Posted by Matt Hawes on 12/19/08 10:32 AM Last updated 12/19/08 10:36 AM   [Newer: "Money, Banking, and the Federal Reserve"] [Older: Slow economy doesn't stop congressional pay raise]

President Bush announced $13.4 billion in emergency loans on Friday to prevent the collapse of General Motors and Chrysler, and said another $4 billion would be available for the hobbled automakers in February. The entire bailout is conditioned on the companies undertaking sweeping reorganizations to show that they can return to profitability.

Read the rest of The New York Times report here.

One of the president's arguing points during his press conference earlier today was that the nation wouldn't buy products from a company who had filed bankruptcy. So, that is supposed to mean that we're more likely to buy from a company who has just begged and pleaded for taxpayer funds to continue hobbling along until they need billions more? Yep, that really sounds like a company I can put my trust in.

The people's thoughts were expressed when the auto bailout was shut down in the Senate, and this decision by the administration fits in nicely with all of the other times they've ignored Congress during the past eight years.

Posted 12/19/08 10:47 AM jr2334 San Marcos, TX

Good job congress on delegating your responsibility to appropriate money. Hey, but at least you guys get a pay raise. I'm not exactly sure for what, but if I could do nothing, get re-elected, and give myself a raise, why not? We need to wake up this country, its getting pathetic. Start talking to people, get the word out, anything. We all blame government, but we the people need to start doing something to keep the clowns out of office.

Posted 12/19/08 10:49 AM zero entity Becker, MN

It's no surprise to anyone that this was coming. Do note that Ford has not taken any tax-payer money (as of yet) and I feel they should be given some props. It is probably a good business move at this point to not take a bailout, I think Americans will respond by being more inclined to buy from a company that has not been infused with government money.

Posted 12/19/08 11:04 AM sweetliberty San Rafael, CA

I actually heard on the radio this morning that a recent study published by (I believe, don't quote me on it) Morgan Stanley indicated that 95% of consumers would still purchase a vehicle from a carmaker who had filed bankruptcy and restructured -- just like Delta did. People still fly Delta. I think one of the more insulting things about all these bailouts is that they're all based on completely unproven theories and hopes: the theory that without them, the economy would implode, the theory that consumers won't buy a car from a company who's filed chapter 11, the theory that this money will stimulate the economy, and the hope that everything will go back to normal (read: bubble). These theories and hopes are completely baseless and unfounded, yet We the People are supposed to just accept them as fact.

Posted 12/19/08 11:07 AM hartman Fishers, IN

To the American people I ask: Had enough?? http://federalfallacy.com

Posted 12/19/08 11:07 AM AngelaTC Fenton, MI

Gee! I wish there was somebody in the House who would sue to stop this on the grounds that it is unconstitutional...

Posted 12/19/08 11:10 AM pensotti Reno, NV

I especially liked this quote from Bush on CNN: "I have abandoned free-market principles to save the free-market system." I don't even know where to begin.

Posted 12/19/08 11:13 AM Ryan Sheets Louisville, KY

There have been surveys that have turned up results on both sides but it's all in how you ask the question and who you ask the question to. For the most part dumb people aren't going to be associating with Morgan Stanley so I can see where there may be some bias in that particular survey. Other surveys have have overwhelmingly opposite results. My guess is Americans would not stop buying Chryslers or GMs because of a bankruptcy, but surveys seem to be up in the air on this one. With all the power Bush has now passed on to Obama I'm very worried. If they can strike out the fifth amendment without issue, how about the 2nd? Terrorists can carry guns after all, you know? The question they should be asking is "would you buy from a car company that stole your money?", that's the real winner.

Posted 12/19/08 11:14 AM ifc69 Midland, MI

I'm sure this authority was clearly given in the 400 plus page bailout document. It was probably right there next to the part about boyscout arrows. On a serious note. Suppose that people really wouldn't buy a car from a manufacturer that was in bankruptcy. Are we not allowed the right to make that choice?

Posted 12/19/08 11:17 AM kwalter Tampa, FL

The only way to stop the bullet train wreck that is Washington (and for that matter all other US politics) is to go after those who have bought our politicians. The UAW is already petitioning Obama to remove "unfair" policy from the Bush plan. Write to everyone you know. Urge them not to buy cars from the Big 3. Even if sales only dip to 5-6million units this would be enough to force them into true panic and likely bankruptcy or liquidation. The government - short of instituting Soviet style mandates requiring citizens to buy the Big 3 - would be powerless. Something to think about.

Posted 12/19/08 11:20 AM Ryan Sheets Louisville, KY

AngelaTC, Me too. It's too bad the Supreme Court has now said that average citizens (the Obama eligibility case) are not allowed to bring things to them or else I'd probably try it myself.

Posted 12/19/08 11:22 AM Ryan Sheets Louisville, KY

Regarding a big 3 boycott, I'd still buy from Ford on the grounds that they at least had the honor to not accept a personal bailout. I'm happy with my Mustang.

Posted 12/19/08 11:38 AM Andrew Sica Woodbury, CT

Of course, he took the opportunity to basically claim that in times of crises, the free market doesn't apply. Thanks, jackass.

Posted 12/19/08 11:51 AM LeeDobbs santa barbara, CA

This has nothing to do with cars or jobs the money goes to Cerberus Capital Management and the private equity arm of Citigroup All the same players. http://money.cnn.com/2006/04/03/news/companies/gm_gmac/index.htm

Posted 12/19/08 12:02 PM StatusQuoJoe Phoenix, AZ

Crisis management has been running this country for years. Reactionary thinking has dominated thought, why should we expect anything different? What's next I wonder, Paulson getting his hands on the remaining $350 billion to "rescue" the derivatives racket, I mean mortgage industry?

Posted 12/19/08 12:07 PM sunshine Washington, NH

I guess they'll be taking my Subaru from my cold, dead hands... The people have already voted by saying no to oversized hemis and disposable Chevys. Why must we pay with our tax dollars for a "loan" that will be called if they don't do what they had the power to do 3 years ago? Yeah, I'm sure they'll have the money come March. They've already shown us how good they are at managing money. On the upside? I won't be ashamed to drive my husband's F150.

Posted 12/19/08 12:12 PM zero entity Becker, MN

As far as if people would buy from a bankrupt company, I would guess after 1 month or so the public would forget. People would continue to buy from them. Delta was a good example, I bet if you polled Americans, most of them would not even realize Delta had filed for Ch. 11 just a few years ago.

Posted 12/19/08 12:22 PM DA521 Fair Lawn, NJ

pensotti, Like bush ever had "free market" principles. How insulting is that to true "free market" advocates. This is what I mean when I say that the Conservatives are more dangerous to freedom and "free markets" then the Liberals. They perpetuate this myth that they stand for "free markets" when in fact, they stand for Fascism and Socialism. Since the vast majority of our intellectuals don't understand markets, when they [conservatives] fail with their "big government" schemes, everyone blames the "free market" priniples of the conservatives. This is such an insult to those of us who truely understand and value the free market system. I think we should distance ourselves as much as possible from the Conservative movement, and for that matter, the Republican party (except for Ron Paul and anyone who truely believes in "free markets" and Individual Rights)

Posted 12/19/08 12:31 PM sunshine Washington, NH

Any guesses as to who will be next in line with their hand out?

Posted 12/19/08 12:47 PM AKJones Camp Hill, PA

Just a comment on some great videos explaining the bailout problems. Check: http://www.khanacademy.org/ (under credit crisis) This one helps to explain the basic banking problem (and why the solution won't/didn't work) http://www.youtube.com/watch?v=R528WbVdC0I Please add this to the education area. Understanding the finances is key to our leadership.

Posted 12/19/08 12:54 PM dkhutch Denver, CO

Once again Washington thinks it knows best... there is no more true conservatism or liberalism only corporatism.

Posted 12/19/08 1:18 PM C00kieM0nster Oxnard, CA

Get ready for the Amerikan Trabby :) SweetLib- Let's just call it what it is...a big fat lie. They know enough of Amerika will buy their BS, and the rest will continue in sleepy silence because they don't understand how embezzling public money into the hands of the puppet masters affects their lives. They will just be happy to have a job. Govt as much to blame as anybody for the mess domestic auto makers are in. Perhaps more so. None of this money will help unless the govt steps away COMPLETELY.

Posted 12/19/08 1:54 PM fadestyle Walnut Bottom, PA

GM has to know even if they get our money to keep them a float we do not have to buy their cars. isnt there an old saying "you can lead a tax payer to a GM car but he doesn't have to buy it"?

Posted 12/19/08 2:06 PM cybloo Cedar Falls, IA

@fadestyle: Yeah, but maybe they can give a tax break to new buyers. Quite frankly, I'm not surprised. I was never going to buy from those companies and now I never will. I hope my lil' Honda lasts forever!

Posted 12/19/08 2:18 PM JFeldman Kearney, NE

Of course the best answer is to just put tariffs on Hondas and Toyotas... Oh wait, maybe you can't do that to cars made in America.

Posted 12/19/08 2:24 PM Aarphill Bloomington, IN

"One of the president's arguing points during his press conference earlier today was that the nation wouldn't buy products from a company who had filed bankruptcy" So I guess people just stopped taking air flights on the several companies that filed bankruptcy?

Posted 12/19/08 2:26 PM pensotti Reno, NV

DA521 I would agree. The republican party hasn't stood up for free markets for some time now. The original conservative ideals have been lost. That is what brought me to C4L. I am a new member. I am totally fed up with the direction our government is going. My question is this, what can we do to effect a change? Talk, debate and education is needed, but what actions can we take on a daily basis to effect change? In searching around on this site I see a lot of good discussions and a lot of very good information, but what I don't see are action plans. I'm here to help just not sure how.

Posted 12/19/08 2:28 PM AngelaTC Fenton, MI

"One of the president's arguing points during his press conference earlier today was that the nation wouldn't buy products from a company who had filed bankruptcy" ...and the insurance companies that sell after-market warranties saw their next big marketing campaign trashed.

Posted 12/19/08 2:54 PM JFeldman Kearney, NE

Pensotti: Recruit, Recruit, Recruit. It's all about getting the grass roots started. Also we need to refine the message. I think our biggest problem is that our message is not easily broken down to soundbite form, like the much simpler messages from the left and Republicans. But we have to build the foundation before the tower of power (sorry that is so stupid sounding) can sit on it. It isn't going to happen overnight, but it's a job worth doing.

Posted 12/19/08 4:03 PM StatusQuoJoe Phoenix, AZ

Pensotti and JFeldman, to add in your discussion if I may it seems to be an issue of hopelessness and idleness. Obama offered hope in his message whether it is real or not is not the point, what is the point is that he offered it and it sold to the public. The cost for a person was a vote and the hope that someone else would take care of the problems for them. People are feeling hopeless, everything is so huge and immense and the problems are daunting. Yet we have enjoyed creature comforts (relatively good standard of living) for so long that people are literally couch potatoes, they are planted and although fearful and feeling overwhelmed the thought of action or movement is uncomfortable. Its sort of like Newtons law that a body at rest tends to stay at rest unless acted upon by an external force. Really, I am starting to believe that people won't do anything while they are still relatively comfortable. Take away the comfort zone and well they might be inclined to actually do something. We need to plant the seeds of liberty now in as many people as we can in preparation of that day, when the comfort zone is broken. If we don't we will end up like all the other cultures that were overwhelmed by the "isms" like communism, socialism, fascism, etc.

Posted 12/19/08 8:41 PM oatriumph Midwest City, OK

I think that the "actions" that need to be taken are actions of non-violent disobedience. Many here, and elsewhere, complain of the inaction and the fear and the inertia of the populace, but this is and always will be, and should not be fought against. Light has a way of shining in darkness, and I believe that instead of trying to start a movement in mass, liberty minded people should concentrate on calculated, principled, public action. So for example, I believe 50 people handcuffed around a state capitol protesting and subsequently arrested and jailed do more for individual freedom than 50 going door to door about the evils of the bailouts. I know that a private mint was busted and all of its precious metals were taken (liberty dollar, I think). Legal tender laws criminalize contracts requiring payment in anything other than federal reserve notes. Withholding income taxes from our paychecks prevents any of the "law-abiding" laborers from getting in on some lucrative inflation and using those funds to exercise power over their lives. Until these laws are actively DISOBEYED, how can we ever hope to have them changed? I believe that we will only experience change when we start to rebel. The revolution will start when we revolt. But then again, to each his own. Peter Schiff has obeyed the laws (from what I know) and he is on TV. His father has disobeyed they laws and is in jail. But they both share that strong, principled action regardless of the common sentiment of their peers.

Posted 12/19/08 9:57 PM PopeDonzel Holland, OH

I'm a big fan of General Motors' vehicles.

Posted 12/19/08 11:11 PM danielvalley Bangkok, Thailand

The Plan: Destroy the dollar,all the while buying gold. Surprise!!!! we have a new world reserve currency that is gold backed and nobody can afford it. Obviously its a bit more involved but getting to the point. Is it any wonder they allow Paul an Peter to do so many news spots.....they are the best possible propaganda....they have integrity and tell the truth of the matter.( its a game ....how long can they keep the dollar in the air with a machinegun.)The Fed just has to be there to present an opposing view( until the dollar dies that is) regardless of its merit or validity cause they never have to prove anything they say or do anyway......its just too easy.....why do you think Bernake doesnt look worried when Paul questions him....he enjoys it I think. He gets a sadistic thrill from it, all the time wanting Paul to get even more blunt with his questioning wanting it to go to the next level....hes tired of talking to the other desperate idiots in congress....they present no challenge.They wait to be thrown a bone to covet as proof that they are doing the right things for the people. ARE WE TIRED OF THIS @$%#! OR WHAT? We are fast running out of time.......Happy Holidays Comrades.

Posted 12/20/08 12:10 AM Shepinator St. Robert, MO

Don't look at me...I voted for Ron Paul. And... Don't look at me...I drive an AMC. And will continue to do so for another 20 years. Best vehicle ever..made from American STEEL.

Posted 12/20/08 05:56 AM JFeldman Kearney, NE

Status Quo Joe, I agree with almost everything you said. I would like to add that in addition to the comfort level, I have encountered many people who simply aren't intelligent enough to understand the point I try to make. Take Obama voters for instance, they are very passionate, and yet have no idea what he stands for, or what is even going on in Washington. I'm not even sure what he stands for to be honest. I think he might not know as well. He sais he is for change, which is kinda funny since all he has done so far is continue Bush's policys from everything from the war to the bailouts. The Republicans have told me that he is a communist looking to socialize all industry and redistribute the wealth, and while I'm inclined to belive that he is for those things to a point, it seems so is Bush and McCain. I don't know how you can argue against someone who won a popularity contest with new voters who don't understand anything. I start going on about hyper-inflation and the destruction of our currency and the devaluing of our savings and the people I talk to get a glazed look in their eyes. I usualy get something about Sarah Palin's wardrobe or Obama's earmarks in return. I need to find a simpler message, we need a simpler message for the sheeple who spend their days watching E and MSNBC. Numbers win elections, and in my humble opinion we should be organizing for the 2010 elections to get the vote out. I envy the unions, in that there will be hundreds of Union workers going into black neighborhoods to give rides (and other perks) to people who are willing to go into a booth and pull a Democrat lever. The Republicans have got the the evangelical christians mobilized over abortion, even though they haven't done a single thing to slow or stop it in their entire time in power over the past 20 years. We have 95,000 really smart people, but I can promise that all of our votes will be wiped out by the union mobilization in Detroit. I think the bailouts could be a sticking point. Both the Republicans and Democrats are for them while the American people are against them. If we raise some money, find some candidates, and pound this message, maybe, just maybe we could grab some more congressional seats and hopefully a few Senate seats as well. I know my state has a Senator that is ripe to be knocked off the next time elections roll around.

Posted 12/20/08 06:42 AM chuckmc Ironton, MO

I would direct us to the bank bailout as a model. They are near spending 50% of the money- but there have already been reports written that the government is already one full month behind in its accounting of how the money is being spent. In other words, it is being spent completely without oversight. Bear in mind that the good Chief Embezzlement Officers at Goldman Sachs, despite all the hoopla and criticism- did, in fact, give themselves their bonuses. These are bonuses for what? Doing a good job? Putting their company on solid profit footing? The answer is simple enough. We are seeing the looting of the American Taxpayer. We are seeing the grandest con game ever created. The Chief Embezzlement Officers at Gm and Chrysler, appearing in their private jets to beg for money (as in let them eat cake attitude) will do the same as the banking CEO's. Take the money and use it to fund their own fortunes and pay for entitlements. The CEO of GM, when asked if he would cut his salary for his company said "I like my salary where it's at." (As in $21,7 million). The end result is simply a delay of what will eventually occur- not because of anything other than the fact: they have ignored the advice of the last 15 years, and continue to make a substandard product that no one wants. They will go bankrupt. Read the current issue of Newsweek for the comparison of the foreign car manufacturers (aren't they really American now?) vs the lumbering oafs at the Big 3. This is what competition in the free market is all about.

Posted 12/20/08 06:58 AM chuckmc Ironton, MO

From the Chuckmc book of Economics Common sense 101. First axiom: If a company is solid, is growing, is innovative, is making a product that people want.....people will line up at the door to be a part of it. It will have no need of charity. Second axiom: If a company needs charity, it is dead. Throwing good money at it, will only prolong the enevitable. Third Axiom: If history teaches us anything, over and over, it is that government cannot be trusted to handle money I have posted this once elsewhere- I hope people don't mind. I took college economics. Know how much it helped me in the real world? Nada, Zilch, zero. My Dad used to say "You put 10 economists in a room with a question- you'll get 10 different answers." Correct me if I'm wrong- had Bernacke ever run a business? He's just all fluff and theory...and we know what damage Paulson is capable of as past CEO of Goldman Sachs...(or was it Bear Stearns?). Coomon sense has flown out the window- we are in deep....trouble.

Posted 12/20/08 08:23 AM Rick Vandeven Chaffee, MO

Shepinator, I love AMC's! My first car was a 1962 Rambler I found for $700 in 1987. 30,000 miles! There is a lot of discussion amongst the fans of the old American independent automakers (Packard, Studebaker, Willys, Nash) that if Packard would've merged with Nash in the 50's instead of Studebaker that that company would not only still be around today, but would most likely have bought Chysler decades ago! This bailout buisness is bad enough for us free market types, but it is even more of a heartbreaker for us who understand what the Amercian automobile industry used to be.

Posted 12/20/08 2:59 PM mgmoose Getzville, NY

DON'T BE FOOLED.... It's NOT a "BAILOUT," as they call it. it's a BUYOUT !! BIG DIFFERENCE !! The wealthy are socializing private industry (appoint government official to run or "oversee") and funding it with our citizen's dollars by raising taxes like gasoline tax that we pay for everything is more expensive and will funnel into our government which intends to rule us by having the resources we need, have power over us once all the industries become socialized, we will have no choice but to go to government to ask for our most basic needs !!! God forgive us for giving them the power and not seeing this in advance.... is it too late? Many are putting on their seat belts and waiting... when it's probably best to act, not wait. God help us for a big adjustment and possible transformation is beginning in this country. Let's hope we have the courage to speak out, when the wealthy have us believe that this patriotic action of speaking out is unpatriotic. This is no different then when the public had one of the largest anti-demonstration marches to avoid going to war, they they go to war and state that anyone who does not support it is unpatriotic for not supporting our troops that are ALREADY THERE, too late, now support them !!??

Posted 12/20/08 3:57 PM Zeke D Grandfalls, TX

New member, as in finally registered. Hi! Serious question for better minds. Under what authority did the Executive make this auto bailout that is in direct conflict with the Legislative? I am aware of USPD-51 and 50 U.S.C. 1701-1707. The 15 current "national emergencies" do not relate and are not relevant to the national economic issues or the automakers. Seems the expanded powers of USPD-51 must be relevant to a declared national emergency. The last national emergency I found was adding North Korea to the list. Not exactly relevant to Detroit UAW. I might be completely off base, and that too I would like to know.

Posted 12/20/08 4:40 PM Zeke D Grandfalls, TX

New member, as in finally registered. Hi! Serious question for better minds. Under what authority did the Executive make this auto bailout that is in direct conflict with the Legislative? I am aware of USPD-51 and 50 U.S.C. 1701-1707. The 15 current "national emergencies" do not relate and are not relevant to the national economic issues or the automakers. Seems the expanded powers of USPD-51 must be relevant to a declared national emergency. The last national emergency I found was adding North Korea to the list. Not exactly relevant to Detroit UAW. I might be completely off base, and that too I would like to know.

Posted 12/21/08 01:31 AM Gardentoolnumber5 San Diego, CA

Wait, your looking at this all wrong... We'll have a "Car Czar" and everything will be fine. hahahha When we have enough Czars we can then proceed with the revolution of removing, 1. an emperor or king. 2. (usually cap.) the emperor of Russia. 3. (often cap) an autocratic ruler or leader. -The American College Dictionary- 1,2, or 3, it doesn't matter which they claim to be. Why wait? We no doubt already have to many Czars.

Posted 12/22/08 10:11 AM sunshine Washington, NH

Question... I can't find the place where you post questions, so I'll ask here. Did the Senate actually vote on this or was it shut down prior to a vote? If they voted, I would like to see how Judd voted. I wrote to him before and I would like to either thank him or rail him out. Also, please tell me where I'm supposed to post questions. I clicked on the link in my daily e-mail, but when I tried to post a question I was booted out of my login.

Posted 12/23/08 12:04 AM Gardentoolnumber5 San Diego, CA

Hi lauried, not sure if you received a reply. The Senate voted down the bailout and my understanding is the fearful leader used a portion of the TARP funds.