Could It Be Bailout Envy?

Compare the auto industry perspective, as depicted in this cartoon (click to enlarge) by Steve Sack of the Minneapolis Star Tribune, with the border collie pictured in the post about dogs feeling “envy” from a few days ago. And even though the automakers eventually got their last-second rescue deal (this past Friday as the Chrysler plants were shutting down for at least a month), I know the Detroit community still holds a lot of ill will toward the Washington policymakers who they say clearly played favorites and held double standards in their dealings with financial companies like AIG (AIG) compared with their handling of the auto industry.

It is true that the Detroit auto industry’s $13.4 billion is just a fraction of the $85 billion that AIG received, justifying some of the envy. But it’s also true that one of the most vocal opponents to the automakers’ rescue, Senator Richard Shelby (R-AL), also had a lot to complain about when the AIG bailout went through back in September (emphasis added):

A spokesman for Sen. Richard Shelby of Alabama, the top Republican on the committee, said the senator “profoundly disagrees with the decision to use taxpayer dollars to bail out a private company” [(AIG)] and is upset the government has sent an inconsistent message to the markets by bailing out AIG after it just refused to save investment bank Lehman Brothers (LEHMQ.PK) from bankruptcy.

“The American taxpayer should not be asked to unwillingly assume the inordinate risks that financial experts knowingly undertook, particularly when taxpayer exposure is increased by the ad hoc manner in which these bailouts have been engineered,” said Shelby’s aide, Jonathan Graffeo.

Now, I’m not one to defend the behavior of Republican members of Congress (or that of many Democrats, for that matter), but it does seem that Senator Shelby has been somewhat consistent in that he hasn’t really been fond of any of these government rescues, because he (consistently) opposes big government. And if there’s one thing for certain, it’s that government keeps getting (necessarily) bigger and bigger.

Comments

[podindet:]

Good article, as usual Detroit gets second class status.

2008 Dec 21 12:28 PM

[fedphucksfr...:]

Rescind the wasteful, criminally negligent TARP, and put an end to government bailouts of private enterprise.
We have a taxpayer-funded court system to settle disputes and adjudicate fairness in matters related to business failures, and we have a plethora of government agencies and programs already in place to help people in times of economic downturn; PBGC, FDIC, SIPC, unemployment insurance, etc.(none of which, I might add, were in existence at the time of the Great Depression). Let's fully fund and use these resources, and allow the free markets which we've been urging on the rest of the world for generations to operate.

2008 Dec 21 12:56 PM

[UseMyFedTax...:]

The issue of Job Envy has motivated many state and local governments to incentivize auto manufacturers to build plants. This has lead to a significant overcapacity in the US.
It should not go unnoticed that Senator Bob Corker, as mayor of Chattanooga, probably played a significant role in marshalling over $0.5 Billion Dollars in incentives to have a foreign automaker, VW, build a plant in Chattanooga – all in the name of 2000 plus automaker jobs in Tennessee.

Check out this video:
www.youtube.com/watch?...

It should also not go unnoticed that Senator Richard Shelby has been instrumental in marshalling at least as much as Corker has to build foreign auto plants in Alabama – all in the name of jobs.

Other videos of interest:
www.youtube.com/watch?...
www.youtube.com/watch?...
www.youtube.com/watch?...
www.youtube.com/watch?...

2008 Dec 21 01:05 PM