Ed Hall
With the United States entering a recession after the mortgage meltdown that began in 2006, the auto industry was experiencing considerable difficulty by 2008. General Motors was the closest of the big three to bankruptcy, followed by Chrysler. Ford weathered the storm a bit better than its two rivals. In November 2008, GM approached Congress and asked for a “bridge loan” to help the company return to profitability. GM needed $10 billion immediately, $25 billion for the short term, and $700 billion overall to stay in business. Democrats were generally on board while Republicans were skeptical.
The most skeptical of the Republicans was Alabama Senator Richard Shelby. On November 17, the New York Times quoted him from an interview on Meet the Press, “I don’t believe the $25 billion they’re talking about will make them survive. It’s just postponing the inevitable.” The following day, the Times quoted Shelby again, “I do not support the use of U.S. taxpayer dollars to reward the mismanagement of Detroit-based auto manufacturers.”
According to usdebtclock.org, the U.S. national debt was over $10 trillion in 2008 and steadily growing. Therefore, government’s mismanagement of the public treasury is far worse than the management of the auto companies. The United States government eventually gave loans to both Chrysler and GM, and both carmakers returned to solvency. The U.S. government continues to receive loans and has not balanced its budget since the Clinton Administration. Hall suggests that Congress accusing industry of being bloated, over-extended, and out of touch is “the pot calling the kettle black.”