David Kirkpatrick

October 24, 2008

I don’t like all the corporate handouts …

… going around, and I certainly don’t like the fact automakers are right there on hands-and-knees, but the issue of auto loans to consumers is a real problem (I blogged on that issue here) so this proposal might not be all that bad.

From the second link:

Michigan’s Congressional delegation is urging the Treasury secretary and the Federal Reserve chairman to use their authority as part of the $700 billion bailout package to help more consumers obtain car loans, warning that the tightened credit markets were endangering millions of jobs.

The effort, led by Representatives John D. Dingell, a Democrat, and Fred Upton, a Republican, comes amid plunging vehicle sales as auto lenders struggle to find financing.

 

In addition, two of Detroit’s automakers, General Motors and Chrysler, are considering a merger to combine their cash reserves and cut costs.

”In this current economic environment, it is imperative that the government ensures that liquidity is restored so that the U.S. auto industry is able to function until normalcy is restored to credit markets,” the lawmakers say in a draft of a letter to the Treasury secretary, Henry M. Paulson Jr., and the Fed chairman, Ben S. Bernanke, that was obtained by The New York Times.

Automakers say that a lack of financing has compounded a weakened economy and kept consumers out of showrooms. The industry says that more than 90 percent of new-vehicle purchases are financed.

As of late Wednesday, all but three of Michigan’s 17-member delegation had signed the letter, and the others are expected to join as well, according to a person involved in the effort, who spoke on the condition of anonymity because the letter was not intended to become public until Thursday.

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