Citing danger to the national economy, President Bush approved an emergency bailout of the U.S. auto industry Friday, offering $17.4 billion in rescue loans in exchange for tough concessions from the deeply troubled carmakers and their workers.
The money will be coming from the Troubled Asset Relief Program. You know, the one that was supposed to bail out Wall Street. This irked Robert Reich who wrote a post on the trouble this decision represents.
GM and Chrysler say they desperately need money to avoid bankruptcy in the next few weeks. Treasury Secretary Hank Paulson now says the Big Three "will get the money as quickly as we can prudently do it."
But didn't Congress just vote down that money?
Under our Constitution, Congress is in charge of appropriating taxpayer money. If Congress explicitly decides not to appropriate it for a certain purpose, where does the White House get the right to do so anyway by pulling the money out of another bag?
If TARP is a slush fund, everything's arbitrary. We're no longer a nation of laws; we're a nation of Treasury and White House officials with hundreds of billions of dollars of taxpayer money to dispense as they see fit.
It's certainly not surprising that Bush would defy the will of another branch of government and plow ahead with his plan; but it's doubly sad to see Congress once again abdicate its responsibility as it has done for the past several years. Reich is in favor of helping the automakers but finds that Bush's actions here circumvent democracy. I don't suppose that Congress can actually do much but it sounds like they didn't create TARP with any safeguards to prevent this kind of thing and ensure that the money went where it was supposed to go.
$8.5 trillion has been committed to get our economy going again (not spent, mind you). That's the equivalent of having every single human being on this planet cough up nearly $1,270. And many details of the bailouts are shrouded in secrecy with taxpayers getting redacted paperwork for their troubles.
Personally, I feel like I'm caught in the middle of an internecine struggle among various elites. Bush is going to divert money meant for Wall Street to Detroit; Wall Street banks continue to pay dividends to shareholders that "will consume 52 percent of the Treasury's investment over the initial three-year term." (No wonder the credit markets are still frozen – most of the bailout money is going to shareholders.); the Treasury Department has apparently illegally allowed banks to buy other banks so they can pay less taxes. It seems like industries are competing for government favors and money while the rest of America waits for relief to trickle down as homes and jobs are lost.
(By Tab, The Calgary Sun)
No comments:
Post a Comment