Wednesday, December 24, 2008

On Having A Plan

Republicans throughout the country commenting on the rescue plan(s) for the domestic auto industry are setting a world record for ardently substituting rhetoric for fact. But when nonsense is spewed by the individual currently the favorite of Repub voters for GOP presidential nomination in 2012, it warrants notice.

Interviewed by the right-wing (and yet, within the mainstream of conservative Republicanism) Human Events on December 22, Sarah Palin rationalized her support for the recovery plan for financial institutions and opposition to it for the domestic auto industry:

Now the situation has changed, and I think the GOP did the right thing yesterday in saying, “Look, we still want more information before one industry -- in this case, the auto industry -- gets more taxpayer assistance until everybody knows what those dollars would be used for and how it will lead to success in this industry.”

Earlier that day, President Bush had announced a plan that

will be drawn from the financial rescue package Congress approved earlier this fall. The terms of the loans will require auto companies to demonstrate how they would become viable. They must pay back all their loans to the government, and show that their firms can earn a profit and achieve a positive net worth. This restructuring will require meaningful concessions from all involved in the auto industry -- management, labor unions, creditors, bondholders, dealers, and suppliers.

In particular, automakers must meet conditions that experts agree are necessary for long-term viability -- including putting their retirement plans on a sustainable footing, persuading bondholders to convert their debt into capital the companies need to address immediate financial shortfalls, and making their compensation competitive with foreign automakers who have major operations in the United States. If a company fails to come up with a viable plan by March 31st, it will be required to repay its federal loans.


Palin may not have had the opportunity to learn of this proposal before her interview with Human Events. She may not have been aware that the conditions the President proposes are stricter and wider-reaching than anything the captains of the financial services industry have had to put up with.

However, Governor Earmark must have known, assuming she now reads a newspaper, that the proposed recovery plan for the auto industry- unlike that for the banks et. al- was a loan rather than a handout. Nevertheless, she applauded action by Congressional (primarily) Republicans to vote "‘no’ to additional bailout efforts of one industry [the automobile industry, whose proposed federal bailout was stopped in the Senate December 11]." Then she rationalized the plunder by financial institutions, fantasizing "But back then, weeks ago, when that initial bailout [of financial institutions] was proposed, remember, it was considered at the time a rescue and not necessarily a bailout."

No, we don't "remember." The $700 billion was acknowledged as a "bailout" before the spinmeisters in the industry and their allies in the mainstream media morphed it into a "rescue plan." The recovery plan(s) for the auto industry, continually blasted by conservative Republicans, is a loan, with conditions far more stringent than that faced by the financial crowd, whose executives were not subjected to the critical congressional hearings faced by the auto industry- and escaped the scrutiny applied to that sector.

The President's proposal is flawed and will need to be modified by the incoming Obama administration. Still, it is an improvement upon the inaction which had characterized his response to the economic crisis, including that of the auto industry. It is disturbing that the Governor of Alaska, ignorant while a campaigner for vice-president, instead has chosen to continue simply to recite Republican talking points with no interest in mustering an original thought.


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