Now Bush has become death, the destroyer of the middle class:
President Bush announced $13.4 billion in emergency loans on Friday to prevent the collapse of General Motors and Chrysler, and another $4 billion available for the hobbled automakers in February with the entire bailout conditioned on the companies undertaking sweeping reorganizations to show that they can return to profitability.
The loans, as G.M. and Chrysler teeter on the brink of insolvency, essentially throw the companies a lifeline from the taxpayers that will keep them afloat until March 31. At that point, the Obama administration will determine if the automakers are meeting the conditions of the loans and will continue to receive government aid or must repay the loans and face bankruptcy.
The money to aid the automakers will come from the Treasury’s $700 billion financial stabilization fund and shortly after Mr. Bush’s announcement, the Treasury secretary, Henry M. Paulson Jr., who will oversee the aid to the auto industry, said Congress would need to release the second $350 billion for that program in short order.
By law, once Mr. Paulson makes a formal request, Congress has 15 days to reject it and deny the additional money. …
Mr. Bush, in a televised speech before the opening of the markets, said that under other circumstances he would have let the companies fail, a consequence of their bad business decisions. But given the recession, he said the government had no choice but to step in.
…
The loan deal requires the companies to quickly reduce their debt by two-thirds, mostly through debt-for-equity swaps, and to reach an agreement with the United Auto Workers union to cut wages and benefits so they are competitive with those of employees of foreign-based automakers in the United States.
…
In effect, the White House has required the auto companies to cut the equivalent of $13.5 billion in costs within three months, in order to repay the federal money and receive another infusion of capital that will keep them operating for the rest of the year outside of bankruptcy protection, or else providing financing while they reorganize in bankruptcy.That is an enormous amount of savings to find in such a short period, industry analysts said, especially given the bleak conditions under which the companies are operating. Auto sales are the worst since the early 1980s, and there has been no sign that banks or the car companies’ financing arms would loosen tight restrictions on loans.
…
And while the legislation that was rejected by Congress would have created a new position within the executive branch to oversee the automakers, a so-called “car czar” Mr. Bush said on Friday that while he remains in office, the emergency loan program will be supervised by Mr. Paulson.
…
The decision to use the stabilization fund was also a major turnabout for Mr. Bush, who for weeks had insisted that the Treasury program should not be used to help the automakers.In the end, it was clear, however, that Mr. Bush did not want G.M. or Chrysler, both American icons, to go down on his watch.
Bush wins the trifecta with this one:
(and since we’ve all along said he’s got the I.Q. of a pillbug , so our expectations must be low), while watching it skid into bankruptcy anyway both because he is an idiot, and because the terms of the loan are impossible to meet;
2. He gets to drill auto worker union wages straight down to the lowest common denominator of the Right to Starve South immediately, while also ensuring the union’s eventual demise by effectively guaranteeing the bankruptcy that will leave Ford as the only UAW manufacturer in the country;
and,
3. He gives himself iron-clad protection against Congress shutting down the final $350 Billion TARP payment, which was unlikely to be released after each and every non-braindead American figured out that TARP was either a criminally mismanaged credit liquidity program or a perfectly managed Treasury liquidation program.
As a bonus, Bush gets the Thief Lord himself, Hank Paulson, as both the Pirate King of the Bank Bailout and as “Car Czar.”
And because it’s a contract, not an Executive Order or an act of the Treasury Secretary -after turning TARP inside-out to fit his Wall Street comrades most comfortably, Paulson certainly could have justified a loan to GM and Chrysler out of the remaining $350B under his own authority if BushCo wanted him to – this prelude-to-a-bankruptcy “loan” can’t be undone by Obama with a simple wave of the Chief Executive’s magic wand.
And the Senate, even if we get Franken, will still be subject to filibuster and holds, making it unlikely that there could be a legislative antidote to this noxious poison pill.
So, all of you out there who depend on the auto industry for your jobs and who cheered Bush on as he destroyed Iraq and then re-elected him in 2004: How does it feel to have your protector and savior bringing his Shock + Awe™ back home?
Current Comments