Detroit Bailout Watch: Looks Like Bush Blinked

The bailout failed in Congress due to principled objections, offering the prospect of drawing a line for the nonstop series of bailouts.

However, the Bush administration decided to use its own discretion. In other words, as veteran (and prescient) auto industry reporter Paul Ingrassia noted yesterday: “Bush Blinks on the Auto Bailout”

You have to hand it to Ron Gettelfinger, president of the United Auto Workers union, and his colleagues. Negotiating for a living is, you know, what they do. And they're good, very good. They know when somebody's about to blink.

So it was last Thursday night that Mr. Gettelfinger rejected the deal offered by Senate Republicans for interim bailout money to keep General Motors and Chrysler alive for a few more months. The UAW chief was betting that the Bush administration would blink, and that the union would get a better deal from the politicians than it would get from the marketplace or from a bankruptcy judge. It's a ploy we all learned in childhood. When dad won't give you what you want, turn to mom.

Mr. Gettelfinger was right, of course. By the next day the Bush team was rapidly reversing course and declaring its willingness to use TARP money -- from the $700 billion designated to bail out financial firms -- to keep the Detroit companies going without the concessions sought by the Senate GOP.

This is consistent with the Bush kick-the-can economic philosophy of the past 4-5 years. While he articulated some free market principles in his initial campaign, our 9-11 president spent the rest of his term making short-term economic choices rather than spending any political capital on a long-term fix.

Comments

[casey00001:]

What a load of crap. Like its Bush's fault.

2008 Dec 16 08:24 AM

[BUGGS:]

CHAPTER 11, THE PRESIDENT BLINKED AND SO FORTH!! I AM TOTALLY DISGUSTED WITH WHAT I AM HEARING FROM SUPPOSEDLY INTELLIGENT PEOPLE. STOP WITH THE TUNNEL VISION AND LOOK AT THE BIG PICTURE!!!! AN AVALANCHE STARTING AT THE TOP OF A HILL AND THERE IS A TOWN AT THE BASE. THE RESULT WOULD BE TOTAL DESTRUCTION. GENERAL MOTORS DOING ANYTHING OTHER THAN BECOMING A VIABLE ENTITY AGAIN WOULD BE CATASTROPHIC FOR THIS ECONOMY. LET'S TAKE THE RETIREES AND THEIR HEALTH BENEFITS OUT OF THE PICTURE FOR A MOMENT. THE JOHNSON CORP SUPPLIES GM WITH APPROXIMATELY 60% OF THE PARTS REQUIRED FOR MANU-FACTURING AND THE REMAINING 40% IS PURCHASED BY THE IMPORTS. THE BEGINNING OF THE AVALANCHE IS GM FALLING OR GOING INTO A CHAPTER 11 THEY CAN ILL AFFORD; THE AVALANCHE CONTINUES BECAUSE JOHNSON DOWNSIZES OR MORE APTLY SHUTS DOWN (JUST LOST 3/4 OF THEIR MARKET); AND THE AVALANCHE CONTINUES. WHERE ARE THE FOREIGN MARKETS GOING TO ACQUIRE THEIR PARTS??? THE AVALANCHE IS STILL GOING BECAUSE WE FORGOT ABOUT THE AUTOMOBILE PARTS RETAIL OUTLETS, TIRE MANUFACTURERS AND RETAIL STORES, AND I GUESS AUTOMOBILE SALESPEOPLE DON'T NEED TO MAKE A LIVING!! BUT THE AVALANCHE ISN'T FINISHED YET BECAUSE WE FORGOT ABOUT THE PLASTIC MANUFACTURING PLANTS THAT SUPPLY GENERAL MOTORS, AND THE RADIOS. WE ARE ALMOST TO THAT TOWN AT THE BOTTOM OF THE HILL; THE COMPANIES THAT MANUFACTURE THE BOLTS, NUTS, SPRINGS AND ALUMINUM PRODUCTS JUST TOOK A HUGE HIT AND THE INTERNAL REVENUE IS LOOKING REAL STUPID BECAUSE THE TAX DOLLARS THEY WOULD NORMALLY RECEIVE FROM GM ARE NOT FORTHCOMING! UMMM, THERE GOES THE TOWN AT THE BOTTOM OF THE HILL!!!

2008 Dec 16 11:03 AM

[jackooo:]

There is no end in sight for the money that will pour into the auto industry.
People are getting layed off by the thousands. Will they buy a car? NO.
If it was a green car would they buy it? NO. Gas prices have dropped.
The same old culture will rip away all the money it can without a viable plan to succeed and Bush and congress will help their friends while we pay the tab.

2008 Dec 16 12:03 PM

[Homer II:]

Hey BUGGS,

1.) T_U_R_N O_F_F Y_O_U_R C_A_P_S__L_O_C_K

2.) U_S_E _S_P_E_L_L C_H_E_C_K_I_N_G

3.) S_T_O_P U_S_I_N_G R_E_D_U_N_D_A_N_T P_U_N_C_T_U_A_T_I_O_N

4.) M_A_K_E S_M_A_L_L_E_R P_A_R_A_G_R_A_P_H_S


5.) G_O B_A_C_K A_N_D F_I_N_I_S_H 4_T_H G_R_A_D_E


illiterate moron...

2008 Dec 16 11:58 PM

[paul:]

The union sends someone to negotiations that will lose his job if he comes back empty handed. The coprorations send someone that is looking at the hourly rate and benefits as one component of costs. If he doesn't cave to union demands, they strike and the ensueing losses are greater than the cost of the new contract. Guess who wins???? The result is what we have with the Big 3, corporations that can't compete in the world economy due to legacy comittments and salary concessions. Can you say goodbye to auto manufacturing? It will go off shore as long as the UAW is in control.

2008 Dec 17 05:38 PM

[BUGGS:]

drop dead homer!!!

2008 Dec 20 02:27 PM