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Posted on 08/22/2008 7:11:37 PM PDT by rabscuttle385
WASHINGTON -(Dow Jones)- Sen. John McCain, R-Ariz., in an important shift, said on Friday he backs a plan for the federal government to provide low- interest loans to struggling U.S. auto makers.
The presumptive Republican presidential nominee said the loans are needed to help auto makers build the next generation of cars and become financially stable.
"Our auto companies are rising to the challenge of building the next generation of American cars, but are doing so in times when credit conditions cripple the funding for the facilities and technologies to take the steps to the future," McCain said in a statement.
(Excerpt) Read more at money.cnn.com ...
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Blatant appeal to Michigan voters...
I may be tired from all of the traveling but I thought I read low interest low.
Where I am from, one is required to pay back something called a loan.
Ugh.
The industry impacts a lot more than Michigan voters.
Just too important to fail, right?
Oh my! Isn’t this the same “plan” that blessed us with the K-Car ... Volare, Aspen, and the dreaded Granada ?
I might be older than some of you people, but didn’t the govt loan Chrysler money in 70s and didn’t Chrysler pay it back?
A little more soft-socialism from Sen. McCain.
Undoubtedly. That is, however, his biggest reason for supporting it, though. IMHO.
You are correct.
SCREW THIS
Let them fail if they have to.
Loans are not going to solve the fundamental problems of the US automakers. McCain just looking for union votes.
Then I guess Reagan was a socialist too. Here are some loans Reagan approved in 1982
APPENDIX B. THE ROLE OF THE FEDERAL FINANCING BANK
TABLES
1. CREDIT BUDGET TOTALS
2. THE CREDIT BUDGET TOTALS-JANUARY BUDGET COMPARED TO MARCH REVISIONS
3. MAJOR CREDIT PROGRAM CHANGES IN LEVELS OF ACTIVITY BETWEEN FISCAL YEARS 1981 AND 1982
4. THE CREDIT BUDGET BY FUNCTION
5. FFB-FINANCED CREDIT ACTIVITY
6. LIMITATION REQUESTS IN THE FISCAL YEAR 1982 BUDGET REVISIONS
7. PROGRAMS PROPOSED TO BE EXEMPT FROM LIMITATION FOR FISCAL YEAR 1982
8. THE CREDIT BUDGET TOTALS FOR FISCAL YEAR 1981
9. CREDIT TARGETS IN THE FISCAL YEAR 1981 SECOND BUDGET RESOLUTION
10. PROGRAMS FOR WHICH PROPOSED LIMITATION FOR 1982 EXCEEDS ESTIMATED NEW ACTIVITY
11. NATIONAL DEFENSE-SUM MARY OF CREDIT ACTIVITY
12. INTERNATIONAL AFFAIRS-SUMMARY OF MAJOR CREDIT PROGRAMS
13. ECONOMIC SUPPORT FUND LOANS
14. FUNCTIONAL DEVELOPMENT ASSISTANCE LOANS
15. CREDIT ACTIVITIES FOR OVERSEAS PRIVATE INVESTMENT CORPORATION
16. HOUSING AND OTHER CREDIT GUARANTEES
17. FOOD FOR PEACE (PUBLIC LAW 480) LOANS
18. EMERGENCIES IN THE DIPLOMATIC AND CONSULAR SERVICES
19. FOREIGN MILITARY SALES CREDIT
20. CREDIT ACTIVITIES FOR EXPORT-IMPORT BANK
21. ENERGY PROGRAMS-SUMMARY OF CREDIT ACTIVITY
22. SYNTHETIC FUELS AND ENERGY SECURITY RESERVE LOAN GUARANTEES
23. RURAL ELECTRIFICATION LOAN AND LOAN GUARANTEE ACTIVITY
24. TENNESSEE VALLEY AUTHORITY LOANS AND LOAN GUARANTEES
25. OTHER ENERGY CREDIT PROGRAMS
26. WATER AND POWER LOAN PROGRAM
27. AGRICULTURE-SUM MARY OF CREDIT ACTIVITY
28. AGRICULTURE CREDIT INSURANCE FUND LOANS AND LOAN GUARANTEES
29. COMMODITY CREDIT CORPORATION LOANS
30. COMMERCE AND HOUSING PROGRAMS-SUMMARY OF CREDIT ACTIVITY
31. FEDERAL HOUSING ADMINISTRATION LOANS AND LOAN GUARANTEES
32. GOVERNMENT NATIONAL MORTGAGE ASSOCIATION-TANDEM PLAN DIRECT LOANS
33. GOVERNMENT NATIONAL MORTGAGE ASSOCIATION-GUARANTEES OF MORTGAGE-BACKED SECURITIES
34. LOANS FOR HOUSING FOR THE ELDERLY OR HANDICAPPED
35. RURAL HOUSING CREDIT ACTIVITIES
36. NATIONAL CREDIT UNION ADMINISTRATION LENDING
37. NATIONAL CONSUMER COOPERATIVE BANK (NCCB) LOANS AND GUARANTEES
38. CHRYSLER LOAN GUARANTEES
39. SMALL BUSINESS ASSISTANCE CREDIT ACTIVITIES
40. BUSINESS LOAN AND INVESTMENT FUND, LOANS AND LOAN GUARANTEES
41. DEPOSIT INSURANCE PROGRAMS
42. FEDERAL SHIP FINANCING FUND-FISHING VESSELS
43. TRANSPORTATION-SUMMARY OF CREDIT ACTIVITY
44. RAILROAD REHABILITATION AND RESTRUCTURING LOANS AND LOAN GUARANTEES
45. LOAN GUARANTEES FOR AMTRAK
46. OTHER RAILROAD ASSISTANCE LOANS
47. AIRCRAFT PURCHASE LOAN GUARANTEES
48. FEDERAL CREDIT FOR SHIP FINANCING
49. FEDERAL HIGHWAY LOANS
50. COMMUNITY AND REGIONAL DEVELOPMENT-SUMMARY OF CREDIT ACTIVITY
51. COMMUNITY DEVELOPMENT BLOCK GRANT LOAN GUARANTEES
52. NEW COMMUNITIES FUND LOANS
53. REHABILITATION LOANS
54. ECONOMIC DEVELOPMENT CREDIT ASSISTANCE
55. COASTAL ENERGY IMPACT LOANS
56. RURAL DEVELOPMENT INSURANCE FUND CREDIT ACTIVITIES
57. RURAL ELECTRIFICATION ADMINISTRATION CREDIT ACTIVITIES
58. SMALL BUSINESS ADMINISTRATION DISASTER LOANS AND LOAN GUARANTEES
59. COMMUNITY SERVICES ADMINISTRATION CREDIT
60. INDIAN CREDIT ASSISTANCE
61. EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES-SUMMARY OF CREDIT ASSISTANCE
62. CREDIT ACTIVITIES FOR THE GUARANTEED STUDENT LOAN PROGRAM
63. GUARANTEES OF STUDENT LOAN MARKETING ASSOCIATION OBLIGATIONS
64. CREDIT ACTIVITY FOR NDSL PROGRAM
65. CREDIT ACTIVITY FOR COLLEGE HOUSING LOANS
66. HEALTH-SUMMARY OF CREDIT PROGRAMS
67. CREDIT ACTIVITIES FOR HEALTH MAINTENANCE ORGANIZATIONS AND MEDICAL FACILITIES
68. OTHER HEALTH CREDIT PROGRAMS
69. INCOME SECURITY-SUMMARY OF CREDIT ACTIVITY
70. LOW-RENT PUBLIC HOUSING LOANS AND LOAN GUARANTEES
71. OTHER INCOME SECURITY PROGRAMS
72. VETERANS’ BENEFITS-SUMMARY OF CREDIT ASSISTANCE
73. CREDIT ACTIVITY FOR VETERANS’ EDUCATION PROGRAMS
74. CREDIT ACTIVITY FOR VETERANS’ HOUSING PROGRAMS
75. GUARANTEED LOANS TO U.S. TERRITORIES
76. DISTRICT OF COLUMBIA AND NEW YORK CITY-SUMMARY OF CREDIT PROGRAMS
77. LOANS TO THE DISTRICT OF COLUMBIA FOR CAPITAL OUTLAYS
78. NEW YORK CITY LOAN GUARANTEE PROGRAM
Limited government, indeed. Bailouts, bailouts, bailouts! Whee! But only if your industry is in a swing state. If Georgia were in play, we’d have peanut bailouts. If Texas were in play, we’d have barbecue bailouts. If West Virginia were in play, we’d have cousin bailouts.
It was reported they paid it back. I never saw any proof. I believe it was Lee Iacoca that turned Chrysler around, no?
I had to bail my cousin out once. He swore she looked 18...: )
Hate to break it to you, but Reagan great, not perfect. He made mistakes, too, and it looks like you just listed 78 of them.
He said he was in favor of loans. Now, I am from Virginia. Here in VA if we borrow money, which called a loan, we are required to pay it back.
It’s not a handout, right? Or is the smear more important than letting small details in get in the way?
I well remember that loan, and Chrysler still deserves to die. How will our auto manufacturers ever learn to plan for the future and make their businesses more efficient if taxpayers bail them out? I’m speaking as someone who owns Ford stock and will likely benefit from this.
What would happen if we just let them fail? Would auto manufacturing disappear from N. America? No, it would not. Other manufacturers would buy up the remaining assets, and we’d likely get better autos in the long run.
BTW, have you looked at the amount of debt these auto makers already have? Using your line of thinking, maybe we should just open up a line of permanent credit for them so they can operate in the red forever like Amtrak.
What’s wrong with private forms of financing. After all, they should have no problem getting the loans if they’re a safe bet, right?
And it stinks that the politicians get to do it with OUR money!
Who the hell is going to bail out the tax payer when paying the bill comes due?
It sure won’t be the U.S. Government.The Government is broke.
Let the industry continue to restructure - along the lines of Honda - Nissan - Subaru - Mercedes-Benz - BMW - Hyundai and other relatively recent car manufacturers in the United States. They start out without the legacy burdens of bad union agreements, outdated physical infrastructures and management methods, and none of the environmental liabilities. If you subsidize or support an aging and non-competitive industry - all you’ll get is more of it for a longer time, you will not avoid the inevitable reckoning.
McCain continues to underwhelm with his economics knowledge and judgment. John - rule #1 is Government should not pick technology or business winners.
Yes and yes. I'm not big on government bail-outs, but it was well worth it, and those who bought Chrysler stock at $6 made a big pile.
I am not necessarily in favor of it, but other than the pathological dislike for McCain, I don’t why people are whining and gnashing of teeth over this. Reagan did it, and no one complained.
I think this is just someone finding an excuse for a hate McCain party.
Someone someday is going to realize that DC got us into this and that DC can’t get us out.We ain’t that stupid,,,are we?
Good point, and Chrysler still falters. They either have what it takes or not. If not, let ‘em die. Chrysler employees and assets won’t just disappear. They’ll go into more productive endeavors.
Let Cindy loan them the money. LOL
Hahaha, we finally agree on something.
“Then I guess Reagan was a socialist too. Here are some loans Reagan approved in 1982.”
Ahhh. A red herring.
I don’t recall Ronald Reagan running a campaign in 1980 that pledged to support loan guarantees. It’s been a long time, but I was there and was active in the campaign. I just don’t recall bailouts being an issue.
Once a President gets into office, he is often stuck with a lot of baloney that Congress sends his way. Ronald Reagan, like all Presidents, was forced to pick and choose his battles.
It looks like Sen. McCain has already decided that he won’t raise a finger when in comes to corporate bailouts.
Well written. If the automakers are a good bet, they'll have no problem getting private financing. But, truth be told, they are probably bad debt, so no one wants to loan them the billions more they need to correct their inefficient companies. And, why would they bother to try and become efficient when they can count on taxpayers to cover their bets? Like you said, we only delay the inevitable. Oh, they'll definitely survive with a nearly unlimited line of low interest credit from the government. What business couldn't survive with that? However, what business is going to do the painful and necessary steps to fix itself with that sort of government hammock under it?
Isn’t “picking and choosing” another phrase for compromising?
Time Magazine October 1980
http://www.time.com/time/magazine/article/0,9171,951519-4,00.html
“As his own campaign progresses, Reagan seems to be undergoing another conversion. His rhetoric has become more muted, his tone less bellicose. On domestic affairs he has changed his mind about the federal bailout of Chrysler and loan guarantees for New York City (he is now for both) and disavows any thought of asking for repeal of the federal Occupational Safety and Health Act. Such moderation of views, aides insist, is consistent with his record as Governor of California from 1967 to 1974. In Sacramento he once went along with a tax change after proclaiming himself embedded “in concrete” against it. He sometimes brings that up voluntarily these days, and says, “Well, my feet aren’t in concrete” on this or that issue.”
“Reagan did it, and no one complained.”
I did. And I was told to shut up and be a good republican.
The more things change, the more they stay the same.
There is a huge difference between being pushed into a corner and voluntarily bending over for the Left.
In McCain's case, it's almost always the latter.
welfare for the unions.
Ok - lets just set up the Federal Government to be the backing organization for ALL businesses... You make bad business decisions and you lose money - in the red - and are about to fold, just call your “Sugar Daddy” Uncle Sam and his subjects (taxpayers) will bail you out...
While I fully comprehend the scale of the problem if US Automakers fold - many thousands of people (hundreds of thousand with all of the “big three” and related suppliers). But where is the responsibility? It all really started when the Japanese companies came over and proceeded to kick the Big Three’s butts. Then along comes bailout #1 for Chrysler (and yes, I have been told that they paid back that money to the Fed...).
Yet, instead of really learning from their mistakes, they continue, seemingly oblivious to their own demise. Poor designs, poor quality, and general poor business practices (including continuing to give away the farm to Union thugs).
By the time the US makers decided to try to improve quality - they were too far behind in the game.
And these corporations are STILL making bad decisions - like having too many autos within even the same name plate that directly compete against each other in the same class, not to mention repeated platforms across all brands...
The credit problem has only made the whole situation come to a head. The problem has been there all along. Add to that the part of the credit problem that they generated themselves...rolling negative equity into bigger and bigger notes - one vehicles that don’t keep their value in the first place.
And on and on...
Where does the bleeding of consumers end?
Every dime plus interest.
You got that right, How do you justify the blatant theiveryof the unions who want to maintain their blotted paychecks, retirement and healthcare that has damned near bancrupted the auto industry, The retirements for all three are so far in the red they willnever see the light of day.
Actually, GM and Ford had made dramatic progress in recent years on pension funding - last year GM had an $8.348 Billion OVERfunded pension plan, and Ford had cut their deficit to $3.263 Billion.
Currently, though, GM stands at an $827 million deficit and Ford is at $9.215 Billion deficit.
What happened? Stock market crashed. These are absolutely enormous pension funds.... as a % of obligations, both are actually still pretty close to fully funded.
The shameful one is ExxonMobil, who has let even larger pension shortfalls linger....
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