Family Feud?
Rep. Barney Frank is fuming because Barack Obama has not provided lawmakers with more guidance about the auto bailout.
"At a time of great crisis with mortgage foreclosures and autos, he says we only have one president at a time," Frank said Thursday, according to the Associated Press. "I'm afraid that overstates the number of presidents we have. He's got to remedy that situation."
Over the course of the transition, Obama has said repeatedly that the nation has just one president at a time. Some clearly see his stance as an effort not to step on President Bush's toes in the waning days of his term; others, however, are expressing private concern, which Frank voiced publicly, that Obama must at least address the specifics of any auto bailout proposal, the ramifications of which will be felt well into his administration. Members of Congress, torn over the merits of bailing out the BIg Three automakers, are looking for back-up.
Asked about Frank's remarks on MSNBC this morning, Sen. Jon Tester (D-MT) said Obama has done a "great job in this transition."
"But make no mistake about it," he cautioned, "the inauguration is over a month away."
A transition source tells On Call that the administration-to-be hasn't given a firm position on the auto bailout, offering this written statement:
"It's encouraging that the companies are coming forward with their business plans. Congress needs to evaluate these plans and hear from these companies directly. Once that process is complete, next steps will be determined. As the President-elect has repeatedly said, the government should provide assistance to the auto industry if all the constituents are willing to make the tough choices necessary to achieve long-term success."
Not exactly firm. Politically, of course, there is not much for Obama to gain in gambling with the auto bailout. The public is experiencing bailout fatigue and feels little sympathy for the American auto industry, which continues to develop and push gas guzzling SUVs above environmentally friendly vehicles, even as fuel prices have skyrocketed. On the heels of a $700B congressional bailout package, there is a growing public skepticism that the promise of one bailout after another doesn't appear to be steadying a flagging economy.
Meanwhile, more bad economic news greeted the next president this morning in the form of higher unemployment, which rose to 6.7% last month.
"The 533,000 jobs lost last month, the worst job loss in 34 years, is more than a dramatic reflection of the growing economic crisis we face," Obama said in a statement released by the transition. "Each of those lost jobs represents a personal crisis for a family somewhere in America. Our economy has already lost nearly 2 million jobs during this recession, which is why we need an Economic Recovery Plan that will save or create at least 2.5 million more jobs over two years while we act decisively to maintain the flows of credit on which so many American families and American businesses depend.
"There are no quick or easy fixes to this crisis, which has been many years in the making, and it's likely to get worse before it gets better. But now is the time to respond with urgent resolve to put people back to work and get our economy moving again. At the same time, this painful crisis also provides us with an opportunity to transform our economy to improve the lives of ordinary people by rebuilding roads and modernizing schools for our children, investing in clean energy solutions to break our dependence on imported oil, and making an early down payment on the long-term reforms that will grow and strengthen our economy for all Americans for years to come."
The last thing Obama needs in weighing the best course forward for the economy is internal Democratic Party strife.
(JENNIFER SKALKA)
A structured/conditional sale with government's help as the broker of GM, F, and Crysler to Toyota, Honda and Nissan is the solution.
The jobs stay here. All UAW workers get the same wages and benefits as transplant workers.
The companies are run by people who actually know how to build and sell cars.
The equity and debtholders get at least some pennies on the dollar.
Case closed.
Frank is wrong here, and showing poor judgment. We need an orderly transition, and if Obama were to follow this advice, we would not have one. Besides, what good does it do to shoot off your mouth when you do not yet have real power? It just weakens your position. And IvanT above is showing more intelligence than anyone in Detroit or Washington D.C. The Big Three have demonstrated their incompetence again and again. Toyota, Honda, and Nissan have demonstrated their competence. It's a win/win. But that would take more innovation and imagination than anyone in Washington has shown yet. Eventually, those manufacturers would have to become more absorbed into the industrial security structure of the U.S. if they were to take this on, but that could be managed--by competent leadership.
Of course Frank is wrong about saying Obama needs to do something for the auto industries. Obama is not the president and even if he was, it's not the job of the President of the United States to bail out private companies. Obama, however, is working furiously behind the scene to try to convince lawmakers to bail them out because he needs to pay the union bosses back. He can not afford to have these auto companies go into bankruptcy, not because it will cause a lot of jobs (it won't, bankruptcy allows the companies to continue to do business while holding creditors at bay.) The real reason is because bankruptcy will allow the car companies to void the insanely lucrative deals the United Autoworker Union has with the big 3 auto companies. These lucrative pension and healthcare benefits for retirees and reserve workers who're not even working at all, are the main reason the big 3 can't compete with the Japanese car companies. This is nothing but a payoff to the unions, nothing more. They better not be paying off these unions with my tax dollars.
I agree with Ivan T. The foreign automakers in the 1970's took on importing their autos into our markets. They realized years ago in order to get a market share they had to produce a quality product. They accomplished that and the big 3 ignored the thought of building quality products for another 20 years. The Big 3 complained and higher import taxes were levied on these successfull manufactures to offset the poor quality of American made autos. They still are doing very well, the American workers in these plants are happy, earn a decent wage and are not controlled by the UAW.
The bottom line here is simple. 61% of the American taxpayers say no to a bailout, what doesn't congress understand?
A Bankruptcy is the only option for the Big 3. Why would we want to hand over 34B when the inevitable will result in a Bankruptcy by the end of 2009 for 2 of the 3 anyway. Don't waste the 34B now, we will end up absorbing the restructured debt why add more to the pile.