In an ongoing series of bailout related news, I am taking the whos of the previous question one further and to wonder what is different between the financial sector and the auto secter.
The media has started to pick up on this story and wonder about it, but I don’t know that it is breaking through, so here it is: why do financial institutions get free cash in amounts of hundreds of billions of dollars and the Big Three Automakers have asked for a few billion in loans, Congress suddenly needs for them to account for every penny and plead their case. When Chicken Littles at Bear Stearns and AIG say that the sky is falling, Congress can’t act fast enough and can’t be saddled with demands for financial scrutiny. But when GM and Ford appear before Congress, hat-in-hand, they say “come back in a couple of weeks when you’ve got your s--- together.”
Another double standard? AIG spent tons on a spa, and Citi, after its $25 billion from Congress, turned around and spent $400 million of that to name the NY Mets’ new ballpark. When the head of GM flew to Washington in his private jet, he was berated as “out of touch”. He needed to make a show of it with his return to Washington in a Chevy Malibu. The hat-in-hand wasn’t good enough, eh?
Rachel Maddow astutely pointed out the real difference between giving $700 BILLION (so big it needs caps) to Wall Street and lending $25 billion to Detroit is just that: Wall Street versus Detroit. The sums and conditions are just icing on the cake. Because Wall Street provides us with a few white collar jobs, these institutions are too big to fail, while Detroit provides us with many blue collar jobs, so they can freely hang out on the chopping block. Regardless of whether these institutions really need our money and regardless of their mistakes, the difference between what happens when these industries fail can never come to the table because Still Pres. Bush and Congress have taken the credit industry out of the discussion. They’ve given a free pass to all of the bad actors, and pig-headed executives while leaving Detroit out to dry. This is really what they think about the so-called Middle Class.
And as they flush it down the toilet, communities that have driven the entire country’s economy and saved us during WWII are to be flushed right down with it. If the Democrats aren’t careful, they just might irrevocably alienate the Midwest the way they did with the Civil Rights Act.