bailout plan may widen to more industries

[maladroit]

Wide array of U.S. companies start competing for bailout money
Published: Sunday, October 26, 2008 | 2:20 PM ET
Canadian Press: Martin Crutsinger, THE ASSOCIATED PRESS

WASHINGTON - The bailout is now the hottest lobbying game in town.

Insurers, automakers and American subsidiaries of foreign banks all want the Treasury Department to cut them a piece of the largest government rescue in U.S. history.

The betting is that many with their hands out will be successful, especially with financial markets in a stomach-churning dive and predictions the economy is about to tumble into a deep recession.

These groups argue that the credit squeeze is so severe and the risks to the economy so dire that their industries need financial support as well.

The Treasury is considering requests from a variety of industries, but has not decided whether to expand the program, officials said Saturday.

Lobbying efforts are intensifying.

The Financial Services Roundtable wrote Treasury officials on Friday requesting that the initiative to buy $250 billion in bank stock grow to cover insurers, auto companies, securities dealers and U.S. subsidiaries of foreign companies, including banks.

The Treasury's plan is intended to bolster banks' tattered balance sheets and get them to resume making loans.

As the Treasury now interprets it, these additional groups would not participate in the bank stock program.

They could receive help from a separate part of the $700-billion rescue that will buy bad assets from financial institutions.

Steve Bartlett, the president of the Roundtable, urged the Treasury to broaden the definition of those eligible for the stock purchase program.

"The institutions that are excluded play a vital role in the U.S. economy by providing liquidity to the market," Bartlett wrote Neel Kashkari, the Treasury Department official running the bailout program.

Referring to U.S. subsidiaries of foreign companies, Bartlett said: "This is a global crisis and to not recognize the U.S. firms controlled by foreign banks or companies would create further impediment to the market's recovery."

A financial industry official said Treasury Secretary Henry Paulson met over the past week with various groups, including hedge fund managers, that were petitioning for assistance.

The official spoke on condition of anonymity because the Treasury has not made a decision.

This official said the discussions with insurance industry executives were being held in advance of what are expected to be disappointing earnings reports by some insurance companies in the coming week.

The official said the insurance industry would like to get government purchases of their stock on a mandatory basis, duplicating the agreement Paulson struck two weeks ago with nine major banks.

Paulson pressured the big banks to go along with the program as a way of removing the stigma that might be attached to the payments if only a few major banks had received them.

maladroit Reviewed by maladroit on 10-26-2008. bailout plan may widen to more industries Wide array of U.S. companies start competing for bailout money Published: Sunday, October 26, 2008 | 2:20 PM ET Canadian Press: Martin Crutsinger, THE ASSOCIATED PRESS WASHINGTON - The bailout is now the hottest lobbying game in town. Insurers, automakers and American subsidiaries of foreign banks all want the Treasury Department to cut them a piece of the largest government rescue in U.S. history. The betting is that many with their hands out will be successful, especially with Rating: 5

[maladroit]

"the insurance industry would like to get government purchases of their stock on a mandatory basis, duplicating the agreement Paulson struck two weeks ago with nine major banks."

- now the insurance agency is begging for socialism! after the banks, wall street traders, big insurers, and automakers embrace socialism, who is left to support capitalism?


to the last capitalist to leave the economy: please turn off the lights...

[TheNugget]

"the insurance industry would like to get government purchases of their stock on a mandatory basis, duplicating the agreement Paulson struck two weeks ago with nine major banks."

- now the insurance agency is begging for socialism! after the banks, wall street traders, big insurers, and automakers embrace socialism, who is left to support capitalism?


to the last capitalist to leave the economy: please turn off the lights...

What's capitalism? Oh that's right.....dead.

[maladroit]

capitalism will never die, but it might spend some time in the emergency room...y'know what might end up on life support? globalization!

the usa can't compete with cheap foreign labour...north american automakers can't even compete with foreign automakers who build car plants in north america...we traded our jobs for a bunch of appliances and widgets that we bought with money borrowed from the countries that made them...that worked in the short term, but it cannot work in the long term...the recent economic crisis is a warning that will be ignored because we love cheap appliances and borrowed money

[flyingimam]

capitalism will never die, but it might spend some time in the emergency room...y'know what might end up on life support? globalization!

the usa can't compete with cheap foreign labour...north american automakers can't even compete with foreign automakers who build car plants in north america...we traded our jobs for a bunch of appliances and widgets that we bought with money borrowed from the countries that made them...that worked in the short term, but it cannot work in the long term...the recent economic crisis is a warning that will be ignored because we love cheap appliances and borrowed money

well put.

[Revanche21]

you mean giving alcohol companies money wasnt enough?

[maladroit]

FACTBOX-Industry bailouts agreed or called for | Markets | Markets News | Reuters

FACTBOX-Industry bailouts agreed or called for
Tue Oct 28, 2008 10:25am EDT

GENEVA, Oct 28 (Reuters) - Bailouts for industrial sectors hit by the financial crisis are open to challenge under international trade rules, lawyers say.

The following lists major measures called for or agreed to help industry:

* A $10 billion rescue package to support a merger between the biggest and third biggest U.S. carmakers, General Motors Corp (GM) (GM.N: Quote, Profile, Research, Stock Buzz) and Chrysler, mostly owned by Cerberus Capital Management LP [CBS.UL]. [ID:nN27356776]

* A call by congressmen from Michigan, the home of the Detroit-based carmakers, for a bailout for all three U.S. manufacturers, including second-place Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz). [ID:nL0520213]

* The U.S. Congress approved $25 billion in low-interest loans last month to GM, Ford and Chrysler to help them meet a federal target for more fuel-efficient cars.




"Should the government bail out private enterprise? The answer is no, it shouldn't."
- President George Bush, July 2008, responding to a question about a possible government bailout for General Motors

[GoldenBoy812]

capitalism will never die, but it might spend some time in the emergency room...y'know what might end up on life support? globalization!

the usa can't compete with cheap foreign labour...north american automakers can't even compete with foreign automakers who build car plants in north america...we traded our jobs for a bunch of appliances and widgets that we bought with money borrowed from the countries that made them...that worked in the short term, but it cannot work in the long term...the recent economic crisis is a warning that will be ignored because we love cheap appliances and borrowed money

Labor unions cause outsourcing. Tell me, why is it that Toyota has plants here i the US? I cannot wait to hear your answer:jointsmile:

[maladroit]

labour unions drive up the cost of labour, but even without unions, american labour could not compete with foreign sweatshop labour

why are you asking abourt toyota? toyota doesn't operate sweatshops and the average wage in japan is the highest of all asian countries, and higher than some western countries

i hope that was worth the wait!

[GoldenBoy812]

labour unions drive up the cost of labour, but even without unions, american labour could not compete with foreign sweatshop labour

That is a pretty big claim. Productivity trumps low cost labor every time. Outsourcing should only exist when it is unprofitable to produce. An examle would be paying equal to / more than minimum wage to a set of workers who can produce y amount of goods in x given time when a foreign factory can produce the same amount in the same period of time. It only hurts consumers to keep this hypothetical factory flowing...

why are you asking abourt toyota? toyota doesn't operate sweatshops and the average wage in japan is the highest of all asian countries, and higher than some western countries

i hope that was worth the wait!

Toyota is a non union employer. Thats not the point, why does Toyota have US factories when they can get lower labor input elesewere???