« Urban legend update: the 2008 election, republican decay and Hamline's Joe Olson | Main | Olson urban legend update #2: Hamline responds »

December 11, 2008


Can we say that the Auto Bailout bill was passed on a bi-partisan vote … after all there were 32 Republican crossovers and 20 Democrat crossovers. No doubt, many Representatives just voted based on party leadership instruction, but the crossovers defied the leadership and voted either on the legislation’s merits or the impact in their home district. I think Pete Stark (D-CA) and Minnesota’s Colin Peterson and Tim Walz voted on their philosophy of government as all three voted against the Alternative Minimum Tax legislation as well as October’s bailout of the financial industry. Voting in a fiscal responsible manner has been a hallmark for these three.

Time will tell whether the Democrats that voted against the Auto Bailout were right, but it’s not to early to tell that the $700B TARP Bailout is not working … just listen to any of the hearings that Barney Frank has held … including yesterday where Republicans and Democrats attacked the Treasury leadership.
They were right on TARP. It has solved nothing and actually has set-up tax breaks for banks. (PNC Bank is entitled to a $5.5 billion tax break in acquiring National City that is almost equal to National City’s purchase price, and will also get National City’s share of $7.7 billion in bailout money. Wells Fargo acquisition of Wachovia would have the same effect. See also Capital One acquisition of Chevy Chase Bank.)
And like the TARP legislation, the Auto Bailout has provisions involving IRS section 382 whereby the federal government would serve as the guarantor in Sale-in-Lease-out (SILO) tax shelters … and who benefits from this … yep, banks !

The TARP legislation essentially created a “CreditCrisisCzar” in the form of the Paulson … do we really want a “Car Czar” … haven’t we learned the lessons when Jerry Bremer was given all the power as Iraq’s Czar? And Senate Republicans, like Norm Coleman, are concerned that the Car Czar doesn’t have enough power.

That’s two good reasons why the list above deserves credit (and why I voted for Tim Walz).

Should tax dollars be used to save the Auto Industry, or improve the economy? Although, Americans have concerns for Detroit operations, I have more concerns for operations that support the auto industry. How will any of that money maintain lower tier businesses? A massive infrastructure program makes sense … providing money for two car makers does not. What would it take for you to buy a new car now (ignore the question if it’s a Big-Three vehicle) … unless Congress enacts tax cuts to promote vehicle purchases, the Big-Three will just bide time. The monies would be better spent by providing the states with monies for unemployment benefits and food programs … since the lower tier companies will have workforce reductions. Long term, the Big-Three is suffering from retirement and medical programs … that is something that this Bailout will not address … but something the 111th Congress must.

The comments to this entry are closed.

Twitter Updates

    follow me on Twitter

    MN Aggregators