12:24 AM
Let me get this straight: Banks get a $700 billion bailout with free money, and not only does the economy go further into the dumper, but nobody can even tell us where our money went. Not the banks, not our illustrious elected officials (the ones who tripped all over themselves forking over our dough)--nobody.
Meanwhile, the Detroit Three automakers beg and plead for loans, and the moment the money lands in their accounts, they put it to work for their customers, the American public.
I hope Congress learns a valuable lesson here, though I have almost zero faith that Washington does anything, let alone being capable of learning anything.
This contrast of business practices blew my mind. On Tuesday, General Motors' financial arm, GMAC, got $6 billion from the U.S. Treasury, and by Tuesday afternoon--Tuesday afternoon!--it was making credit available to more customers so they could buy cars and trucks and thereby help reignite the sputtering U.S. economy.
As this goes on, Wall Street sits on its hundreds of billions of dollars and does abso-freaking-lutely nothing to ease the housing crisis or get credit flowing in any way, shape or form. Oh, wait. The banks have spent this gilt gift to buy up other banks to show profits to shareholders so they can "justify" end-of-year bonuses.
See differences here?
The economy won't even begin to sniff a turnaround unless banks ease credit and lend money--and do it pronto. A radio report this morning predicted that nationally in 2009, we will be worse off in terms of home sales than in the putrid 2008. Ya gotta love those analysts, don't ya? So automakers can't plan for any kind of 14 million, 15 million, 16 million sales market in '09; they will be fortunate to hit 11 million. We will likely see factories shut down in the first quarter while furious negotiations take place between automakers and the United Auto Workers to get total compensation in line with that of Washington's beloved transplants.
Last time I looked, I didn't notice that it was the UAW causing banks to freeze credit. Riddle me this: How can such a thing as consumer confidence exist if the consumer has no confidence in his ability to borrow?
I predict that Washington will continue to sit and twiddle its thumbs for the coming session. That is what it does best. Oh, there will be plenty of "hearings," no doubt, tons of "debate." But it's too late--the government's fingers are too deep in the Detroit Three's pie. So when the dust settles, the automakers will remain the scapegoats, at least until they agree to build the next great Nancy Pelosi-designed, Sierra Club-approved Hempmobiles.
You know, the cars we all want.
