If I were running a presidential campaign, I would definitely be saying to myself “whatever Michigan wants, Michigan gets.” But beyond that, I have a very hard time seeing a good rationale for providing federal assistance to U.S. automakers. But between the fact that bailoutmania’s already hit Wall Street and the strong electoral college argument, it seems that momentum is building for $25 billion in loan guarantees “which would cost taxpayers $7.5 billion.”
This seems particularly weird because if I’m understanding the proposal correctly there’s no nationalization or government takeover of anything. It’s just a straight-up giveaway to keep politically sensitive firms in business. Who knew the “Washington Consensus” would die in Washington, DC under a Republican President in a mad fit of bailouts and nationalizations?