Contrast: Wall Street Bailout, Auto Industry Bailout
More Focus is on the Auto Industry Bailout, but the Wall Street Bailout Will Emerge
Senators on Wednesday took turns speaking about the auto industry. Republican Senator Richard Shelby of Alabama and some of his peers vowed a filibuster if Democrats moved forward with a $15 billion bailout for General Motors and Chrysler.
Meanwhile, on the House of Representative side, Treasury Department representatives were grilled by elected officials who are unhappy with the progress of the $700 billion Wall Street bailout.
A shift in focus may be starting. Based on the comparative sums of money, the auto industry bailout has receive attention and scrutiny that is out of proportion to the Wall Street bailout. This may start to change.
Treasury Secretary Henry Paulson did not appear Wednesday before the House of Representatives committee that is overseeing the Wall Street bailout. Instead, Paulson sent one of his deputies, Neel Kashkari. Henry Paulson must have seen what was coming, because Neel Kashkari was absolutely grilled.
One congresswoman described the Wall Street bailout as "the great taxpayer train robbery." And this wasn't a Democrat, but rather Republican Representative Ginny Brown-White from Florida.
Complaints across the board were that Congress has not received specific updates on spending. Also, mostly on the Democratic side, elected officials are irate because the Wall Street bailout money is going totally to financial institutions, rather than to help families avoid foreclosures.
"Imagine the foreclosures we would have had, if we had allowed the economy to collapse," Neel Kashkari responded, in defense.
ABC News reports that the first $335 billion of the Wall Street bailout money has been spent as follows: (1) $165 billion to shore up 87 banks in 32 states, (2) $85 billion reserved for other banks, (3) $40 billion to rescue AIG, (4) $25 billion to rescue Citigroup, (5) $20 to bolster the Federal Reserve.
Congressman Brad Sherman, a California Democrat, became highly agitated when Kashkari could not specifically answer whether CEO salaries and bonuses are being restricted. Starting in January, the chief executives of companies such as AIG and Citigroup are going to face the congressional heat, similar to what the auto executives have faced.
The $15 billion auto industry bailout passed the House late Wednesday, 237 to 170, but it will face tougher sledding in the Senate. A Senate vote on the auto industry bailout is set for Friday, but proceedings could extend into the weekend.
Democratic Senator Byron Dorgan of North Dakota asked why Richard Shelby and other Republicans are so opposed to boosting the auto industry, after bailing out AIG and Citigroup with few questions. Reporters repeatedly asked Shelby whether his goal is simply to give a competitive edge to non-union auto plants in the Southern states. Shelby answered that he simply wants to see balanced, free-market competition.
Anyone who seeks a lesson in civics could learn plenty from the proceedings regarding the Wall Street bailout and the auto industry bailout.
SOURCES
Live proceedings on C-SPAN
ABC News
Published by Michael Thompson
Michael Thompson is a retired newspaper reporter who lives in Saginaw, Michigan. Main topics are political and social justice issues, with occasional escapism into sports and so forth. View profile
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4 Comments
Post a CommentFinance is more critical to the health of this nation than the auto industry. The happenings also expose what has been a veiled disregard towards the Midwest. The axis of power in the Western World is the DC-Boston corridor. Lawmakers have made this very clear.
These guys better get their act together. Shelby and some other Republicans are about to see a world of hurt if the Big 3 declare bankruptcy or any one of them collapses. Better to have let AIG fall, those insufferable thieves...
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Excellent coverage on the bailouts.