Everybody’s been asking: “Where’s Obama” on just about everything. What’s his take on the auto bailout? Rush Limbaugh wants him to issue a statement promising no tax increases for a few years.
But at least there seems to be movement on the auto bailout, according to Bloomberg.
President-Elect Barack Obama`s transition team is exploring a swift, prepackaged bankruptcy for automakers as a possible solution to the industry’s financial crisis, according to a person familiar with the matter.
That is what they call a trial balloon.
And it seems that, from the various quotes from Washington barons of the realm, that the idea has some support.
It would probably be my preferred option. But whatever it is, it has to include haircuts all round.
The whole point of a recession is the liquidation of the malinvestments of the previous boom. Well, we are well into the liquidation of the mal-mortgages of the previous boom. Now it’s time to look at the malinvestment of the previous half-century in sky-high wages and benefits for auto workers.
It seemed like a good idea half a century ago, to promise good wages and benefits out of the huge profits of the auto companies. But things got a bit out of hand, as they do when politics gets involved in anything. Now it is time to face reality.
It’s time to get past denial, as our liberal friends say.
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