The lightning fast way in which Paulsen and Kashkari (carrying cash out of the Treasury) have doled out $250 billion to megabanks stands in poignant contrast to the fact that most of the $125 billion dedicated to Hurricane Katrina relief still has not been sent to the people of the Gulf Coast.
A group of New Orleans residents had to file suit against the federal government last week to push that relief out faster, after three years.
However, the new Katrina is the economic hurricane bearing down on Detroit, which has had more than enough bad news lately. But once again, the Bush administration feels that the auto industry is expendable, one because a large proportion of the workforce is African-American and because it is unionized.
All Americans have heard of General Motors, Ford and Chrysler. Most couldn’t tell you what American International Group is. Somehow, without any input from elected officials, AIG is entitled to $140 billion of taxpayer money, allowing them to proceed with paying $503 million in bonuses.
But conservatives begrudge auto workers for making $75 per hour, which is about the minimum someone would need to make to pay the inflated housing prices for the past few years, the rising cost of college tuition or copayments for health care.
That’s why many of them, like Thomas Friedman on Meet the Press today, say crassly, well, just let the Big Three collapse. We don’t need Detroit, they say.
The contrast could not be more stark, and I hope the working class union members thank heaven that enough of them overlooked hysteria to vote for a change in administration.
A preferable form of assistance to a bailout, which based on the track record of the bank bailout, might be shifted to foreign subsidiaries of the automakers, would be for the federal government to replace every automobile in its fleet with a zero-emission vehicle. The assistance would then be a purchase order, which could be actually financed by private sources and which would also have the benefit of keeping assembly lines open.
The government has done that for defense contractors for decades, giving them enough of an order to stay open in case the capacity is needed in an emergency.
To really impact global warming, this could be extended to local and state government vehicles as well.