In exchange for the money, the administration will have the ability to acquire stock in the Big 3, partially nationalizing the auto industry.
There is no word on why the $750 billion "economic stimulus" fund that the Bush administration obtained in October couldn't be tapped.
The administration took the automakers' bait hook, line and sinker, falling for GM's posturing that if it did not receive a check from the government, it would consider bankruptcy.
Senate Republicans, led by Bob Corker, and others like Mitt Romney, noted that Detroit's biggest problem is that their wage and benefit packages are disproportionate vis-a-vis their foreign counterparts. For this reason, the Big 3 have been in financial trouble for years, while the likes of Toyota have flourished.
As of this writing, it does not appear that the administration's agreement with the Big 3 addressed this issue. However, the Bush administration managed to obtain promises from the Big 3 to curtail executive compensation packages.
Which, you know, is a huge deal when a company is hemorrhaging billions of dollars a year.
The administration seemed terrified of the prospect of any one of the Big 3 filing for bankruptcy. I genuinely wonder if the president actually understands what bankruptcy entails. It is not a process where a company shutters its factories and ceases operations. Rather, bankruptcy simply is a process whereby a company's assets are inventoried, its debts are restructured, and collection efforts against it must cease until the "bankruptcy estate" is finalized. It can be a quick process, and while it effectively destroys a company's credit, it does not mean that tens of thousands of workers will be laid off.
It's no surprise that the Bush administration once again disregarded the wishes of Congress -- even its Republican colleagues on Capitol Hill -- and wrote the automakers an enormous check. From warrantless wiretaps to brazenly denying natural-born American citizens the protections of the 14th Amendment to an unheard-of amount of executive orders and "signing statements," the legacy of George W. Bush should forever be remembered as one big executive branch power-grab.
I vehemently opposed Barack Obama for the presidency, and was bitterly disappointed when he won.
But how can he possibly be any worse?