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President Vows to “Collect Every Dime” of Taxpayer Funds that Helped Big Banks

The real issue is “brother can you spare a dime.”

by on Jan.16, 2010

During the past two years, more than seven million U.S. residents have lost their jobs.

In this week’s address, President Barack Obama proposed a fee on major financial firms to recoup – on behalf of American taxpayers – the $700 billion paid out in TARP, saying, “we want the taxpayers’ money back, and we’re going to collect every dime.”

The latest populist appeal follows well-known political tactics used by both Republican and Democratic politicians to shift the focus from their lack of action on resolving issues. And one of the real issues that is at the core of the Troubled Asset Relief program – TARP–  is that almost three-quarters of trillion dollars of borrowed taxpayer money was spent with little if any positive effect on job creation.

During the past two years, more than seven million residents of the U.S. have lost their jobs. Moreover, our manufacturing sector – a great creator of jobs and wealth – is in tatters from the lack of industrial policies that all other industrial nations have long had.

U.S. taxpayers are outraged, to put it mildly, over the billions in Wall Street welfare payments they involuntarily made, which are now being recycled to financial executives in multi-million dollar bonuses. A clear majority are also against the auto bailouts. The banking bonus bumble is made more outrageous with U.S. unemployment growing to levels unseen since the Great Depression.

The fact that GM in a Security and Exchange Commission filing yesterday revealed that it is paying one Wall Street consultant on its Board, Stephen Girsky, almost $1 million a year is going to raise questions and increase the anger of opponents of taxpayer bailouts.


Policy Debates!

In a deft political move that has policy implications, President Obama is now proposing a Financial Crisis Responsibility Fee that would require the largest and most highly leveraged Wall Street firms to pay back taxpayers for the federal assistance provided, so that the TARP program does not add to the deficit. Whether the auto companies are mired in this populist controversy remains to be seen. Moreover, the bankers and Republican party are not going to embrace this bill.


Teamsters Step up Criticism of Auto Bailouts and the Ongoing Attack on Middle Class Jobs

While Chrysler holds briefing, union pickets Italian Embassy.

by on Nov.09, 2009


Customer paying $800- $1,000 for delivery are charged much more than the average delivery cost of about $120 per vehicle.

While Chrysler CEO Sergio Marchionne was briefing reporters on his plans for turning around the ailing automaker last week, members of the Teamsters union were protesting at the Italian embassy in Washington D.C.

Shouting “Hey, hey, ho, ho, bailout bandits got to go” and other slogans, more than 200 people protested what the union says is Chrysler’s attempt to destroy professional carhaul jobs.

Teamsters Carhaul Division Director Fred Zuckerman delivered a report to embassy staff, who told him it would be forwarded to the Italian ambassador to the United States.

“Damaged When Delivered? How Bailed-Out Auto Giants are Ripping Off American Consumers,” is said by the militant union to look at the risks to vehicles and consumers when car companies use “cut-rate and inexperienced carhaul drivers” to transport new automobiles.

“We are today at the Italian Embassy because we are standing up to the Bailout Bandits,” Zuckerman said.

“Fiat Chrysler got $14 billion in American taxpayer money and we’re here to say we won’t allow them to use that money to restructure an industry in a way that destroys American jobs, increases the danger of driving on our highways, and hurts the American Consumer,” Zuckerman charged.

The delegation also delivered a letter from Teamsters General President Jim Hoffa to Prime Minister Silvio Berlusconi, the president of the Council of Ministers and the presidents of the Italian Senate and Chamber of Deputies.

Strike Now!

Strike Now!

In the letter, Hoffa claims that billions in taxpayer dollars on both sides of the Atlantic are not being used to establish a sustainable recovery at Fiat-Chrysler. Hoffa called on the Italian government to hold Fiat Chrysler and its chief executive, Sergio Marchionne, accountable for the company’s actions, which are “harming consumer interests, and destroying thousands of good paying jobs in the U.S. carhaul industry.”


Middle Class Declines as Unemployment Grows

With 10% unemployed, auto industry prospects remain poor.

by on Oct.05, 2009

We need to protect and create manufacturing jobs, not continue to shed them

We need to protect and create manufacturing jobs, not continue policies that eliminate them.

The recession wracked U.S. economy shed another 263,000 jobs in September, as unemployment rate climbed to 9.8%, according to the Labor Department’s monthly employment report.

The largest job losses were in construction, manufacturing, retail trade, and government.

This country has not seen a 10% unemployment since June of 1983, and since then we have shamelessly neglected the manufacturing sector, which creates real wealth.

The ongoing Great Recession – now the longest since the Great Depression– continues to take its toll on the auto industry as the Seasonally Adjusted Selling Rate (SAAR) in September fell to 9.2 million. Year-to-date sales are off 27%, no surprise since consumer confidence is badly shaken.

The political spin that only losing 250,000 jobs a month is an improvement when compared with 700, 000 sackings a month earlier this year rings hollow. Even if some slight economic growth is coming, 2009 will be a year in which a mere ten million vehicles will be sold, in an industry that was running 50% higher than that for a decade. The ripple effect through the economy now looks more like a tsunami.

Even government jobs are declining, in spite of the $787 billion “stimulus” package passed by the Obama administration earlier this year. As tax revenues continue to decline, even the government is forced to pare employment.

Unemployment rates for the major groups–adult men (10.3%), adult women (7.8%), teenagers (25.9%), whites (9.0%), blacks (15.4%), Hispanics (12.7%) and Asians was (7.4%) –showed little change in September.

The stark fact is that rates for all major worker groups are much higher than at the start of the recession.

Among the unemployed, the number of job losers and persons who completed temporary jobs rose by 603,000 to 10.4 million in September. The number of long-term unemployed (those jobless for 27 weeks and over) rose by 450,000 to 5.4 million. In September, 35.6% of unemployed persons were job-less for 27 weeks or more.


Obama: Without Auto Company Bailout, Depression

President refutes the slur "Government Motors" and says domestic automakers are a strategic U.S. industry.

by on May.24, 2009

President Obama

"Our auto industry is the foundation for economies all across the Midwest, and ultimately, for the country as a whole."

President Obama defended Federal help for the auto industry in an interview with C-SPAN aired on Saturday morning.

The aid has been under attack in various forms since it was establish by President Bush late last year when the U.S. financial system collapsed from its wild speculative practices, bringing the economy down with it.

As a result, current vehicle sales haven’t been at such low levels for more than four decades, and show no signs of improving this year.

In response to a question from C-SPAN political editor Steve Scully about “Government Motors” the President said, “Well, you know – look we are trying to help an auto industry that is going through a combination of bad decision making over many years and an unprecedented crisis — or at least a crisis we haven’t seen since the 1930′s. And you know the economy is going to bounce back and we want to get out of the business of helping auto companies as quickly as we can. I have got more than enough to do without that…”

General Motors Corporation confirmed late Friday borrowed an additional $4 billion from taxpayers to maintain adequate liquidity as the company undergoes what it calls an “aggressive restructuring.” Total U.S. Treasury funding received by GM to date is now $19.4 billion. The amount is paltry compared to the ongoing bailouts of financial institutions, but all told the bailout is now shaping up to cost taxpayers about $45 billion, and rising.

The President went on to say that both banking and autos are strategic industries that require strategic decisions and intervention from the government because of  the ongoing economic crisis.

“Our auto industry is the foundation for economies all across the Midwest, and ultimately, for the country as a whole and had we allowed GM or Chrysler simply to liquidate that would have been a huge anti-stimulus on the economy as a whole, and could have dragged us even deeper into recession or even depression,” President Obama said.

“Ultimately, I think that GM is going to be a strong company and we are going to be pulling out as soon as the economy recovers and they’ve completed their restructuring,” Obama said.

As TDB reported Friday, nearly 40 Senators, including both Republicans and Democrats, lent their names to an amendment to an appropriations bill, sponsored by Kay Bailey Hutchison, a Republican from Texas, that would have blocked federal aid for the two makers if steps weren’t taken to ease the pain facing close to 2,000 dealers GM and Chrysler intend to fire as part of their restructuring plans. The Republican Party claims to help smaller businesses, and dealers are big political contributors.    (more…)

Distressed Michigan Lines Up For Battery Aid

Taxpayer subsidies needed to spur electrification of autos.

by on May.22, 2009

GM pulled  the plu on EV1 in 1999 after fewer than 2300 had been leased at Saturn dealers after theee years.

GM pulled the plug on EV1 in 1999 after fewer than 2300 were leased at Saturn dealers since 1996.

The Michigan Congressional delegation is moving to lock up government money for building electric cars. Both Democrats and Republicans have joined together in pressing the U.S. Department of Energy for a large share of the $2 billion the DOE is preparing to distribute to support development of advanced batteries, electric motors and the electronic systems.

The Obama Administration and the green movement are claiming that electric cars will ultimately create jobs in the ailing auto sector as unemployment across the country continues to rise to record post war levels. This political talking point, repeated over and over again, is thus far a political promise that is not backed up by any data.

In a letter signed by all 17 members, the Michigan delegation asked U.S. Energy Secretary Steven Chu for special consideration.

“We are writing to express our united support for the full consideration of the applications submitted to the Department of Energy by some of the most innovative and knowledgeable firms, collaborations and individuals from Michigan, which is home to an unparalleled expertise and experience in deploying large-scale new manufacturing technologies,” the letter said.   

“The American Recovery and Reinvestment Act” included $2 billion for grants for manufacturing of advanced batteries, electric motors and related electronics for electric vehicles. The stated purpose of this funding is to invest in vital home-grown technologies and job creation in a new industry. The electric vehicle industry needs the development of a U.S. manufacturing base for batteries, and to “accelerate development and commercialization of reliable, safe and affordable electric drive vehicle systems,” the letter said.    (more…)