Barney Frank: It Would Be Biased Not To Give Auto Industry As Much As The Financial Industry
During an interview with NPR, Democrat Rep. Barney Frank suggested that the auto industry bailout could end up being four times larger than what is currently being proposed. Because giving companies like AIG more than companies like General Motors would be biased.
Call it “affirmative bailout action” for a blue collar industry.
But let me ask you about the first thing you said, Congressman, because you said you don’t think $25 billion is enough.
Right, I’m trying to explain to you how it works.
They get $25 billion — the federal government would be in the first position to be repaid. We will come ahead of the debt holders, the shareholders, etc. They file this plan on March 31. If, on March 31, the president does not believe that this is going to get them the viability with energy efficiency cars, they have to repay the loan; they get no more money. If they can show by March 31 a plausible way to go forward, then we would consider giving more money, again, under equally stringent conditions.
So this could be $50 billion, $75 billion, $100 billion?
Well, [insurance company] AIG, which I don’t think anyone would think was as important to the American economy as the auto industry … got $40 billion just now to make it up over $100 billion. To some extent, let’s not have a white-collar/blue-collar bias in our public policy. You know, those who say, hey, go bankrupt so you can cut back on what the unions have won — the unions have already made some concessions. But, you know, we’ve had enough anti-union activity, and enough increase in income inequality in this country. I don’t want to set a precedent that bankruptcy now is a way in which you undo what gains unions have been able to hold on to.
Notice that Frank repeats his admission that bailing out the auto industry is really about bailing out the unions. But here’s the thing: If the unions are killing the auto industry in the same way Ford and GM’s business decisions are killing it, why do they deserve to be bailed out any more than Ford and GM?
Thanks to union contracts, companies like General Motors have to keep giving a paycheck to employees they have no work for. That’s right. The automakers have to pay thousands of employees billions of dollars in wages in benefits to essentially sit around in a room all day and not work.
This is the sort of nonsense Barney Frank and his cronies are bailing out.