Dear Mr President, Bankruptcy, not Bailout for the Auto Industry
Well President Bush, if you are looking for public approval of bankruptcy for the auto industry you can start here. Yes, bankruptcy however viewed and the difficulties attached to it is a long standing method for repairing failing companies as well as an option for individuals who find themselves in critical financial failure. There are more than several forms of bankruptcy and Chapter 11 is common and has been used many times to restructure failing companies and have them emerge later stronger for the effort. Certainly there have been those who have failed even with the option of bankruptcy. But if the auto industry is sincere in their expressed interest to save jobs and the businesses they represent as well as having an honest and practical plan for restoring the companies they operate, bankruptcy is the answer.
To receive public funding and risk taxpayer’s money with the probability they will not honor their obligations or be required to by the federal government, a bailout would do more harm to consumer confidence and to that of the markets if they are allowed a free pass on their dismal records at other’s expense. There should not be this much discussion on the subject which indicates the whole matter has become political and should be concluded with bankruptcy.
As for the article below, President Bush is right. The warnings were given and ignored. The subprime mortgage mess was the prime mover in the financial meltdown. Much needs to be repaired and the bailout frenzy is part of that. No one is as concerned, Mr President, about your legacy as they are the economic strength of the nation. Please use your remaining time if office to help fix the economy in a prudent manner. By default that will help shape your legacy in a way you will like as well as the rest of us.
Stanford Matthews
MoreWhat.com
Bush Says Economic Meltdown Forced Aggressive Intervention
White House 18 December 2008 |
President Bush says the ongoing financial crisis has forced him to endorse aggressive government intervention in numerous economic sectors in spite of his core, free market principles. President Bush restated his desire to prevent the U.S. auto industry from going bankrupt, while stressing that federal intervention should be temporary.
President Bush came into office eight years ago with an agenda of low taxes and limited government. But, in a wide ranging discussion in Washington, Mr. Bush admitted that the economic meltdown of the last year has forced him to set some of those principles aside.
The latest example is a rescue package the administration is contemplating for troubled U.S. automakers. An earlier attempt at a rescue plan passed the U.S. House of Representatives, but the measure failed in the Senate.
Mr. Bush noted that the U.S. auto industry employs millions of people, and that it is on the brink of collapse. “I am worried about a disorderly bankruptcy and what it would do to the psychology and the markets,” he said.
Mr. Bush said he intends to act, but has yet to decide how best to do so.
Earlier this year, Congress approved a $700-billion financial rescue package. Mr. Bush said he disliked the idea of such massive government expenditure and intervention, but that he had been warned of a possible economic catastrophe worse than the Great Depression if no action were taken.
The president was speaking at a gathering of the free market policy organization, the American Enterprise Institute. He was asked to respond to accusations from Democrats that his economic agenda sowed the seeds of the financial crisis.
“I’m looking forward to the true history of this financial crisis being written,” said Mr.Bush. “No question part of the crisis came about because of excesses in lending in the housing market. My administration early on expressed concern about implicit government guarantees in the mortgage industry, in Fannie and Freddie.”
Fannie Mae and Freddie Mac are government-sponsored mortgage insurers that have benefited from the financial rescue package.
Mr. Bush added that he understands the frustrations of ordinary Americans whose tax dollars are propping up corporations because of what he described as the “excesses on Wall Street.”
The president, whose term ends next month, also expressed disappointment that free trade pacts with Colombia and Panama have not been ratified during his time in office.