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Blog of Mass Destruction

GOP Won't Help Carmakers

By The Reverend Published: December 11, 2008

On October 1, 2008, just a little over 2 months ago, Senate Republicans joined Senate Democrats in passing a bailout bill for the financial industry. The Senate vote was 74-25. Treasury Secretary Hank Paulson called the vote a "strong bipartisan vote."

Paulson also said this about the Senate vote....

"This sends a positive signal that we stand ready to protect the U.S. economy by making sure that Americans have access to the credit that is needed to create jobs and keep businesses going." Link

How would the money be used in the bailout?....

It would enable the government to spend billions of dollars to buy bad mortgage-related securities and other devalued assets held by troubled financial institutions.

That was over two months ago. Now we know that the $700 BILLION dedicated for the financial industry by Congress has been used by financial institutions to only strengthen themselves, not to buy back those "toxic" mortgage backed securities.....

Instead of buying up the banks' toxic mortgage debts, as first proposed under the deal, the bail-out fund is being used to buy shares in banks to help boost their balance sheets. Link

Now, bankruptcies on mortgages are predicted to be one out of every seven mortgage payers over the next couple of years.....even though $24 BILLION is all it would take to prevent such a huge ratio...

In a disagreement with the White House, Federal Deposit Insurance Corp chairman Sheila Bair, told the committee that $24bn of the bail-out money should be used to help householders.

Moral of the story thus far? If publicly held banking institutions cry wolf, no amount of bipartisan bailout money is too obvious bait and switch use of the money accountability or oversight required. Financial institutions, the very folks who created the collapse through criminal money schemes, don't have to do what they told us they would do.....loosen credit, shore-up mortgage bankruptcies....none of it. Still to this very day.....there has been NO oversight of the $700 BILLION.

Which brings me to the automakers situation.

GM and Chrysler have requested $14 BILLION in bridge loans to prevent bankruptcy. The credit crisis, created by the financial industry, is the primary reason why these automakers' financial situation has deteriorated so quickly. The failure of these two carmakers could mean a couple million more lost jobs. The ripple effect misery would be difficult to calculate...especially now.

Now consider: Automakers are asking for a LOAN, not a handout. The LOAN amount is only 2% of the amount passed to bailout the financial industry. This 2%-of-banking-bailout-money, unlike the bait and switch plan for the banks, would go directly to saving some 2 million jobs.

Now read this....

Mr. Voinovich(R-Sen-OH) said that Senate Republicans had refused to participate in negotiations with the White House because of general opposition to an auto bailout.

“The leadership did not want to participate because they felt whatever came out of the negotiations, they probably wouldn’t support,” Mr. Voinovich said. He said he still intended to vote for the plan.


Senator Richard C. Shelby of Alabama, the senior Republican on the banking committee, called the proposal “a travesty” and said that he would filibuster the bill.


Senator Bob Corker, Republican of Tennessee, who was working to draft alternative legislation, said the proposal put forward by the White House and Congressional Democrats provided only weak authority for the car czar, who would supervise the sweeping reorganization plans that the automakers have agreed to carry out..... he said, the legislation was unlikely to win passage in the Senate. Link

Voinovich is up for re-election in 2010,......Ohio is an automaker and auto parts his comments are understandable. But how can other GOP Senators, many of whom voted to handout 50 times as many tax dollars for a self-induced collapse of banking institutions....and without oversight or accountability....and which has been an ongoing bait and switch activity since it's be so self-righteously obstructive of a $14 BILLION loan to save millions of jobs during a mini-depression?

If there was ever a doubt about the accusation that Republicans are the political party of the most powerful monied interests in America, if there was ever a doubt about the criticism of Republicans being against the interests of working Americans.....this automaker deal should clear those doubts right up.



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