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Status: The Big Three Auto Bailout

December 7, 2008

the-big-three-auto1There are reports surfacing that although Congress and the White House are trying to make a short term loan/bailout ($15-$17 million) for the big three auto industries there is opposition coming from the house of the senate (more on that later).

Seeking to end a weeks-long stalemate between the Bush administration and House Speaker Nancy Pelosi, senior Congressional aides said that the money would most likely come from $25 billion in federally subsidized loans intended for developing fuel-efficient cars.

There is also news regarding another snag in the progress.  Both the DNC and the GOP would like to appoint a czar to oversee the big 3 to ensure restructuring is done as per the agreement.  As could be expected the in fighting over who it should be, what they should do, blah, blah, blah has begun.

Sen. Carl Levin (D-Mich.), a leading ally of the Big Three on Capitol Hill, predicted there will be an agreement “in 24 hours,” but he would not predict whether it would get Senate approval.

“I think they’re very close to a deal, I think there will be a deal and that will happen in 24 hours,” Levin told host Chris Wallace. “Obviously, that’s a much more complicated question of whether the votes are there. What I’m confident of is that a bill will be introduced.”

shelby_2However, on Fox News Sunday with Chris Wallace, Senator Richard Shelby has announced that he will filibuster any bailout for the auto industry that comes to the senate floor next week.

“This is a down payment on many billions to come,” Shelby warned. “This is not something that happened overnight. This is 30 years in the making. These companies basically have failed or are failing. They probably need, according to some people, about 60 percent of the management to go, and about 40 percent downsize of the workers.”

Shelby added: “We would like to save them, but they’ve got to save themselves, but I don’t believe they’re willing to save themselves because they could be restructured the right way and they’re not willing to do that.”

Shelby said he would like to see an “extended debate” on any bailout package that reaches the Senate floor, but did not know if there was enough support to sustain one.

I wonder if Shelby will try to top J. Strom Thurmonds all time filibuster record (over 24 hours) to make his point?  I digress, usually when someone protest too much there, some times, is a reason to check out the fuss.  Surprise, surprise Shelby has not been forth coming with his interest in the 3 big auto companies failing.

… to point out the hypocrisy of your position as it relates to Alabama’s (the state for which you have served as senator since 1987) recent history of providing subsidies to manufacturing.  During the segment on “Meet the Press,” you stated that:

We don’t need government — governmental subsidies for manufacturing in this country.  It’s the French model, it’s the wrong road.  We will pay for it.  The average American taxpayer is going to pay dearly for this, if I’m not wrong.

I trust it is safe to say that when you refer to “government subsidies,” you are referring to subsidies provided by both federal and state governments.  And if this is in fact true, then I am sure you were adamantly against the State of Alabama offering lucrative incentives (in essence, subsidies) to Mercedes Benz in the early 1990s to lure the German automobile manufacturer to the State.  As it turned out, Alabama offered a stunning $253 million incentive package to Mercedes.  Additionally, the state also offered to train the workers, clear and improve the site, upgrade utilities, and buy 2,500 Mercedes Benz vehicles.  All told, it is estimated that the incentive package totaled anywhere from $153,000 to $220,000 per created job. On top of all this, the state gave the foreign automaker a large parcel of land worth between $250 and $300 million, which was coincidentally how much the company expected to invest in building the plant.

It seems Shelby has a double standard.  If he was outraged over Alabama using tax payers money, he certainly kept it quite.  It now has become hard to understanding Shelby’s point.  Is it good to use tax payers money when it benefit your state?  Or, is it about not using tax payers money for Mercedes competitor?  His protest seems to be out of proportion with his own state’s actions.  Just what is the message Shelby is really sending?  Sorry Shelby but you need to be put out to pasture.  Some one who does not have duplicity needs to step up and make this argument, if it is a justifiable argument.

In our current state of collapse,  Shelby can only be perceived one of two ways,  part of the problem or part of the solution.  Right now Shelby appears to be part of the problem and it leaves the thoughts that he is practicing the same old tired politics that got us into this mess.

Such aid would save millions of jobs and millions of dollars in lost tax revenue.  Additionally, unlike the giveaways Alabama bestowed upon the foreign automaker in question, United States taxpayers would be reimbursed with interest (as they were when Chrysler received government aid in the early 1980s) for their investment in what is clearly a critically important industry for America’s present and future.

Enough said.

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