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THESYNDROME.COM
News and Politics from a Progressive Perspective
25
Nov
Nice.
Struggling Citibank just sealed a multi-billion-dollar emergency “backstop” deal with the U.S. government. The financial behemoth, suffering with billions in bad mortgage-related assets on its books, recently shed 53,000 workers and saw its stock price lose over half its value. Yet it’s in a 20-year contract to pay the New York Mets $400 million to name the team’s new stadium “Citi Field.”
Glad to see our bailout funds go to a bank that is apparently so threatened, that it can ink a $400 million stadium-naming contract. Apparently, there’s nothing better to spend federal money on than on CITI’s marketing efforts and a higher Mets payroll.
Tags: Assets, Backstop, Bailout, Behemoth, Billions, Citi, Citibank, Federal Money, Marketing Efforts, New York Mets, Payroll, Stock Price
22
Nov
Over on the Hill, the Big Three are getting sternly worded advice about how to approach Congress with a proposal that has a chance of passage, according to the Washington Post:
Earlier today, House Speaker Nancy Pelosi (D-Calif.) said that she and Senate Leader Harry Reid (D-Nev.) will send a letter to the heads of GM, Ford and Chrysler, telling them what they need to show Congress in order to get federal bailout money….
Pelosi said that she wants lawmakers to tell Congress that, if it approves the bailout, Detroit will:
– pay no shareholder dividends,
– give no bonuses to employees making more than $200,000,
– explain how they will invest in advanced technology to make more fuel-efficient vehicles.
Meanwhile, the Obama camp is looking into expedited ways for the companies to restructure, according to Bloomberg:
Nov. 21 (Bloomberg) — President-Elect Barack Obama’s transition team is exploring a swift, prepackaged bankruptcy for automakers as a possible solution to the industry’s financial crisis, according to a person familiar with the matter….
“It creates the environment to deal with GM’s problems but limits government financial commitment,” said bankruptcy lawyer Mark Bane of Ropes & Gray in New York….
In a prepackaged bankruptcy, an automaker would go into court with financing in hand after reaching agreement with lenders, workers and suppliers on what each would give up and on the business plan to be followed. The process might take six to 12 months, compared with two to five years if the automakers followed an ordinary Chapter 11 proceeding and worked out agreements under a judge’s supervision, Bane said.
The Bloomberg article also makes clear that the Bush administration is still pushing the idea of of tapping the $25 billion loan that was set aside to help the industry develop fuel-efficient solutions. Additionally, the UAW is getting involved in discussions as well:
United Auto Workers President Ron Gettelfinger told Bloomberg Television today that he’s “at the bargaining table” to help find ways to cut costs at U.S. carmakers, signaling that the union may be flexible in making concessions to push through an aid package for the auto industry.
Tags: Bailout, Bankruptcy Lawyer, Barack Obama, Bloomberg, Congressional Leaders, Efficient Solutions, Financial Commitment, Fuel Efficient Vehicles, Gm Ford, House Speaker Nancy Pelosi, Mark Bane, More Fuel Efficient Vehicles, Nancy Pelosi, President Elect, President Ron, Senate Leader, Speaker Nancy Pelosi, Transition Team, United Auto Workers, Washington Post
20
Nov
Diarist Johnny Venom is following this minute-by-minute, but the basics are that the auto bailout that looked to have been abandoned earlier today may be back on. But is it back on only to be shot down all over again?
The AP reports that auto state Senators Carl Levin (D-MI), Debbie Stabenow (D-MI) and Kit Bond (R-MO) say they have a bipartisan deal to put a bailout back on the table, with Bloomberg reporting that they’ll unveil it at a 2:30 pm presser.
Procedural and political wrangling surround every step, of course:
White House press secretary Dana Perino on Thursday blamed Reid for not allowing the Republicans’ separate auto-aid plan to come up for a vote.
“Unfortunately it looks like Sen. Reid just wants to pick up his ball and go home for the next two weeks — two months — for vacation,” she said.
Congressional Democrats countered that the Treasury Department already had the power to grant emergency funds to the automakers, but the Bush administration opposed the approach.
So Treasury, which as we’ll recall is now pretty much unbound by any rules or laws whatsoever, could have dealt with this at its leisure. But they didn’t. Why not? What does the White House want?
The White House and congressional Republicans have urged Democrats to support a GOP plan to divert a $25 billion loan program created by Congress in September — designed to help the companies develop more fuel-efficient vehicles — to meet the auto giants’ immediate financial needs.
The “bipartisan” plan?
Do that. Then give ‘em more money.
Sens. Carl Levin, D-Mich., Kit Bond. R-Mo., and George Voinovich, R-Ohio, are trying to broker an alternative that could provide bridge loans or a guarantee that the fuel-efficiency loan fund ultimately would be replenished. Negotiators were discussing a scaled-down aid package of $5 billion to $8 billion to help the automakers survive through year’s end.
But even if the Senate can adopt such a plan today (and who sincerely doubts their ability to accept a White House demand and then add more money onto it?), the House may not stay in town to pick it up when they’re done. So we may see yet another lame duck session in December:
House Majority Leader Steny Hoyer, D-Md., noted that Democratic leaders were planning to gather for an economic conference the week of Dec. 8. “That is available,” Hoyer said. “The year has not ended.”
Tags: Ap Reports, Automakers, Bailout, Bipartisan Plan, Bridge Loans, Carl Levin, Congressional Democrats, Congressional Republicans, Dana Perino, Debbie Stabenow, Emergency Funds, Fuel Efficiency, Fuel Efficient Vehicles, George Voinovich, Gop Plan, Kit Bond, Loan Fund, State Senators, Treasury Department, White House Press
20
Nov
GOP Congressman Zach Wamp (a likely candidate for governor in Tennessee) explains the Republican economic philosophy to Chris Matthews:
- Low wages are a good thing
- The less health care the better
- It’s time to let people learn their lessons the hard way
Wamp didn’t mention one thing: even though he opposes bridge loans to the blue-collar auto industry, he supported the $700 billion bailout for the white-collar financial industry.
Transcript:
WAMP: People go into chapter 11 and out of chapter 11 in this country all the time, that’s what it’s created for.
MATTHEWS: Suppose they’re not any good?
WAMP: Well, if they’re not any good, then competition is going to bring the best cars to the market. Volkswagen just invested in Tennessee, in a right-to-work state, at a low-cost, with less health care. Why should we prop others up, when other companies can compete in this marketplace?
WAMP: …It’s time to let these people learn the lesson the hard way.
Tags: Auto Industry, Bailout, Best Cars, Bridge Loans, Chapter 11, Chris Matthews, Congressman Zach Wamp, Economic Philosophy, Economic Values, Gop, Health Care, Marketplace, People, Right To Work State, Tennessee, Volkswagen, Wages, Zach Wamp
20
Nov
Senate leader calls off vote on auto bailout
Published in News
The Senate’s top Democrat has called off a planned vote this week on a $25 billion auto industry bailout.
Tags: Auto Industry, Bailout, Democrat, Senate Leader, Vote
20
Nov
It’s North vs. South in Big Three bailout fight
Published in News
Should taxpayers in Alabama be asked to help bail out Big Three automakers whose plants are concentrated in Northern states such as Michigan and Ohio? How the auto industry pits North against South.
Tags: Auto Industry, Bailout, Big Three Automakers, Northern States, Pits, Plants, Taxpayers
18
Nov
New House Dems wary on taxes, bailout
Published in News
New House Democrats, especially those elected from Republican-leaning districts, are wary of tax increases and of a taxpayer-funded bailout for the Big Three U.S. automakers.
Tags: Automakers, Bailout, House Democrats, New House, Republican, Tax Increases, Taxes
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