by Swopa

It’s excellent news that Reid, Pelosi and Frank are now making noises about how they will have votes next week on a bridge loan for automakers, but it’s not clear to me that the votes are there to get this through, because:

1) Some Congressional fools are talking bankruptcy, so the car companies can reorganize and break the unions (the second part being most important to Republicans). Problem is that 80% of consumers won’t buy a car from a company in bankruptcy. Letting any of the Big 2 1/2 go bankrupt is the same as just destroying the company.

2) Other Congress critters are talking about not formally having them go bankrupt, but forcing massive cuts and concessions that amount to the same thing. Given that auto purchasers are already reluctant to buy from GM, I’m not sure the semantics will assuage their fears. Even if they do, massive cuts will equal massive job losses, not just at the Big 3 but in downstream suppliers, dealers and through a ripple effect into even unrelated jobs as the money in many communities dries up.

3) Bush, with the deep insight and use of cliches he is famous for said something about "good money after bad". Given that his government has spent going on 8 trillion dollars trying to prop up the financial industry, trillion following trillion, I think I can be forgiven for reading that as "I only like throwing bad money after good when it bails out rich people. This is a great chance to break unions. Oh and to make sure millions lose their pensions. "

Obama’s job plan is to create 2.5 million jobs in 2 years. It’s already not enough, since the economy is shedding jobs faster than that. But if he starts down 2 to 3 million jobs because the Big 3 go under (and as Ford said, if GM goes down, probably everyone goes down), well that 1 1/4 million a year won’t even get him to even.

When Paulson came begging for 700 billion dollars for financial companies Obama twisted arms, hard, to get Wall Street that money. We were told, at the time, that not giving the money would lead to economic apocalypse and a Great Depression.

If the Big 3 go under, that will cause a depression. The US economy cannot stand the shock of losing all those jobs just as the recession is getting really bad. It will turn a very bad recession into something far far worse.

Obama has mostly been standing aside on this. Barney Frank is right, Obama needs to do what he did for the bailout, and step up and push it through. Even many Republicans will respond to the President elect.  To not make the effort will show that he cares more about Wall Street than Main Street—that he is fundamentally no different from Republicans like Paulson: willing to give money bailout the rich, but unwilling to help ordinary people.

Losing 3 million jobs isn’t how Obama should want to start his Presidency. It’s time for Obama to step up and show that he takes care of normal folks as much as he takes care of rich Wall Street folks.

Ball’s in your court, President-Elect. If you let 3 million people lose their jobs, you’ll be a failure before you even swear the oath of office.

Related posts:

1. Rattner’s Bailout: Steve Still Lacks Knowledge of Auto Industry, Self-Awareness
2. Individual Mandate – Public Option = Insurance Industry Bailout
3. The Independence of the Fed at Risk: Watt vs. Paul-Grayson
4. The Guns of August: A Call to Arms for Progressives and Obama Activists
5. On “This Week,” Paul Krugman Dispatches 3 Wingnut Talking Points on Auto Industry in 2 Minutes