Government Bailout (Not the one everyone is talking about)

First an interesting article I read from TIME about how we are about to become more French then France.


The sneak attack came in late last night from Washington. The first in a series of $25 billion bail outs to the ‘Big 3’ Motor companies in Detroit (GM, Ford, Chrysler).  They are getting money at a discounted interest rate so that they can spend it to make more efficient and alternate energy cars. The ‘Big 3’ wouldn’t have gotten to this point if they had run their business better, but that’s not the big deal.

The big deal is that Chrysler is included in this program. What’s the big deal with Chrysler? Well if you remember they were purchased by a private equity firm, Cerberus Capital Management. So the government is bailing out a private company. I think that is a bigger line to cross then bailing out Wall Street for $700B, there really isn’t much precedent for helping a private company with no stock holders. And looking back at history it seems like the government does something to help Wall Street out every ten years or so.      


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