[ITG chief economist Robert] Barbera warned that opposition to lending either the $17 billion agreed to — or the $34 billon that the car companies originally requested — could result in the stock markets’ plunging by hundreds of billions of dollars. And that does not include the billions of dollars in unemployment insurance benefits and pension bailouts that would be required to assist not just the displaced auto workers, but also the many other workers, like truck drivers and waitresses, whose jobs depend on the Big Three.
“There will be tremendous regret if we don’t help them avoid bankruptcy in the next few weeks or months,” said Mark Zandi, chief economist with Moody’s Economy.com. “If they go into bankruptcy now, they’ll go into liquidation and there will be the loss of hundreds of thousands, if not a million, jobs — on top of the four or five million we’re going to lose. That will add almost a point to unemployment by itself.”
If the GOP votes against the bailout but foregoes the filibuster, they spend the next two years pounding Obama and the Dems for showering taxpayer cash on a wrecked industry to the tune of $75-$125 billion. (“The first down payment is just the beginning,” warns Shelby.) If they do filibuster, Obama and the Dems spend the next two years falsely blaming every last uptick in unemployment on a chain reaction begun by the GOP killing off a rescue of American automotives. Even Jeff Sessions is hinting he’ll vote for a short-term bridge loan to keep them afloat until the mess can be safely dumped on the new deep blue Congress. Not that tough of a choice.
The Democratic plan’s still being worked out, but the gist is that cash infusions for the Big Three going forward will be contingent upon their proving to Obama’s cabinet that they’re restructuring their way to profitability. If they can’t, the tap gets turned off and the companies will presumably be allowed to fail. Anyone who seriously believes the Democrats will let that happen in the middle of a recession that’s going to get worse before it gets better, especially as we get closer to the midterms, raise your hand. Exit question: Remind me again, given the credit crunch, who’s going to be buying these cars, exactly?