My piece on the UAW and Bush’s stuttering admission that the free market is not, in fact, infallible is up at Global Comment.
But Friday morning, Bush announced a $13.4 billion loan to the auto companies from the TARP funds—better known as the $700 billion bailout. The loans are for a three-year period, but will have to be paid back immediately if the companies do not show themselves to be “viable” by March 31.
Lucky for the auto companies, there’ll be a new president by then.
Bush said, “Government has a responsibility to safeguard the broader health and stability of our economy. If we were to allow the free market to take its course now, it would almost certainly lead to disorderly bankruptcy and liquidation for the automakers.”
I don’t know about you, but I have to smirk at least a bit each time a Republican has to admit that the free market doesn’t always do the right thing. I also giggle each time Bush has to use the word “responsibility.”
While we’ve been watching the Republic Windows and Doors protest, the kind of successful workers’ action we haven’t seen in years, some of us have been reminded of what solidarity actually means. Politicians from Barack Obama to Rod Blagojevich stood up for the workers, and workers around the country demonstrated outside of Bank of America offices and threatened boycotts until the bank gave in and paid the workers their compensation.
Yet the UAW appears to get nothing but scorn from America.
as always, read on.
Mother Jones has 5 alternative plans, just in time for the bailout to fail in the House.
Read this this morning. Some interesting tidbits in there.
Among them:
For the first time, the federal government will limit the compensation of some top corporate executives to $500,000 annually — directly in the case of big banks that participate heavily in the new program and through limits on tax deductions for everyone else. There will be tough restrictions on golden parachutes and clawback provisions for bonuses based on profits that later disappear.
Of course, commie that I am, I think $500,000 is still way too much.
Also:
Finally, the legislation contains several mechanisms for the government to recoup all of its money, and perhaps even turn a profit, by collecting insurance premiums, demanding stock from participating banks and, should all else fail, slapping a new tax on the financial services industry beginning in 2014.
Somehow, I don’t believe that.
I wish I had studied economics more. I wish I had a better suggestion, but let’s face it: our economy is dependent on too many huge corporations that do nothing in essence but shuffle money around. We don’t make things anymore, we’ve got ridiculous trade deficits, we in essence have nothing to offer but bombs and threats.
For all of McCain’s tough talk on Russia and China, the fact remains that we can’t be threatening large countries that own huge chunks of our national debt with much of anything. We can’t bulldoze them into compliance–we can’t even get Iraq and Afghanistan to do what we want.
I think this is the end of US global dominance no matter how we slice it–and that in itself doesn’t bother me. The question is, can we just gently accept that, start to compromise and deal with other countries on a level, or are we going to freak out like spoiled children, provoke or start more wars, and end up collapsing in a bloody heap?
Somehow, I think the answer hinges on this election.
Scary shit, eh?
*Edit: Krugman’s blog.
