Bush thinks bailing out Detroit is a good idea and I smell a rat.

This morning George Bush temporarily suspended his campaign to convince people his presidency was a success.  He took this time to announce a bailout for two of the three automakers.  While the announcement will be hailed with a chorus of cheers from Detroit, it’s clearly a stop gap solution that will leave Obama holding the soon to explode grenade.

The $13.4 billion dollar package is merely a redistribution of the TARP fund that Congress approved to bailout the banking system.  Experts have discussed this as an option for several months but automotive executives wanted their own bailout package which would have less (!) oversight than the TARP package.  The entire loan must be repaid within thirty days if GM and Chrysler can’t prove that they are financially viable by March 31st of 2009.  Thus, Bush leaves office as the good guy who bailed out Detroit and Obama will be the bad guy who will be knocking on their door on at the end of April, asking for the money back.  Brilliant.  This has Karl Rove’s signature all over it, doesn’t it?

It does nothing to resolve the longstanding issues of mismanagement by the automakers and allows no time for them to resolve their issues.  This morning, CNNMoney published a great article that details the issues that won’t be resolved by March 31. (via CNNMoney).  Essentially Detroit’s continual refusal to change their focus away from producing SUV’s and instead focus on small cars and hybrids will inevitably doom them.  Coupled with CEO’s and a union that don’t have any vision for the future, we can expect this story to start again in March.

Shame on everyone involved: Bush for providing false hope without reasonable mechanisms for change, the automakers for having the audacity to ask for a bailout without any promise to change and the media for failing to cast blame where it belongs, instead hailing today as a great day for Detroit.


~ by toddc2001 on December 19, 2008.

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