Bush's Bailout = Time Bomb

cross posted at DailyKos

President Bush, using TARP funds to loan money to the Big Three, in announcing the action this morning included the condition (i.e. order) that the UAW re-negotiate the terms of their contract to bring them "in line" with what foreign manufacturers' are paying their employees in this country.

At the same instant, Treasury requested of Congress the second installment of the TARP money as the Big Three Loan of 13.4 Billion depleted the 350 billion TARP bailout fund issued by Congress in October (what, about 45 days ago?!).

Knowing that the Obama can change the conditions of the loan as soon as he takes office, the `conditions' imposed by Bush seem superfluous and a sop to the Fanatical Southern Republicans.  Or is it?

I think that there is more than meets the eye here.  I think Bush's time bomb in the form of the Big Three Loan helps put Democrats on the defensive.

This little present is intended to destroy core Democratic Party constituencies.

The loan terms announced today is a vehicle to promote a Republican Comeback Strategy for the next election cycle.

more below the fold


Republicans hate unions and will kill them if possible.

Bush is trying to poke Obama in the eye with a condition he knows that Obama must deal with for a very core constituency.  Hoping he will deal with it in such a way that it dissolves the goodwill Obama has been trying to build up with Republicans.  

Republicans are hoping that in the interests of bipartisanship that Obama at least partially sacrifices Unions; the beaten wife of the Democratic Party (face it: who else are the Unions going to support?) to the point that they collapse, or splinter the party.  

Unlike other special interest groups and 527's, Unions supply the progressive voice, manpower and funding necessary to support Democratic Ideals in lean times, while under attack (since Regan).  It is the only Progressive voice on the Democratic side that has real substance and legislative recognition.  If Republicans can kill them, then going after the other bastard stepchildren of the Democratic Party (i.e. GBLT) becomes easier.

Republican Strategy?

(A) Treasury now wants Congress to reconvene and fork over the other 350 Billion of TARP money,  Republican Senators will hold this up, aided by the blue dogs, until Bush's condition of `revising' the Union Contract becomes a legislative string (i.e. law) attached to the TARP money, denying Obama from modifying the terms of the loan.   The Choices:  Obama ignores it and issues a signing statement or The Union shrivels and dies, Democrats loose an organized core constituency.  

Solution:  Wait until the New Congress is sworn in on Jan. 5th.  The new Congress should also go after the `loopholes' inserted by Treasury that snookered the Congress on executive Bonuses and Compensation.   This is the point where Congress can insert a claw back provision regarding salaries and bonuses, regaining at least 30 to 40 Billion of the bailout money.   That sets up loans and guarantees for the Big Three without making Main Street Poorer.

(B) Republicans want (and need) a boogie man to beat up on while they are almost out of power.  Who better than those nasty mean unions, the perennial favorite whipping boy of the Republicans', eclipsing even their hatred of the Clintons.   Reversal of the Bush Conditions gives the Republicans a focus for their talking points and the hate machine.  This makes Obama less effective as they will concentrate on him and his `friends' in the mean nasty `ole unions.  This is much better than trying to find a new villain to create with a popular President.  

Solution:  The real problem with the Big Three not being competitive is their legacy costs; Pension (retirement) and Health care.  In a single stroke, Obama and the new Congress have the ability to solve this dilemma by using the Pension Guarantee Corp. to assume and administrate the pension costs of the Big Three, possibly folding it into the Social Security System as a supplemental payment to the retirees.

The health care issue can be solved by extending the health care coverage and pricing those members of Congress currently receive to all employees of the Big Three at the same cost.  This can be done by either by Executive Order or Congressional legislation.    

This accomplishes goals that would advance the Democratic cause.   (1) Diminishes the ability of the Republicans to gin up the Union Hate Machine as these are indirect actions aimed at removing excessive costs from the Big Three.   (2) Advances Obama's cause of lowering Health care costs to Main Street, and solidifying the chance of passage of some form of universal health care for all Americans. (The Republicans use a crisis to their advantage, why can't we?) (3) Reinforces support for a core constituency that is in danger of being wiped out.

(C) Kill the Unions: Much like Elmer Fudd /Bugs Bunny cartoon (kill the Wabbit), Republicans are obsessed with killing Unions and the movement.  Republicans and their allies in the Chamber of Commerce are aware that Unions have been the major force driving progressive democratic reforms such as sustaining manufacturing jobs, raising the minimum wage, promoting Social Security and universal health care among other progressive ideals.   This makes unions a core constituency of the Democratic Party.  

However, over the past 30 years, Elected Democrats have allowed Unions to become more burdened with obsessive and restrictive regulation and reporting requirements resulting in weakening Unions.  Union Leaders, familiar with the give and take of the legislative and electoral process (they are truly democratically elected, by direct representation) have allowed this to happen. The result being Unions kicked repeatedly in the face by Elected Democrats caving in on Union related issues (see above), telling the Unions it was a part of the legislative negotiation process and promising that the next time they would support the Union side.   Like the Beaten wife, the Unions played along, after all, the alternative was launching their own political Party in an increasingly hostile environment.  Better to play with and support the Democrats.  Unions by their nature are forced to support the Democratic Party; the Party leaders know this and use the Unions as a bargaining chip when faced with stiff opposition from Republicans.  This further deteriorates the Unions' and the Party's power and ability to pass progressive legislation.  

Sidebar: To draw a parallel, Obama's invitation to Rev. Rick Warren to deliver the invocation at the inaugural is to the GBLT community akin to the abuse Unions have suffered at the hands of Elected Democratic leaders for years.  This ingrained behavior must be modified from undercutting to support.

Solution:  Democrats are in a position (almost) to unilaterally control and pass a reasonable progressive agenda.  Elected Democratic Leaders need to recognize that it is time to strengthen the core continuities that they have sacrificed for convenience over the years.  This means unwavering support for such progressive legislation such as universal health care and the Employee Free Choice Act.  The Republicans recognize that universal health care will put them squarely out of power for at least a generation, but is the time for Democrats to demand compromise on the Republicans part as they are now the minority party.  


Congress should not reconvene until the Next Congress is sworn in.

Over the past 30 years, Elected Democrats have developed an ingrained behavior that makes compromise and sacrifice at the expense of their core constituencies the norm.  Bush's time bomb in the form of the Big Three Loan helps maintain this behavior with the Republican Controlled Media if direct action is taken to support the core constituencies.

Elected Democrats need to realize that they are now the masters of their own fate, and act accordingly to support their core principles and constituencies, directly and indirectly.

Bush's Big Three loan comes with invisible strings designed to promote a Republican comeback strategy by putting Democrats in a `looking bad' position by supporting their core constituency.  Democrats can counter this by using political jujitsu to help Republicans overplay their hands and show that Democrats directly strongly support US business, indirectly their core constituency and economic recovery from the greatest threat facing our nation since the Great Depression at the same time.  

Tags: Bush, constituency, core, Democrat, Leaders, Republicans, strategy (all tags)



I've heard it's rumored in management...

...circles within the auto industry, that there's one school of thought that's promoting the concept of taking the bailout money and declaring bankruptcy sometime in late Winter or early Spring, anyway, primarily as a strategy to break union commitments, etc.

I really hope that's not the case (or, the end result). On a personal level, and career-wise, I spent a bit of time working with the UAW in Michigan, as a byproduct of my political work, and it pains me to see them at the "business-end" of all this misdirected, GOP ire.

by bobswern 2008-12-19 09:40AM | 0 recs
Re: I've heard it's rumored

IF that rumor is even close to true, than it demonstrates & proves that management is just as poor, misguided, abusive, careless and ineffective as has been portrayed by their worst detractors.  It needs desperately to be replaced wholesale.

What they really need to worry about is what happens after Jan. 20th.  Obama has stated strong support for the UAW.  The new Democratic Congress will approve funds to keep the Big Three alive (which will forestall bankruptcy).  However, any further money that is made available to flow to the Big Three will come with effective oversight.  This will include a through review of the layers of management at the Big Three, and their activities.  I expect to see management layoffs through reorganization.

Get used to being at the 'business end' of the GOP gun.  They're busy trying to keep Unions as the biggest Villain in town (which the Unions need to put creativeness not just advertising and money, into countering).

by NvDem 2008-12-19 10:07AM | 0 recs
Re: I've heard it's rumored in management...

That would be a stupid strategy... Bankruptcy means the end of their business...  no one will buy cars from a  bankrupt manufacturer.

They also don't seem to hate the UAW as much as Republicans do.  They haven't been blaming labor and just yesterday, Chrysler offered a seat on the board of directors to the UAW.

Naw, I think that it's pretty clear that the Big 3 and the UAW are on the same page going forward....

by LordMike 2008-12-20 07:13AM | 0 recs


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