GM, Ford Bailout Push is Coming

Pete Davis from the Capital Gains and Games blog thinks help from Washington may be on the way:

Washington is in a bailout mode following the Fed's bailout of Bear Stearns on March 14 and the Treasury's standby authority to bailout Fannie Mae and Freddie Mac, codified in H.R.3221 enacted on July 30. Is the auto industry next? ...On July 30, Senate Democrats agreed to take up a $6 b. loan guarantee for the auto industry when they return in September. There are several problems with such an action: 1) It won't work; 2) It would be costly to taxpayers; 3) It would bailout one foreign owner and disadvantage others; 4) It would impede the restructuring of the auto industry; and 5) It would only the delay the firing of Big Three auto workers for a short time.... Senator Debbie Stabenow (D-MI) has made it very clear that she see's the $6 b. loan guarantee as the first tranche of $25 b. of loan guarantees sought by Detroit's Big Three auto makers. The $6 b. will be scored by the Congressional Budget Office as costing taxpayers $900m.

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