Posted by
Always To The Right on Thursday, November 20, 2008 6:13:11 PM
Perhaps not so much of a bailout compromise but a retreat by Democrats.
Instead of coughing up an additional $25 billion in loans, the
bipartisan group of Senators will propose that the $25 billion in
energy restructuring loans get used instead for bridge loans to get the
Big Three past their current cash crisis
Democrats had insisted that the restructuring loans had to stay in
place so that Detroit could start producing more energy-efficient
vehicles. Republicans had refused to give more money than the
already-exorbitant funds authorized just two months ago that had not
yet been spent. Apparently, Republicans got the better of this
argument, although it will probably eventually turn into a separate
bailout with commitments to replenish the energy-restructuring fund
when Barack Obama takes office.
The cure for government distortion doesn’t appear to be the hair of
the dog, especially not with the current or future crew in charge. We
tried that with the collapse of mortgage-backed securities from the
Fannie/Freddie meltdown, and Hank Paulson now won’t even address the toxic assets in his new plans.
I don’t disagree that government distortion made life unnecessarily
difficult for the Big Three, but CAFE standards alone didn’t cause
their competitive disadvantage. Toyota and Honda don’t outsell the Big
Three with less-efficient vehicles. McCotter’s argument sounds like a
great reason to stop further government intervention, not to create even more of it.