

I see your point, but I think Conservatives need to stop playing games and start sticking to their principles.

[Anon]

So what if GM declares bankruptcy? The Tribune Corp. declared bankruptcy and wonder of wonders the Chicago Tribune and the LA Times are still publishing, still making payroll and will continue to do so.

The GOP voted for the financial bailout against their better judgement and now people are calling it "Bush's bailout" the same thing will happen w/the auto bailout, it will become the Republicans bailout because it was passed during the Bush Administration.

Bankruptcy does not equal the disappearance of the company. GM is just using scare tactics and believe me, thousands of people are going to lose their jobs no matter what unless we provide the car companies w/an open check book. Which of course, Obama might ultimately do.

Saying you voted for something you were against is lame, it just as lame when the GOP does it w/this bailout as when the Dems did it w/the Iraq war, even lamer actually.

[steveegg]

The bad news is the line has to be drawn before the next Congress is sworn in. There are not enough free-market Republicans in the next Congress to stop anything.

[ErikTheRed]

I don't think they'll be able to stop the bridge loan. Reid only needs to get 10-15 Republicans to vote for it (depending on how reliable his caucus is). That should be doable. The best of all worlds is to get the bridge loan despite ardent Republican opposition.

[Fred Beloit]

Dan, I can follow your reasoning and its merits. But it seems every time a basic conservative principle is eroded, we take the rap anyway and the country moves left. When we fight (Contract with America) we win finally.
I guess it might come to whether one believes the bailout will work. Chrysler's loan worked, for a while, but this is the whole damned old American car industry. They replaced the manufacturers of buggy whips, coaches, surrys, etc, now didn't they. I think it is time for them to swim but more probably sink. Their (former) customers have spoken. Some of the Asians make overall better autos (many right here in the country) and India is just beginning.

[Fred Beloit]

Excuse the afterthought. The money for the industry bailout would be better used to help the laid-off auto workers retrain or find new jobs, if bankruptcy doesn't work.

[Fred Beloit]

An after, after thought. Did we taxpayers bail out Hudson, Studebaker, Tucker, Stutz, REO, Packard, Auburn, Hupmobile, Nash, Essex, Cord, Pierce-Arrow and the rest?

[jharp]

"So what if GM declares bankruptcy?"

That is the question. And I don't think anyone knows the answer.

It very well might not end up like the Tribune Co.

[Anon]

The public should always be distrustful of any major projects that have to be done "NOW OR ELSE"...that usually means that the data to back up the need for the program is faulty and if too much time is given for decision-making all the flaws will be found out.

I am generally in favor of protecting critical and strategic sectors of the economy, which is why I have no problem w/farm subsidies in theory, in practice the subsidies are poorly administered but I'd rather see fallow fields than housing developments because over the long term we need to retain our agricultural ability.

So, I would generally not be opposed to protecting a critical manufacturing sector like steel or autos. But, in this case, the mismanagement has been so spectacularly bad for so long, with so many lies, so many short sighted policies, such terrible allocation of their money that these companies deserve the bankruptcy they are facing.

I don't see letting them go legally bankrupt as the same as the U.S. car industry disappearing and I absolutely do not believe for a nanosecond that millions of people are going to be automatically put out of work. This is a lie. I also don't necessarily see why we need 3 auto makers, instead of perhaps 2.

[Philip McDaniel]

I fail to see just why there is so much urgency for this bailout. Even if passed this month the process will take at least one or two months to implement. If the Big Three cannot wait until after January 20th then NO bailout will save them. On the other hand, a bailout passed through this congress and signed by this administration will guarantee that Republicans will get the blame when the inevitable failure comes. The Big Three, Detroit, Flint and indeed Michigan itself, are all in serious if not terminal crises. Bankruptcy of the auto makers and some serious political restructuring in Michigan is the only viable answer. If the Democrats want so desperately to bail out the auto makers let them do it on their watch.

[jharp]

"The public should always be distrustful of any major projects that have to be done "NOW OR ELSE"...that usually means that the data to back up the need for the program is faulty and if too much time is given for decision-making all the flaws will be found out."

Kind of like how we were sold the Iraq War. I agree with you.

[Fred Beloit]

Harpo is right. Iraq had to be offered the choice to be a democracy as soon as possible so that Iran would face friendly (to us) governments on two fronts.

[Anon]

I don't understand how a bridge loan for 3 months is going to protect anyone's job over the long term. The business models of GM and Chrysler are not sustainable. A huge, huge piece of this is the exorbitant benefits that the UAW received, but that too, is the fault of the companies for kow towing to them all these years and then having to create a business plan that was driven by having money to pay these ridiculous benefits. They should have said no 20 years ago and possibly they wouldn't be in this mess. It is also a pipe dream that anything other than a blank check book is going to save these jobs for the long term. Granted, the spike in oil and the bank catastrophe exacerbated this fall, but it was always going to happen becuase the whole model is predicated on bullshit: easy credit and cheap gas. Neither of those things could endure forever but based on the car companies strategies you would think that cheap gas and cheap credit were immutable.

[mark l.]

ole'...
15 billion?
even if the bull emerges past the cape, the wall is less than 5 ft away.

The 'long play' on dealing with the dems depends on how deep the deficit runs for 2008. It is very likely to tip one trillion(7.6% of gdp) for 08.

2009 is the most important year for how the dems want to proceed with spending. I would hope, by then, that we are done with bailouts and logic would provide that Obama should be able to 'cut' the deficit drastically. Without a 700 billion bailout on his books, it should be child's play to cut the deficit in half-500 billion, tops.

If the dems do go on in the belief that once we have spent a trillion in debt, we will always be able to spend a trillion, they are out in a 94 style revolt.

15 billion now, means 80-120 billion over the next year, 2009, completely on the democratic books.

[Anon]

Unfortunately, I don't think that is how it will work.

Due to the many Bush excesses the Dems are going to be able to blame a lot of this economic mess on the GOP for at least a couple of years. Obama has already said that now is not the time to worry about deficits. Since we've already had massive deficit spending under Bush, the meme will be that if we could deficit spend to finance a war that should never have been fought, then we can continue to deficit spend to 'save' American jobs, etc.

The Dems will be able to successfully argue that its Bush's fauilt they are deficit spending, and to a degree, a small degree, they will be right. Its also true that more massive deficit spending will further cripple the country in the long term, but nobody cares about the long term, least of all Barack Obama and the new Democratic Congress. They care about the 2010 Congressional election.

Nobody has cared about massive deficit spending all this time, it is not logical to think when the whole country is in fear of a depression and looking for a government handout that they will start caring about them now.

[jharp]

"2009... ...and logic would provide that Obama should be able to 'cut' the deficit drastically. Without a 700 billion bailout on his books, it should be child's play to cut the deficit in half-500 billion, tops."

Ain't gonna happen. There is still that pesky $12 billion a month in Iraq. The states are broke. The tax base has been decimated. Property taxes, sales taxes, and income taxes are all decreasing.

You have no idea the magnitude of the Bush disaster. Think 1932.

[jharp]

And mark l thinks logic dictates that Obama should easily cut the deficit drastically. Geez.

http://news.yahoo.com/s/csm/20081211/ts_csm/asafetynet

East Orange, N.J. – As a rising number of Americans sign up for unemployment benefits, many of the state-funded trusts that pay them are on the decline.

At least 12 of them are on the brink of insolvency. In 20 other states, the funds have lost value, even before the big job losses of the past two months.

While unemployed workers will get their benefits – federal law requires it – the trust fund woes are putting states into a peculiar squeeze. They're loath to raise taxes or cut services in a recession, so many are racking up new loans. That debt burden will affect residents for years to come.

[syn]

", the meme will be that if we could deficit spend to finance a war that should never have been fought,"

Ok BUT the incoming President will have to finance the war. Your assumption is that the war will somehow magically end on January 21, 2009 and this is simply not going to be the case. The incoming Presdient cannot afford an attack on America's homeland while in office, it will ruin his image, as well as, any chance for him to SAVE THE WORLD like FDR!.

Listen up Lefties, you are no longer relevant to Barark Hussein Obama; he won the White House and dosen't need you anymore so the media is sending you back to Nowhereville until you are need in 2012. Suckers.

[syn]

Now if the Michigan Auto industry fails won't all the auto workers simply move to those southern states where other auto industries are thriving? For example, if GM goes down won't Toyota pick up the slack for those lost products?

I don't think anyone can bailout failure no matter how many billions are blown.

But hey, if jharp wants to spend his own money and life bailing out failure who am I to stand in his way.

[mark l.]

700 billion for finanicials, is acceptable, in the sense that it is billed as a one shot deal.

Does that mean that we can go with a 700 billion dollar spending spree, yearly?

believe me jharp, if obama believes that since the guy(with a democratic congress) before him, blew a 1 trillion dollar deficit up our asses, that he can can keep on blowing more, it will bring economic doom.

what stimulus is obama going to bill for 700 billion, as a one time event? That's why the bailout is sticking in evrybodies craw-it's not a one time event.

economic stimulus checks for 2300 per citizen?

ironically, the US is already getting and economic stimulus check.

I'm saving 100 bucks a month on gas from its previous levels. It's a 1200 dollar yearly stimulus check.

[syn]

One last point, ironic that after some thirty years of environmentalists (who funded billions for Democrat politician campaign coffers) endlessly ragging on about how Americans are addicted to those evil fossil fuel machine which are killing the Earth and all living things, we are now being told that if we do not bailout this evil fossil fuel industry so hated by environmentalists thousands of Americans will lose their jobs and their health care and will be homeless.

The Triumph of the Obtuse.

You're a real winner Jharp!

[Anon]

No, nothing in my post indicates that I think Obama is going to stop spending money in Iraq. I've said from the beginning that he would not pull out of Iraq in 16 months and that we were stuck there for the forseeable future and that any 'draw down' would be symbolic only. This has nothing to do with an attack on the US since nobody from Iraq ever attacked us prior to our invasion of their country, it has to do with the fact that we cannot now get out of Iraq and let the country further disentegrate so we are stuck paying $12 billion a month for the next several years.

That has zero to do with deficit spending by Obama. He's going to deficit spend because Bush did it, and he's going to make the case that the economic calamity is much more serious a threat than Iraq was.

There are two different things at play here. One, deficit spending is bad and has to stop. True. Two, deficit spending is not going to stop because the country is used to it and because Obama will easily justify it because of the economy.

Of course we CAN bail out failure, we're doing it. And we're going to keep doing it apparently. We've bailed out the failed banks, we're in the process of bailing out every nitwit who thought he was smart enough to outwit the bank w/his mortgage and are about to bail out the auto industry. Again, two separate things. Bailouts are bad for all kinds of reason. But, that isn't stopping us from doing it.

[syn]

Here are your words anon:

"the meme will be that if we could deficit spend to finance a war that should never have been fought"

Actually nothing in your post indicated Iraq, you indicated 'financing a war that should never have been fought'.

"No, nothing in my post indicates that I think Obama is going to stop spending money in Iraq"

Now you are moving your own goalposts.

By the way, lucky for Obama that Iraq is won however the WAR he must fight will still continue and will still need financing.

[syn]

"Of course we CAN bail out failure"

How can we bail out failure?

(as an aside, the more the media attempts to portray the Illinois Gov. and his wife crazy, insane, distured while attempting to keep Obama distanced from the mess, the more this will inspre the Blogovich to turn on various Chicago machine politicos such as Rahm Emanuel et al. I DO hope the media keeps up the onslaught)

[mark l.]

we are still under 600 billion for Iraq, over 5.5 years.

http://www.nationalpriorities.org/costofwar_home

Dems have been telling us that we can't afford it. So they are going to spend another 700 billion in 2009? what about 2010?

"You have no idea the magnitude of the Bush disaster. Think 1932."

when does obama take over responsiblity?
inauguration, or two years after his inaugration?

when you provide your window of responsiblity, please rememebr that if the economy turns around before you would believe obama should be held responsible, then you have also provided that bush would have been the architect of the turnaround.

the consensus is that we are in the positive on gdp growth 3q/4q 2009. thanks to bush, or thanks to obama?

[Fred Beloit]

And these western Democratics will be wanting a bailout led by their hat-in-hand next president of Austria. NO WAY.
http://www.breitbart.com/article.php?id=D950LT980&show_article=1&catnum=0

[jharp]

"lucky for Obama that Iraq is won"

KIRKUK, Iraq (Reuters) - A suicide bomber killed at least 46 people and wounded around 100 on Thursday in a crowded restaurant near Iraq's ethnically mixed city of Kirkuk, shattering the calm during a major Muslim holiday, police said.

The bomber detonated explosives inside the Kurdish restaurant, police said, which was packed with government officials, women and children during lunch hour north of Kirkuk, a city disputed by ethnic Kurds, Arabs and Turkmen.

[Fred Beloit]

syn says: "The Triumph of the Obtuse. You're a real winner Jharp!"
It is also like the oft quoted triumph of hope over experience, i.e., a second marriage.

[jharp]

the consensus is that we are in the positive on gdp growth 3q/4q 2009.

Posted by: mark l. | Thursday, December 11, 2008 at 01:59 PM

Have you been smoking the weed? Where did you come up with this?

At this point we don't even know if the Detroit automakers are going to survive. I'm sure them going down wouldn't have any impact on GDP.

[jharp]

"when does obama take over responsiblity?"

He is sworn in on Jan 20th.

For national security issues he takes responsibility Sept 12th 2009. Since everyone knows 911 was Clinton's fault and the incoming President needs 9 months to prepare.

For economic issues I'd say when his policies begin to take effect.

[Fred Beloit]

Is Harpo saying because we suffered heavy losses on 9/11 we have been defeated in the war on terror? There are never casualties in a mopping up operation, Harpo? I'm sure you have mopped up enough floors in your time so that you know thes is untrue. "Stay away from that mop, there Harpo. You know you don't know nothin' 'bout machinery."

[anon]

What do you mean how can we bail out failure? We can bail out failure by giving billions to failed enterprises, just as we are doing.

I'm not moving my goal posts at all. The Iraq War should never have been fought, it was a mistake. Bush ran up huge deficits funding the war in Iraq, among other boondogles. Obama is not going to pull out of Iraq or be able to save much money in Iraq. Obama is going to continue to deficit spend.

If your idea of "winning" a war is spend $1 trillion to depose a dictator who posed no threat to your own country, while in the process be responsible for the deaths of hundreds of thousands of Iraqis, the creation of Al Quada where it never was before, the death and injury of thousands of American soldiers, the destruction of Iraq's infrastructure and economy all so that six years later you can claim "victory" because Hussein is dead and the country has stopped sliding toward all out civil war, then have at it. I call that the worst military blunder in US history.

[mark l.]

"the consensus is that we are in the positive on gdp growth 3q/4q 2009.

Posted by: mark l. | Thursday, December 11, 2008 at 01:59 PM

Have you been smoking the weed? Where did you come up with this?"

http://www.marketwatch.com/news/story/UCLA-Anderson-Forecast-Nasty-Recession/story.aspx?guid=%7B4A6382B9-90E5-4DD5-A3DA-4CF2B9E21B86%7D

"The UCLA Anderson Forecast now expects that real Growth Domestic Product (GDP) will decline 4.1% in the current quarter, followed by respective declines of 3.4% and 0.8% in the first two quarters of 2009."

[mark l.]

"NEW YORK (CNNMoney.com) -- The nation is expected to lose 2 million jobs in 2009 and undergo economic contraction through the first half of the year, according to a widely watched report released Thursday."

http://money.cnn.com/2008/12/11/news/economy/anderson_forecast/?postversion=2008121104

[mark l.]

jharp-

can you provide any source that suggest we will still be in recession in 2010?

you have no idea what you are talking about.

[mark l.]

"Since everyone knows 911 was Clinton's fault and the incoming President needs 9 months to prepare."

I blame al-queda.

[jharp]

mark l,

From your links.

"The outlook for California calls for a very weak first three quarters of 2009, with the glimmer of a recovery in the fourth quarter."

"Unemployment in California is going to be "ugly," the report said. "We expect it to grow to a high of 8.7% next year and to remain at that level the following year."

And your conclusion is "the consensus is that we are in the positive on gdp growth 3q/4q 2009."

And you have the audacity to accuse me of not knowing what I am talking about? Take a look in the mirror. It is you that emanates ignorance.

"can you provide any source that suggest we will still be in recession in 2010?"

Yes, here's one. And there are plenty more.

http://www.latimes.com/business/la-fi-econ2-2008dec02,0,2587872.story

The National Bureau of Economic Research, the private body charged with determining the onset of a recession as well as its endpoint, said Monday that the current downturn met its definition of a recession: "a significant decline in economic activity spread across the economy, lasting more than a few months."

The downturn began, the bureau said, at the end of last year as businesses started slashing jobs -- which they have done every month this year.

The group did not say how long the recession might last, but the stock market reflected widespread pessimism. After a widely followed index of U.S. manufacturing activity fell to its lowest level in 26 years, the Dow Jones industrials tumbled 679 points, or 7.7%, and the Standard & Poor's 500 index plunged 8.9%.

"This downturn promises to be the worst since the Great Depression in the 1930s," said Joshua Shapiro, chief U.S. economist at forecasting firm MFR Inc. "We've only just started. I can't see bottoming out until sometime in 2010."

[mark l.]

"On average, economists expect the downturn to conclude in June 2009."

http://online.wsj.com/article/SB122894049567595513.html?mod=googlenews_wsj

funny, because June 2009 is still 2q.

"The downturn would be deeper still, in our view, were it not for an ultra-aggressive combination of monetary and fiscal stimulus that will soon move into high gear," Morgan Stanley economists Richard Berner and David Greenlaw said in a research note. "Authorities are pulling out all the stops: Quantitative easing by the Fed and the largest-ever fiscal stimulus package likely will promote stability in the economy late in 2009 and a moderate recovery in 2010."

[mark l.]

same link, doesn't support your 1932 scenario.

"Periods of growth in early 2008 offset some of the expected weakness this year and next. That makes the current recession deeper than those in the 1990s and early this century, but it doesn't reach lows seen in the 1970s and 1980s."

[mark l.]

so jharp-
why don't you give me some 'edjucashun' on when you believe the recession will end.

not employment numbers...actual gdp growth.

I stand by my statement that postive growth will occur in the second half of 2009.

I just provided a citation of economists who also hold that as a 'consensus'. can you do the same?

if we come out of a recession within 9 months of the messiah taking office, who gets the credit? You could argue that obama's spending will dig us out, but then you would also have to give bush credit for the 700 billion he has already provided.

[mark l.]

jharp=ftard.

[jharp]

The WSJ is Fox News in print.

And of course these guys wouldn't have any agenda.

"Morgan Stanley economists Richard Berner and David Greenlaw said in a research note." The same guys who led us into this mess.

Pretty funny headline to your link. Same link.

"Outlook Darkens as Recession Deepens"
"Economists Forecast Lengthiest Downturn Since Great Depression"

And to enlighten you mark l, nobody knows. As a matter of fact we just found out in the last month that we've been in a recession since December of 2007.

I am not optimistic. I think it's going to be long and deep.

And if you don't I'd love to hear of what industries are due to prosper first and lead the way.

[mark l.]

{"can you provide any source that suggest we will still be in recession in 2010?"

The group did not say how long the recession might last,

if you bothered to read the quote that YOU provided, you might have caught this little detail...

"The group did not say how long the recession might last".

you are the dumbest person I know. You can't even read and it is clear(again) that you don't know what you are talking about.

"And there are plenty more"

hint: find a link that actually supports your belief that there will be no economic growth by 4q 2009.

[jharp]

"why don't you give me some 'edjucashun' on when you believe the recession will end."

http://www.nytimes.com/2008/07/18/opinion/18krugman.html

I agree with the Nobel Prize winning economist Paul Krugman. Mid 2010 at best.

[mark l.]

"The WSJ is Fox News in print."

The most widely circulateed paper in the US?

I was unaware that the group of economists discussed also worked for fox news.

you are an imbecile.

[Anon]

I think it is highly unlikely that this recession will end by Q3 2009, I can't see any indicators that realistically support this, I find it especially troubling that these predictions of growth in 09 are based on Obama's nebulous stimulus package, which in my opinion isn't going do to much of anything other than waste taxpayer money.

[Orion]

Newsflash: If the Republicans don't vote for the bailout they'll be blamed and if they DO vote for the bailout they'll be blamed. The MSM will give the GOP the dirty end of the stick no matter how they vote. So they might as well stick by principles and be proven right in the long run.

[jharp]

"The WSJ is Fox News in print."

The most widely circulateed paper in the US?

Yes. Murdock owned. And your quote is an excellent example.

"Morgan Stanley economists Richard Berner and David Greenlaw said in a research note."

Out of all the economists to choose from they publish the opinion of two right wing hacks who led us into this mess.

[Fred Beloit]

Harpo wrote this clever line: "The WSJ is Fox News in print." He is very funny and creative...nah. Any money he just comandeered it from Muffpost or somewhere.

[anon]

I kind of agree that the Republicans are going to be blamed either way. If they vote for the bailout and it fails it will become a "Republican/Bush plan" or it will have failed because they waited a couple days too long. If they kill it, then everything else that happens will be their fault.

It's too bad they don't have an alternative, since most of the public is against the bailout and if the Republicans could come up with either a good option or some compelling talking points on why this is a bad idea, it might begin their turnaround.

Of course, at this point, given the media's newfound sense of self, they would probably just ignore whatever they had to say and keep on writing stories about millions of jobs lost unless....