Thursday, November 13, 2008

Will Bush Destroy The Country?

I know what you're thinking. Hasn't he already? Embroiled in a costly and stagnant war, with our economy on life support and a major city still as mangled as the day it was hit by a hurricane, our country is in deep trouble. But, sadly, it could get worse, and there's a good chance that president Bush will make it so, despite his limited time remaining in office.

Lost amid the hubbub over Obama's cabinet appointments has been a call by Obama and his newly-selected chief of staff, Rahm Emmanuel, for Bush to authorize a bailout plan for the auto industry. Bush has already helped out his pals on Wall Street, but so far, he's seemed reluctant to help an industry that is just as integral to the American economy's success. With unemployment already at a level not seen since just after 9/11, the economy cannot afford more job losses.

Time magazine reports:
It's now clear that GM can't survive as an ongoing entity without massive federal assistance. The company is burning through more than $2 billion each month. It has $16 billion left. As if they were aboard a dirigible losing altitude, GM's bosses have been frantically throwing all manner of stuff overboard — retiree health-care benefits, people, assets, new car design — to conserve $5 billion. That will get it through the year.
The system — the domestic auto plants and their interconnected group of suppliers — is far bigger than GM. It includes 54 North American manufacturing plants and at least 4,000 so-called Tier 1 suppliers — firms that feed parts and subassemblies directly to those plants. That includes mom-and-pop outfits but also a dozen or so large companies such as Lear, Johnson Controls and GM's former captive Delphi. Beyond those are thousands of the suppliers' suppliers.

Although the Detroit Three directly employed about 240,000 people last year, according to the industry-allied Center for Automotive Research (CAR) in Ann Arbor, Mich., the multiplier effect is large, which is typical in manufacturing. Throw in the partsmakers and other suppliers, and you have an additional 974,000 jobs. Together, says CAR, these 1.2 million workers spend enough to keep 1.7 million more people employed. That gets you to 2.9 million jobs tied to the Detroit Three... Shut down Detroit, and the national unemployment rate heads toward 10% in a hurry.
We saw what happened when the government chose to let one big banking firm, Lehman Brothers, fail. The entire financial community fell down with it. Now it seems Bush is content to do the same with the auto industry. Except the workers laid off by this collapse won't be as well off as those let go by Wall Street.
So far, the President has offered only to speed through Congress an already approved $25 billion loan to help Detroit create new fuel-efficient models. But GM needs an additional $10 billion simply to pay its bills next year and $15 billion more to close plants, compensate redundant workers and dump some of its lesser-performing brands.
Bush was apparently angry that details of his conversation with Barack Obama were released to the press. One of those details was that Obama had urged him to support an auto-industy bailout. Of course, Bush had other ideas in mind...
The president stressed that his main priority for any postelection action out of Congress is approval of a long-stalled free trade agreement with Colombia. -Jennifer Loven, AP White House Correspondent
Yes, Bush is worried about Columbia, while Rome burns.

It may just be the cynic in me, but it seems to me that the Republicans have little to gain by supporting a bailout of the auto industry. They already took heat in this year's election for supporting the bailout of Wall Street. And by allowing GM and others to go under, they assure that Barack Obama begins his first year as President in a very, very deep hole that's nearly impossible to climb out from. By doing nothing, the Republicans can let Obama and a Democratic congress take the heat for a dead economy in the next election. Meanwhile, if they do approve a bailout and it fails, then the Republican base, already pissed at large government spending, will have all the incentive they need to vote their incumbents out of office.

Already, the Republicans are showing signs that they could care less about 2.9 million jobs.
AP - House Republican leader John Boehner of Ohio said Thursday he would oppose an auto industry bailout. "Spending billions of additional federal tax dollars with no promises to reform the root causes crippling automakers' competitiveness around the world is neither fair to taxpayers nor sound fiscal policy," Boehner said.
If Bush uses his veto power to kill a bailout bill, it's hard not to figure he's doing so in order to deliberately hurt the country for the immediate future, creating a toxic environment for the next party in charge.

Given what we've seen so far, I can't say I'd be surprised.

1 comment:

Hot Mama said...

A very chilling scenario! I guess George W is past caring how he will be remembered in history.

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