Dec 18 2008
Video: Ron Paul on Alex Jones show
Archive for December 18th, 2008
Dec 18 2008
Bush calls for an “orderly bankruptcy” for Big Three
President Bush called for an “orderly collapse” as a solution to dealing with the Big Three, citing that he didn’t want to leave a mess for president-elect Barack Obama on January 20th.
Sorry, that last part made me chuckle a bit.
“Under normal circumstances, no question bankruptcy court is the best way to work through credit and debt and restructuring,” Bush said during a speech and question-and-answer session at the American Enterprise Institute, a conservative Washington think tank. “These aren’t normal circumstances. That’s the problem.”
The White House still hasn’t overruled using the T.A.R.P. funds (700 billion dollar bailout funds) as a solution either, however it’s becoming increasingly obvious that the administration is in no rush to use those funds to help the Big Three out. Chrysler announced it was shutting down all of its North American plants for a month, two weeks ahead of schedule, earlier this week in an effort to stay afloat as long as possible. Chrysler executives estimate it could be a matter of weeks before they go under if relief does not come.
GM and Ford aren’t in much of a better situation. Stocks for the companies plummeted on the White House announcement. None of the Big Three nor the UAW like the idea of government-assisted bankruptcy. I can’t blame them here either, they are fighting for their jobs and millions of other Americans as well.
“We continue to work with the administration to find a solution to this liquidity crisis,” said GM spokesman Tony Cervone.
Talks between the Big Three and the administration are not described as negotiations but instead as information gathering. I think it’s high time they turn into negotiations. I’m not sure why the administration is taking so long to act on this. There are two possibilities that come to mind for me.
One, the administration is waiting to get an ownership stake in the companies - much like what they did in the financial sector bailout. Talk of bankruptcy could be a way to get the Big Three to make some more concessions in order to receive funding.
The second, and more gruesome one, is that the administration feels that the situation is so bad that at least one of the companies has to go under. If this is the case, it would most likely be Chrysler, as they are in the worst position and also have been reportedly hesitant to make any concessions to receive a bailout.
