Kudlow Lashes Out at Bailouts in Wake of Autos/Bush Proposal
Feeling a little bailout fatigue? Tired of the assault on the taxpayer from the federal government to pacify those influenced by the United Auto Workers? CNBC's Larry Kudlow feels your pain.
Call this red meat for the troubled anti-bailout soul. Kudlow, now performing a role as a co-host on CNBC's mid-morning program "The Call," blasted the Union Auto Worker, President George W. Bush, Treasury Secretary Henry Paulson and anyone else associated with $17.4 billion in loans for auto companies announced earlier today on Dec. 19.
"This is a full-up pooper scooper for the American taxpayer, which now owns General Motors," Kudlow said. "We're going to have a GM cabinet. Barack Obama is going to be the new car czar because Bush basically pushed this pooper scooper his way."
The host of the 7 p.m. hour of "CNBC Reports" singled out the several key points the Bush bridge loan offered lacked.
"[I]f anybody reads this goofy document, the absolute essential issues in this - the wages, the compensation, the work rules, the debt restructuring are non-binding targets," Kudlow said. "[N]on-binding targets - that is a total outrage for the American taxpayer, and we are looking at putting more - shoveling poop, hell - we're going to be shoveling taxpayer money for years and years because there is nothing in here that is specific, and tough, and enforceable."
One of the knocks on the entire process from politicians and conservative pundits is that the influence of the United Auto Workers has been too obvious, especially with this latest edition of the auto bailout saga.
"It's not just the car companies that got what they wanted, which is to say money - it's the UAW that got what it wanted," Kudlow said. "[T]he UAW opposed the [Sen. Bob] Corker amendment because he had tough clear binding conditions. It was essentially a government-sponsored Chapter 11 bankruptcy. This is just a bunch of words on a piece of paper that has no meaning. And the worst part of the story is taxpayers are going to be left on the hook. We are going to own General Motors for years to come."
An animated Kudlow made the case that the taxpayers' interests were ignored by President George W. Bush.
"The argument is, from the taxpayers' standpoint, from the possibility of serious structural reform where their hands are tied, from the substantial - having an adult monitoring this - some kind of car czar or bankruptcy judge - this Bush deal strikes out," Kudlow said. "[M]r. Bush caved in," Kudlow continued. "He just wanted to get rid of it and kick this pooper scooper down the road. That's all he wanted to do."
According to Kudlow, the Dec. 19 proposed bridge loan would do nothing to improve the standing of the American auto manufacturers or the American economy.
"And I regret to tell you who was not in this document," Kudlow said. "And I regret to say this to Mr. Bush and Mr. Paulson, you blew it because you didn't protect the taxpayers and you're not protecting the long-run health, either of the American car business, which needs this radical restructuring or the American economy."
On Dec. 16, Bush admitted in an interview for CNN that he had "abandoned free-market principles to save the free-market system." That was absolutely an incorrect move according to Kudlow.
"President Bush says, ‘I've had to forfeit free-market economics in order to save the free-market economy.' That is wrong. That is a very bad idea, Mr. President. With all due respect, I've supported him on many issues in the last eight years - this is a lousy way to go out of office with these kinds of statements and apologies and no defense of the taxpayer."
Out of frustration, Kudlow announced the unveiling of a new executive branch department for General Motors (NYSE:GM).
"It's a GM cabinet office," Kudlow continued. "Let's appoint somebody in the Obama news conference today and just be done with it and acknowledge the U.S. taxpayer now owns General Motors."
With all the strong rhetoric from Kudlow, CNBC Washington correspondent John Harwood improperly interpreted Kudlow as being a proponent of liquidation for the beleaguered automakers. But the former associate director of the Office of Management and Budget for the Reagan administration fired back at Harwood.
"I am opposed to liquidation," Kudlow said. "This Herbert Hoover stuff is a straw man John. It is a red herring. I wanted a tough-minded, clear ... I've lost this round. I've lost every round on bailout nation in the last six months, but I don't want liquidation or I don't even want a court-ordered Chapter 11. I wanted a federal government-run bankruptcy with a strong car czar with clear conditions that were enforceable and binding."