The Big Three may get a ‘car czar’ as the condition of a staying-alive loan, but they’ve failed to access the official bailout action (‘Asset Recovery’) program. Still, General Motors’ finance arm, GMAC, might. GE Capital got $139 million in guarantees from the FDIC. Then there’s Citibank. Now auto-loan financers, credit card issuers (AMEX), auto-parts suppliers, Avis rentals, student loan financiers, and state and local governments (big cities especially) are queuing up as well. Is it any wonder companies are forming bailout breadlines, extending their palms for taxpayer largesse awarded with zero discretion and unintelligible standards?
These bailouts have all the earmarks of capitalist excess, made stratospheric by the invocation of state power. It’s bad enough to ‘gamble’ Uncle Harry’s retirement on bundles of mortgage-backed securities, it’s quite another to put the credit of the U.S. government at risk–not just picking winners and losers in the financial turbulence, but doing so with no market discipline, little knowledge of pricing, and no clue what the industries of the future will be.
—-George A. Pieler and Jens F. Laurson. I wonder how long it will take before we gain some sanity and perspective on these issues.