Bailout Deal gives U.S. Government a stake in GM, Chrysler

Well just as I’ve been saying….as soon as the government could figure out a way to get something out of the Big 3 bailout they’d get it.  So now the government will have a stake in the auto industry and the banking industry because of the government handouts in both bailouts.

At the heart of the overhaul is a controlling role for a presidential appointee, quickly dubbed “car czar.” This position – which is not expected to require Senate confirmation – is tasked with authorizing bridge loans and setting benchmarks for measuring progress.

“In exchange for bridge loans, the auto industry would give government an ownership stake, or warrants for company stock, and control over the terms of retrenchment”

A lot of people won’t agree with me, but now that changes our economy and moves it toward a fascist economy since the government will be involved in both industries a lot more than just regulation. In Fascism, private individuals retain control over the Means of Production, thereby ensuring that the key element which makes Capitalism work so well is kept in place. However, the Government intervenes to control how much is produced of any item, how many competitors can be making the same item, and how much they can charge. After the banking bailout was done, they announced that the money was going to be used for takeovers of sound banks and the bad debt would just be bad debt…Treasury Secretary Henry Paulson said Wednesday the $700 billion government rescue program will not be used to purchase troubled assets as originally planned.

Analysis: Auto bailout would expand government control and take step toward nationalization

WASHINGTON (AP) — It was hard enough to get policymakers to finally utter the word “recession.” The next challenge may be to get them to say “nationalize.”

It’s not a word congressional Democratic leaders or the Bush or Obama teams like to use. Yet that’s pretty much what the government takeover of big chunks of the economy amounts to, at least in part.

Actions taken by the Democratic-led Congress and the outgoing administration — moves generally supported by President-elect

Barack Obama — already have reversed decades of deregulation and privatization that Presidents Ronald Reagan, George W. Bush and George H.W. Bush all championed.

Washington has taken a direct stake or orchestrated the takeover of banks, seized control of mortgage finance giants Fannie Mae and Freddie Mac, taken a controlling stake in insurer American International Group and now is poised in the final weeks of Bush’s term to throw a lifeline to troubled Big Three automakers.

Supporters of the auto bailout insist their intent is not for the government to be running car companies. But it’s clearly a big step in that direction. It would take some decision making away from automakers and give power to a government overseer.

Congressional Democratic leaders and the White House have negotiated a bill to provide $14 billion in emergency short-term loans for Detroit and create a “car czar” to be named by Bush to dole out the loans and oversee restructuring. Democrats hope to pass it by week’s end, but a determined band of congressional GOP foes could still run it into a ditch.

The government has no business managing car companies, even if temporarily, argued Sen. Richard Shelby, R-Ala. “It’s very un-Republican,” he said.

Nearly two years after Bush suggested that Detroit produce “a product that’s relevant” rather than looking for a possible Washington bailout, the president threw his support behind the emergency loans — after wringing a concession from Democrats that the money would come from an existing program to help the industry retool its plants to make greener cars.

Despite Bush’s repeated calls for more free-trade agreements and less international protectionism, the bailout plan would only benefit historical U.S. automakers, not Asian or European ones with plants in the United States.

Advocates of lifting the government’s heavy hand over private business say they are alarmed by the auto plan and other aggressive government moves to impose more regulation, even if the motivation is to keep the recession from deepening.

“The economy will eventually recover. I think policymakers spend too much time thinking about the short-term,” said Chris Edwards, director of fiscal policy for the libertarian Cato Institute. “They should focus on the long term and how do we get investment back to this country.”

Read the entire article at the Chicago Tribune