AOL Money & Finance

House approves $25 billion for automakers

With little fanfare -- and much less reasoned debate -- the House of Representatives approved $25 billion in artificially low interest, taxpayer-funded loans for the U.S. auto industry. The Senate and President are expected to provide their approval in the next few days, but the details on how loans would be doled out will not be decided until after the November elections.

Given the $700 billion gift to bankers currently being pushed through Congress, it would be hard for Washington to take a principled stance against an auto industry bailout. But the industry had been hoping that the terms and conditions of the loans would be decided before the election, when both parties are looking to win votes from industry workers in battleground states like Ohio and Michigan. Analysts say that Congress may be feeling less generous after the elections.

With bailouts for the auto and banking industries underway, now would be a good time to deliver the elegy for capitalism and free markets. We have now transitioned into a hybrid model -- privatized reward and socialized risk -- where companies can earn billions and pay out bonuses when times are good, and count on handouts when the going gets tough.
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Last updated: November 24, 2009: 09:20 AM

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