It makes you want to laugh. News headline: "AIG on track for 5-year payback." So it's come to this. Our nationalized companies now have Soviet-sounding five year plans. We all know how that worked out. According to UPI, AIG's CEO said "called the AIG's undisclosed plans 'Project Destiny.'" So maybe there is a plan, and maybe not. But it's a five-year plan if there is one.   Email This   Print This

From the BailoutSleuth: "The Treasury Department has made investments in 20 additional banks, adding $539 million to the amount of taxpayer money it has committed to U.S. financial institutions."   Email This   Print This

ING Direct is forgiving over $860,000 in mortgage payments to 500 contest winners.   Email This   Print This

Club for Growth Pleased with Rejection of Auto Bailout, Urges White House to “Just Say No”

Washington – The Club for Growth is pleased with the Senate’s rejection of the auto bailout. It is, at least, a temporary victory for American taxpayers. While Senator’s Corker’s substantive proposals might be the reforms needed to save the auto companies, these changes should happen in the context of a bankruptcy proceeding, not a taxpayer bailout.

At the same time, the Club for Growth urges the White House to reject plans to use a piece of the $700 billion TARP money to salvage the auto bailout. This would be a grievous mistake.

For starters, the auto companies are not “too big to fail.” America is lucky to have a thriving car manufacturing industry—it just happens to not be in Detroit. The bankruptcy of the big three auto companies will not have systematic catastrophic effects on the overall economy.

Second, bankruptcy is not a death sentence. It will give these companies an opportunity to restructure their balance sheets. In fact, bankruptcy will give them a new lease on life so that they will not need government financing.

Finally, as the federal government considers stepping in to save the day, it is important to consider how we got to the mess we’re in. Management and labor certainly deserve their share of the blame, but so does the government itself. Congressionally-imposed CAFE standards forced auto companies to make cars Americans don’t want to buy, contributing significantly to the companies’ troubles. How can we trust the federal government to save the auto companies when they played a major role in nearly killing them?

“The last thing the American taxpayers need is the federal government managing the auto industry from Washington,” said Club for Growth President Pat Toomey. “The federal government’s interference in the past is part of the reason they are in this mess. We urge the White House to drop plans to reconstruct the auto bailout in some other form. As Nancy Reagan used to say, ‘Just say no.’”

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It is now clear that the UAW pulled the plug on the auto bailout. It seems to me that all this really means is that they think GM and perhaps Chrysler can somehow limp along to Jan. 6 or Jan. 20 when they can pass a bailout that does not require them to work for wages and benefits comparable to other domestic manufacturing plants of foreign competitors. All in all, I'd say this is not a good sign about President-elect Barack Obama. I'm sure they ran this by him. So much for Obama opposing a "bridge loan to nowhere."   Email This   Print This

Sen. Bob Corker's (R-TN) remarks just before the vote on the filibuster: Mr. President, thank you. I want to express my deep gratitude to Chris Dodd for all the work that he's done over the last week, to Senator Durbin, who joined us in the meetings, and to all the people who've been involved in trying to reach an agreement. I do want to say, Mr. President, that this is a highly technical matter. It involved volunteer employed benefit accounts. It involved bonds. It involved all kinds of discussions that were technical in nature. And through all of that, and we had the United Auto Workers’ representative in the room. We had the three companies in another room. We were talking to bondholders on the phone, and certainly talking to our colleagues. We are about three words – three words – away from a deal. What my colleagues would like to see is just a date certain when something is going to occur. We offered any date in the year 2009 -- any date -- any date, just when will we actually get there. And I think what we have offered is incredibly reasonable. I think there is a way for us to get there. I still do. There are an awful lot of bright people in this room. This is an important issue. We have solved everything substantively and about three words keep us from reaching conclusion tonight. Again, we offered any date in 2009. We weren't able to get a definitive date. I think there's still a way to make this happen. By the way, I just want to say if this happens, this is so much better than what's before us on the floor. These companies are going to be able to go forward with only one-third of the debt level they now have -- one-third. They're going to be able to pay half of their VEBA, $21 billion, in stock so it is not cash. And the companies will be stronger than they have been in 40 years if we reach this agreement, or they will be in Chapter 11 because there are date certain things that have to occur. This is a very responsible piece of legislation. And I think that people on both sides have acted responsibly. But we are three words, maybe two, maybe four, somewhere in that range, away from having what I believe is a landmark piece of legislation -- landmark -- historic -- that would actually allow these companies to go ahead with strength that they have not had in my lifetime. And I regret that, but I thank all of those who have been involved.   Email This   Print This

Here are the Senate Republicans who voted for the bailout. It was defeated, 52-35 (60 votes needed):

Bond (MO)
Brownback (KS)
Collins (ME)
Dole (NC)
Domenici (NM)
Lugar (IN)
Snowe (ME)
Specter (PA)
Voinovich (OH)
Warner (VA)

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Below is a gem of hypocrisy, as reported ($) by Roll Call newspaper:

Sen. Kent Conrad (D-N.D.) described the [the auto bailout negotiations] as “still very fluid,” but he said Democrats and union leaders would likely be unwilling to agree to Corker’s language calling on auto workers to accept a pay reduction in order to be in parity with wages at foreign-owned auto plants.

“We can’t have Congress setting wage rates by statute,” Conrad said.

Senator Conrad, does that mean we can repeal the minimum wage? The same minimum wage that you supported?

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How did House members vote on the auto bailout and how much did they receive from lobbying interests who supported it? Find out here.   Email This   Print This

Duane Lester writes, "Thanks to Matt Blunt, Missouri doesn't need a bailout."   Email This   Print This