I think the planned bailout of the automobile industry is an awful idea. Robert Reich thinks it is a good idea. But Reich is at least principled enough to worry that the way the Bush administration plans to handle the bailout — after Congress already rejected attempts to craft such a bailout — borders on being illegal,
But I’ve got to tell you, I’m deeply troubled by what I hear is the administration’s likely decision to give them a bridge loan, when just last week Congress said they can’t have it.
Call me old-fashioned, but I believe in democracy. And under our Constitution, Congress is in charge of appropriating taxpayer money. If Congress explicitly decides not to appropriate it for a certain purpose, where does the White House get the right to do so anyway? By pulling the money out of another bag? That other bag, by the way, called the Troubled Assets Relief Program, or TARP for short, was enacted to rescue Wall Street, not the automobile industry.
. . .
If it’s a slush fund, everything’s arbitrary. I mean, why autos and not, say, state and local governments? They’re running short about $100 billion this year and as a result are slashing public services, including the nation’s schools. Even as it is, TARP is shrouded in secrecy. The Treasury has burned through about $335 billion so far, and no one knows exactly how or by what criteria. Why, for example, did it set tough conditions on some banks while giving Citigroup the sweetest deal imaginable?
Unfortunately the incoming administration seems to be just as clueless as the outgoing one when it comes to economic and financial policy.
