Dem House Clears $25 Billion Bailout of Big 3

People are talking about the $700 billion "bailout" of the finance sector, but the actual cost is questionable - it might end up making the government money or it might cost the government a lot of money. And not doing something, according to Warren Buffet, Jack Welch, President Bush, Hank Paulson and Ben Bernanke, would be an economic disaster. As much as I don't like this amount of money being decided by politicians, I think something needs to be done to avoid a further financial and economic collapse.

But there is almost no question that the $25 billion loan to the automakers approved by the Democrat-led House today is universally bad. The automotive companies are losing money because they are large welfare programs (health care and defined benefit pension funds) that also happen to make a few cars. There is no systemic risk to the country if the firms don't get the loans - and now that the government has money at risk, they will inevitably influence mileage standards and overall corporate strategy (Pelosi thinks they should focus almost solely on electric and hybrid cars and no SUVs). I hope President Bush draws a line in the sand and vetoes this bill.