Congress took less than 72 hours to guarantee $306 Billion to Citi Group's liabilities so that Citi doesn't goto sleep.
This comes in addition to the already guaranteed $750 Billion given to Paulson as a blank check to prevent a "armageddon", and to "prevent troops deployed in streets".
Well of course, The Decider, supported him wholeheartedly since it involved bailing out his favorite friends: The Rich.
Of Course, US Newspapers have listed out the blunders Paulson did in bailing out banks and AIG...
But the topic on hand is the Auto Makers Bailout. Seeing their non-friends in Banking getting rescued by a Government running with money in their hands and forcibly stuffing the same into the banker's mouths, even when they refuse to take the money and tell Paulson where to stuff it, GM, Ford and a sceptical Chyrsler jetted into Washington in style on their private jets and begged Congress in their $10,000 Armani suits for bailouts and threaten job losses if not bailed out.
Congress wanted to know two things:
1) Would the car maker CEOs settle for $1 pay as a condition for bailiout: to which GM's CEO Mullally replied: "Iam good where am." Meaning he refused to reduce his salary.
2) Would the car makers sell their private jets right now and travel back by commercial flights: to which they refused.
Result: congress threw them out.
Now, there's the bug:
How come congres lectures Auto Makers, while it bails out AIG which goes and spends it on a HUGE party for its top executivs and does it again anonymously when found out.
Congress didn't say anything and neither did Paulson.
BUT, it wants Auto Makers to sell their shirts when they come begging for 1/10 of the money donated to banks.
Two factors are necessary here to consider a bailout:
Banks like Citi were RESPONSIBLE for their current financial fiasco they are in. Their preference of short-term profits over long term growth resulted in this.
Auto makers are not responsible for the price of oil shooting up rapidly and going down just as such. Of course congress states that 1970s should have taught them a lesson. True. But then 1907, 1929, 1987 and The Trillion Dollar Hole should have taught the Banks lots of lessons.
But congress does not criticize Banks.
Because banks bankroll congressmen with huge campaign donations. Auto Makers don't.
Plus, ALL congressmen after retirement set up their shops with Banks. None of them goes to work for Ford or GM.