Let's face it. Other than tax cuts, GW Bush has been terrible on economic issues, especially spending. Now he advocates throwing good money after bad with a $25 Billion loan to the Big Three. That's Our money folks.
AP- The White House on Friday threw its support behind a plan to speed release of $25 billion in existing loans to the Big Three automakers but rejected a Democratic proposal to use money from a financial bailout to help the troubled industry
The private sector wont put their money behind these losers for good reason. Their antiquated union contracts make them structurally uncompetitive. Unless a top to bottom restructuring of US automakers is included as a requirement of these loans then all we're doing is delaying the inevitable.
Government bailouts by definition are fraught with moral hazards which in this case has to do with purely political considerations rather than good business sense. This insanity is about preserving the status-quo of unsustainable union contracts. It's also about fear of paying the price of failure that must go hand in hand with success in a free market economy.
The unions have bought off the Democrats in this regard but Republicans shouldn't go along. Bankruptcy will force these companies to re-organize in a more efficient and competitive manner or have their assets sold to better run companies.
Let the private market decide what to do with these private companies. We will all be better off and the taxpayers wont pay the bill to prop up those that deserve and need to fail.
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