McCotter voted for the auto bailout because, as Moody’s pointed out, GM and Chrysler going out of business would have put a $300 billion burden on the social safety net, that obviously would not have been recoverable. In addition, US manufacturing jobs are dissappearing. Would you like the auto industry to go that same way? The auto industry also had to restructure. The Wall Street Bank Bailout, that MCCotter voted against, did not call for a restructuring of the banking system, which is why there is no credit flowing down to small business and entrepreneurs.
Moody’s isn’t exactly credible. It wasn’t necessarily a proposition between liquidation and bailout; they could have filed for chapter 11 reorganization like thousands of companies do. McCotter knows where his bread is buttered, that’s all; the auto industry is a sacred cow in his state. By contrast, the bank bailout, was a no-brainer for those who had all the facts. The choice was a stark one - the unapallatable borrowing from the Fed or national and global financial meltdown resulting in a massive depression and a tide of human misery.
A $300 billion burden to the “safety net” would have been preferable to spending twice that in bailouts for union thugs.