Saturday, December 6, 2008

What Is Wrong With This Picture?

The United States government might ante up for an auto industry bailout in exchange for control over how the bailout is managed. According to My Way News,

“The government would order a major restructuring of Detroit’s struggling Big Three auto companies in exchange for a multibillion-dollar bailout under a plan circulating in Congress.

Skeptical lawmakers are weighing whether to dole out as much as $34 billion in aid to the automakers as the once-mighty companies make their second round of pleas for government help to keep them from collapsing by year’s end and potentially deepening an already painful recession.”

There are alternatives to an outright bankruptcy that might yield flexibility in restructuring efforts. The My Way story continues as follows.

With several lawmakers in both parties pressing them to consider a pre-negotiated bankruptcy - something they have consistently shunned - members of Congress and the Big Three both were contemplating a government-run restructuring that would yield similar results, including massive downsizing and labor givebacks.”

There is a certain obstinact by both union and management that might finally be softening. There is one variable that gives me cause for concern.

The same gang of suspects that ran Freddie Mac and Fannie Mae into the ground is now likely to be supervising the auto industry. According to My Way,

Rep. Barney Frank, D-Mass., who has been dealing with both the financial bailout and the auto rescue proposal as chairman of the House Financial Services Committee, said Obama is “going to have to be more assertive than he’s been.”

One of the things that rocked the financial system was Barney Frank being asleep at the switch. Maybe now that the Democrats are in power, they can start pointing their fingers at real culprits. Frank and his crew should be replaced by responsible individuals. Barack Obama has a lot of practice throwing his grandmother, his reverend and his buddies under the bus when they get in the way of his success. If he were to employ this skill with Barney Frank by replacing him with someone competent, then the country would be well served Sphere: Related Content

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