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U.S. Congress more generous to Iraq than American automakers
Australian News.Net
Sunday 7th December, 2008
It is a cruel irony to Americans that the Congress that was so quick to commit to an invasion of Iraq, which will cost up to $3 trillion, is procrastinating over a rescue plan for it’s country’s own automaking industry.
The cost of Iraq in direct terms is in the order of several hundred billion dollars, with some parties forecasting the overall cost, including indirect funding, to ultimately come in at $3 trillion.
President-elect Barack Obama repeatedly during the election campaign for the presidency made the point that Iraq was costing $15 billion a month.
For a Congress that failed to properly scrutinize the Bush administration’s mission to invade and occupy Iraq, and failed to oversee the war torn country’s reconstruction program, it is taking a closer interest in blocking an urgent revival program for the nation’s three biggest automakers, which unless it acts soon, will result in the industry’s deconstruction.
On Friday night Chrysler Inc., engaged bankruptcy attorneys Jones Day to prepare the way for the firm’s likely path into Chapter 11, as time is running out for the struggling automaker. General Motors is also considering plans for bankruptcy as the Congress continues to deliberate. Industry analysts say the failure of one or more of the big three could result in the loss of millions of jobs throughout the U.S. economy, as manufacturing, spare parts production and distribution, car dealerships and regional economies are dependent on the viability of the automakers.
As one blogger put it on Nashville’s City Paper:
“Does congress not realize the number of jobs and the amount of money connected to the auto industry? Take Spring Hill. There are the auto workers, the suppiers of parts and service to the factory, the suppliers of parts to the suppliers, the suppliers of raw material to the suppliers, the owners of restaurants and shops in the area, the suppliers to the shops and and restaurants, on and on. All would die if GM dies. All of these businesses and their employees pay taxes... not if GM dies. Do some math and see if Spring Hill as a municipality could survive. And this scenario plays out in town after town all over the country. If the auto companies go away, hold on to your hat. Depression WILL hit this country not to mention, any car someone might buy, the profit goes to Japan or somewhere else. You would not be able to buy an American car even if you wanted to and who says the car prices won't go sky high. You would pay whatever the Japanese say. It will be just like oil is now... we don't have our own and this country is headed toward becoming a third world country. We won't make anything and we all just become consumers. Very scary.”
Over the weekend it appeared an emergency assistance package of half of what the automakers were seeking may be approved on an emergency basis – but the details have yet to be worked out. If secured it would amount to little more than one month’s funding of Iraq.
The amount currently being considered, $15 to $17 billion equates to little more than 2% of the $700 billion Congress approved for the banking industry.
When Congress approved $162 billion in additional funding for Iraq and Afghanistan in June this year the Senate vote for the package was 92 to 6. The funding was to cover the cost of the wars until the new president takes over. The spending bill took the amount Congress has directly provided for Iraq to $650 billion, and for Afghanistan $200 billion.
Several U.S. firms with ties to the Republican party and the Bush administration have benefited from non-compete tenders to the tune of hundreds of billions of dollars. It must come as a blow to the workers in the auto industry throughout the country, that so little regard, so much scrutiny, and so much time is being used to vet what everybody in America knows: the auto industry needs help, and it needs it now.
It seems Detroit is another New Orleans when it comes to getting the Federal Government’s attention. If news reports that the automakers request for $34 billion is likely to be halved in any assistance approved, it will be like the initial response that New Orleans got after Katrina.
It’s a pity Detroit doesn’t have weapons of mass destruction.
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