Post by Logan on Mar 7, 2016 4:15:58 GMT -6
Hillary Clinton and Bernie Sanders discussed their stances on the auto industry bailout during Flint's Democratic presidential debate. Here's the nub of the fight over Clinton's support and Sanders' opposition to the auto bailout.
The $82 billion that helped finance the bankruptcy of General Motors, Chrysler, their finance subsidiaries -- GMAC and Chrysler Financial -- and a handful of large suppliers were part of a much larger Troubled Asset Relief Program (TARP) that covered more than $700 billion that went to bailout the largest banks, and AIG, the insurance giant that has issued credit default swaps that came due when the banks could not cover their losses on mortgage-backed securities.
In short, a Senator or congressman could not vote to rescue GM and Chrysler without voting to provide the money to keep the nation's largest investment banks from failing.
Sen. Clinton voted yes. Sen. Sanders voted no.
It's worth remembering that until the TARP funds were released, banks, as well as other lenders, had stopped financing loans and leases for new cars and trucks. As distasteful as it was to help global banks that made disastrously worthless mortgage loans, without the restoration of credit it's likely that no effort to ignite an economic recovery would have gained traction.
Read more: www.freep.com/story/money/cars/general-motors/2016/03/06/explaining-hillary-clintons-bernie-sanders-votes-auto-bailout/81419564/