Bryan Caplan  

Son of Chrysler: The Stealth Bail-Out

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Paulson as a High-Pressure Tel... What the Bail-Out Crowded Out...

When's the best time to beg for a bail-out? When everyone's talking about another, bigger bail-out, of course! Via James Hamilton:

The US Senate Saturday approved 25 billion dollars in loan guarantees for the financially strapped US auto industry...

The bill, which was approved by the House of Representatives on Wednesday, are the first loan guarantees for U.S. carmakers since Congress approved a similar 675 million dollar measure for Chrysler Corp. in 1980. Chrysler Chairman Robert Nardelli, however, said this week the loan guarantees should not be considered a rescue package for struggling carmakers. "This is not a bailout," he said.

Hamilton's got the sarcasm you crave:
Well, if the loans are repaid, you might argue that it's not a bailout because no federal outlays were involved. And you might argue the same for the $1.7 trillion in Fannie and Freddie's debt that the U.S. Treasury now seems to be guaranteeing, and for the $3.1 trillion in guarantees on agency MBS, and for the $600 billion or so in loans that the Federal Reserve seems to have extended. Not to mention the $700 billion Treasury plan still under debate.
He closes:
On the other hand, what's another measly $25 billion among friends?
This reminds me of the old joke about the world as seen through Congressmen's eyes: "A billion here, a billion there, pretty soon, you're talking real money."


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COMMENTS (6 to date)
php mysql consultant writes:

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Rob Sperry writes:

You people need to back off of this criticism of the government, its unpatriotic. Besides, I got an official letter from the treasury indicating that if I will support the plan that I too will get 7 billion dollars in bail outs!

(reads fine print)

Arg that was Zimbabwean dollars..

Milky Way writes:

Bryan, what's your point?

It's not easy for voters to fight. They must fight on one issue together to make their voice heard. This, oh my God, is Chairman Mao's teaching. And it's every serious military leaders' teaching. What the Hell is your point? The Congress is advantaged? Big News?

I thought you know the dynamics of politics. Are you suggesting voters are stupid? Or what?

If this is not you developing a knee-jerk reaction to voters' supposed "ignorance," then I offer my apology in advance.

The Cupboard is Bare writes:

I'd heard the carmakers were wandering around down in D.C. I figured they'd manage a quiet deal amid all the ruckus.

Methinks writes:


Well, if the loans are repaid, you might argue that it's not a bailout because no federal outlays were involved.

What is wrong with people?? After this whole financial "crisis", we're still meant to ignore risk? What is the expected return? I assure you, it's negative.

Daniel Morgan writes:

@Methinks

I think it's safe to guess that if the expected return were positive, then we wouldn't need the government to do it.

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