Charles Krauthammer points out that, finally, we have come to a clear debate on the federal bailout.
The fault line of this debate, Krauthammer says, is the bailout of Detroit’s auto industry, although yesterday saw stories of the mayors of Philadelphia, Phoenix and Atlanta writing a joint letter to the Treasury in which they requested a portion of the $700 billion federal bailout fund.
It’s undeniable that the proposed $25 billion – set to be debated in its legislative form in the Senate this Monday – to the Big Three U.S. automakers (GM, Ford and Chrysler) has sparked perhaps the most debate as to the direction of the federal bailout in general.
“Where do you stop?” Krauthammer asks. “Once you’ve gone beyond the financial sector, every struggling industry will make a claim on the federal treasury. What are the grounds for saying yes or no?”
Think he’s stretching it? What about this New York Times article, “Lobbyists Swarm the Treasury for Piece of Bailout Pie”? Talk about mental images. According to the NY Times’ sources within various industries, the Treasury itself “wants to avoid too strict a definition of eligible institutions,” at least until Obama begins his term.
The realization that the bailout package doesn’t even have an oversight panel yet is frustrating to all – one cynical economist takes a stab at changing the bailout’s acronym, TARP (for Troubled Asset Relief Program) to BEAST, Bail out Everyone And Sink the Taxpayer. However, Krauthammer has a point that at least some decent, well-articulated debate is going on, particularly over the auto industry rescue.
(GM, for the record, says a majority of Americans believe the government should intervene and help the industry with loans.)
On The Corner: Jim Manzi acknowledges the “fairness” question poised by supporters of a bailout – “Is this fair, given that you and I are being forced to cough up an immense amount of money to bailout bankers in New York who are far less sympathetic characters than assembly line workers or Assistant Market Research Managers in Warren, Michigan?”
But Manzi holds to his argument against an “exercise of political power to deliver taxpayer funds to one organized group of citizens” at the expense of the country’s taxpayers.
Elsewhere, Tom Piatak says that a government investment in the U.S. auto industry is not irresponsible or a waste of taxpayers’ dollars, particularly taking into account the small-in-comparison amount actually requested (AIG just got an additional $150 billion), the tremendous impact the demise of the Big Three would have on economy (an estimated three million lost jobs, to start with) and the fact that American cars are ranking competitively against, if not better than, foreign models.
It’s a hard debate, to be sure, but, as Krauthammer drives home in his editorial, one that highlights the differences in economic philosophies and begs the question as to which path America will tread in the coming months.
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