Compartmentalize? Washington doesn't
Sorry, it doesn't work that way inside the beltway. Image matters. Signals matter. In short, events in one theater can affect the entire political climate.
And that's the case with the nation's job losses in 2008 and the proposed $34 billion rescue package for the Big Three auto manufacturers winding its way through Congress, so says economist David H. Wang.
"We have now suffered 2 million jobs lost in 2008, including an awful 533,000 jobs lost in November. That means the auto rescue package is a done deal," Wang said. "There will continue to be debate on the scope of the rescue, the metrics, the form of the U.S. government's investment, the timetable for the repayment, and how much Congress wants the new auto sector to contribute to energy policy goals, but the status of the package is a done deal."
And the political climate clincher, is obvious enough, Wang added.
"The U.S. Congress is not going to say, after seeing two million jobs lost in a year, 'O.K., here's another, automatic, 1-million job loss, just for good measure, to further drive the U.S. economy into a ditch' " Wang said. "The U.S. auto sector represents too many good-paying industrial jobs and spin-off jobs. They are a key component of our industrial base and will play a role in the nation's economic recovery."
General Motors (NYSE: GM) shares rose 8 cents to $4.20, while Ford (NYSE: F) rose 9 cents to $2.75 in Friday morning trading. Chrysler is privately-held.
Further, economist Peter Dawson said a cessation of auto manufacturing operations would drive unemployment levels "to Great Depression percentages," in many Midwest U.S. states. "The social costs and state budget deficits in 3 years alone, would exceed the cost of the rescue package, so the package is as much about reducing social services spending as it is about transforming the auto sector."
Auto Sector / Economic Analysis: It's now incumbent on Congress and GM, Ford, and Chrysler to agree on a rescue package with specific, substantive metrics. Among other stipulations, the deal should contain the goal of a next-generation car that dramatically cuts energy use, along with a line of vehicles that can compete on quality and price with the best vehicles produced by foreign manufacturers.
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Reader Comments (Page 1 of 1)
12-05-2008 @ 2:27PM
3018c133 said...
When is Congress going to wake up and realize that we can not afford to continue to allow corporations to close factories here and open new ones overseas.When is the last time that a Mexican or Chineese manufacturer relocated to the USA.Civil unrest will surely follow as millions more become unemployed and extending unemployment benefits is not the same as job creation.Mass unemployment is more a threat to national security than a foregin terriost attack and Congress would be wise to ammend our trade agreements made during the Bush Presidency.
12-05-2008 @ 2:36PM
Toph said...
The govt cant bail out these idiots they caused there own issues, go BK lay offs whatever. You /they caused the problem, like we need a car dealership on ever corner, like we need bigger trucks with bigger engines to prove to everbody you have a small dick, wake up you fools buy whats practical dont buy to impress your homo friends or hairy girlfriend/wife. loosers
12-05-2008 @ 3:14PM
Robert Campola said...
You are talking about people that are or are supposed to be very highly educated. If one proposal does not fit put another one on the table, threats of layoffs and massive long term depresssion type scenarios serves no purpose, stop pulling your weight and power around, everybody knows you have it and just come up with a solution.
12-06-2008 @ 4:29PM
patty said...
Yipee kiyeah!
To all the auto-bailout haters,"BUY AMERICAN"
I for one am quite pleased to hear that the bail-out may be a done deal and the auto industry can start afresh and get themselves out of the slump.With the help of the American public we can get the auto business on track.
And for you AUW haters don't hate elate!
Where you get the ideal that we are paid $75.00 an hr. has me scratching my head,if only we could be that fortunate.
With the cost of living deduction of almost $3.50 we bring home around $25. an hr.now.
12-07-2008 @ 1:25AM
D Latta said...
Hey people stop repeating the 20 second sound bites you are fed on TV. They want to get everyone stirred up, it gets ratings , thats what they are about! How about talking facts! So many want to put down the US auto companies, GM was down 40 some percent, Toyota was down 32% with a projected drop in net income of 70%. Also their credit rating was lowered two notches by Finch. It isn't just the "Big Three"! And nobody wants to buy their cars is crap! Untill July 2007 they held 50% US market share against some 14 different car companies! Read up on some facts! GM alone has more vehicles getting 30+ MPG than any other auto automaker. Nine of the top 10 most efficient plants in North America are those of the domestic car companies. Hundreds of billions in tax revenues are generated by the Companies, Suppliers, and Workers! The auto industry accounts for 4% of GNP, and 1 in 10 jobs are linked to the auto industry! They didn't create this credit freeze and economic crisis! This do-nothing Congress and Administration are trying to make these guys from the Auto companies the Fall Guys! They want to shift the blame! It is US Govenment policy, lack of oversight and greed on Wall Street that created this mess which has now spread around the globe! France and most European countries are stepping in to help their auto companies, as well as Japan. Wake up People, you are being Used! Put the blame where it belongs!