Commentary Magazine


Bailout Mania Screeches To A Halt

It seems that the alternative mode of transportation taken by the Big Three CEO’s to Washington D.C. didn’t deliver a different result. At least not now. It appears that the public has had it and Congress is intensely “skeptical” — the new favorite term for “not going to explain to the folks back home why taxpayers should throw more money down a rathole” — about a bailout. This report suggests that, despite their expressed fondness for the car industry, Democrats aren’t much moved to do anything:

Many Democrats, despite the support of party leaders, remain ambivalent. And across the board, sharp disagreements exist over the source of taxpayer funding for any rescue, how much would be committed and under what terms.

Asked Wednesday about Detroit’s appeals for aid, Mr. Obama dodged, saying he would watch the hearings before deciding what assistance is warranted. Transition officials say they see no advantage in shaping legislation that Democrats hope to complete before the Jan. 20 inauguration.

After his electoral triumph, Mr. Obama tapped Michigan Gov. Jennifer Granholm and former Michigan Rep. David Bonior for his economic advisory panel, saying the auto industry is the backbone of U.S. manufacturing.

Ms. Granholm and Mr. Bonior were to be Detroit’s contacts with the Obama transition. Yet people familiar with the matter say that beyond some e-mail discussions and conference calls, their input hasn’t been sought.

You can attribute it to the “power vacuum,” or you can blame the car companies poor PR. But at bottom, the notion of providing billions and billions — maybe as much as $125 billion would be needed — to failing companies with little hope of salvation (as least two of the three) simply isn’t palatable. Sometimes an idea is too dumb, even for Congress.

Next up is the House hearings. We’ll see if the CEO’s do any better there.

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