Sunday, November 09, 2008

Pelosi & Reid Propose Detroit Bailout

As I pointed out yesterday, the Detroit auto industry in general and General Motors in particular is in terrible shape. So terrible that in a free market system, they would have been swept away. But America does not (contrary to the misconceptions of some) have a free market economy, so it now appears that they might live on. It now seems that Democratic congressional leaders Nancy Pelosi and Harry Reid want Detroit auto makers to be included in the bailout package originally meant for Wall Street, thus confirming my suspicion that the bailout of Wall Street would create a precedent for bailouts of other industries.

There's little doubt that Obama will agree to it. The question is whether Bush will veto it or not. Given the fact that GM might go bankrupt before January 20, 2009, that is an interesting question. Let's just say though that I wouldn't exactly count on a veto, given Bush's past failure to adhere to free market principles.


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