Steve Rattner: Rahm Emanuel gave UAW the Gettelfinger during talks about a government bailout of GM and Chrysler

Rahm Emanuel, former Democratic congressman and President Obama's chief of staff, gave the UAW the Gettelfinger during the GM and Chrysler rescue debate, according to former auto czar Steve Rattner's new book. This could get messy. Especially because there's more.

Huffington Post says Rattner's book "The Overhaul" will offer some unstinting takes on Obama's inner circle during the time of the bailouts.

Of course, this isn't the first time Emanuel's found himself in hot water over dropping an F-bomb on his political bedmates. But it's also not the only startling quote we've found in Rattner's book.

In addition to Emanuel's expression of the usually never-stated, but readily-shared opinion by many Democratic politicians of the usually Democratic-leaning union, the other early highlights include:

- Emanuel's spout about the UAW came during early debate on whether the administration should even try to rescue GM and Chrysler.

— In his first post-election talk with advisors about GM and Chrysler, Obama asked "Why can't they make a Corolla?"

— Rattner describes Fiat CEO Sergio Marchionne as "one of our biggest headaches." He also describes a showdown between Marchionne and UAW President Ron Gettelfinger; when Marchionne lectured about the need for autoworkers to accept a "culture of poverty" instead of a "culture of entitlement," Gettelfinger fired back: "Why don't you come and sit with me and tell a seventy-five-year-old widow that she can't have surgery and that you killed her husband?"

— And Rattner defends his role in "ChoochGate," the scandal that forced him to resign from the Obama administration, despite other reports suggesting there's a lot of life left in the probe.

Obama hobbles corporate borrowing to foster reliance on bailouts and force firms to "come crawling to the government"

At the 1986 White House Conference on Small Business, President Ronald Reagan offered these famous remarks about politicians' views on business in the 1970s. Reagan said, "Back then, government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."

Amazingly, in that speech nearly 25 years ago, Reagan also summed up perfectly the Obama administration's view of the economy in the present. On Thursday, President Obama announced that the government is providing a loan guarantee of $250 million to Ford Motor Co. from the Export-Import Bank. In making the announcement, at a Ford assembly plant in Chicago, Obama also defended billions of dollars in TARP bailouts to Ford rivals, General Motors and Chrysler, that he continued from the Bush administration.

Not mentioned by Obama, and not picked up in media coverage of the new $250 million loan, is a new regulatory measure signed into law by Obama just three weeks ago, which nearly stopped a $1 billion bond offering by Ford

Just days after Obama signed the Dodd-Frank so-called financial reform bill (here is my general overview for TAS of the Dodd-Frank monstrosity), Ford found that it couldn't issue a bond to allow it to finance more credit for its customers. The reason, as reported by AOL Daily Finance, is that Dodd-Frank "fixed" the problem of poorly researched credit ratings by designating the three big rating agencies as "experts" subject to the same liability as professionals such as auditors. Since the Securities and Exchange Commission requires that bond offerings have a credit rating, Ford's venture became a no-go.

The SEC fixed this problem temporarily by allowing Ford and other companies to issue bonds without rating for six months. But after that, according to experts quoted in the article, the trouble will resume unless there is a permanent fix to Dodd-Frank's "fixing" of the credit rating system.

It is not known if Ford's decision to take this government money -- after honorably refusing a TARP bailout when it was offered two years ago -- is related to expected regulatory troubles in the bond market.

But what is predictable is that the more frustrating the obstacles the government puts in front of businesses, the more some firms will come crawling to the government for bailouts -- and the more that firms will kowtow to the prevailing government's agenda and be politically connected, should they ever need this lifeline.

Examiner: New financial regs are good news for bad managers

President Obama lauded Senate passage of the Dodd-Frank financial overhaul, saying that "because of this bill, the American people will never again be asked to foot the bill for Wall Street's mistakes." That statement is untrue. Instead of ending tax-paid bailouts of politically favored corporations that are "too big to fail," Dodd-Frank makes the process permanent. The only thing Dodd-Frank has changed on bailouts is this: Before the bill was passed, bailouts had to be approved by Congress, as with the $700 billion Troubled Asset Relief Program first proposed by President Bush and then extended by Obama. But in the future, thanks to Dodd-Frank, instead of congressional votes, Treasury Department bureaucrats will unilaterally decide under the bill's "orderly liquidation process" how much of the taxpayers' money to hand out to troubled firms.

Worse yet, according to the Judicial Conference of the United States, Dodd-Frank makes tax-paid bailouts of selected corporations permanent in a manner that overrides the bankruptcy process established by the U.S. Constitution. "This is a substantial change from the bankruptcy law because it would create a new structure within bankruptcy court and remove a class of cases from the jurisdiction of the bankruptcy code," the conference said in a recent letter to Senate Judiciary Committee Chairman Patrick Leahy. To paraphrase Mark Twain, despite consuming more than 2,300 pages, Dodd-Frank bears the same relationship to reform as "lightning" does to "lightning bug." The terms sound like they are connected but in reality are entirely different.

So Dodd-Frank does not remedy the fundamental cause of the economic meltdown of 2008, which was the government's decision to shift the costs of bad investment decisions from corporate executives to taxpayers. Nor does the bill do anything to remove the elephant in the living room, the Fannie Mae/Freddie Mac bailout. The costs of this will reach nearly $400 billion, according to the Congressional Budget Office, and could approach $1 trillion before all is said and done. Roughly 70 percent of all U.S. mortgages are held by Fannie and Freddie, which between them hold $5 trillion in their investment portfolios. Fannie and Freddie are still losing billions by the month on bad mortgage investments and taxpayers are still on the hook. This means the housing crisis is far from being resolved, and, thanks to the continuing high rate of foreclosures, could plunge the economy back into recession at any time. No wonder four out of five Americans, according to a recent Bloomberg News survey, believe the reform bill Obama hailed as historic is anything but.

TARP bailouts mostly repaid, but Fannie's and Freddie's expected to grow to $381 billion

Now that nearly all the TARP funds used to bail out Wall Street banks have been repaid, the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac stand out as the source of the greatest taxpayer losses.

The Congressional Budget Office has estimated that, in the wake of the housing bubble and the unprecedented deflation in housing values that resulted, the government's cost to bail out Fannie and Freddie will eventually reach $381 billion. That estimate may be too optimistic.

Last Christmas Eve, Treasury removed the $400 billion cap on what the government might be required to invest in these two GSEs in the future, and this may tell the real story about the cost to taxpayers. In typical Washington fashion, everyone has amnesia about how this disaster occurred.

The story is all too familiar. Politicians in positions of authority today had an opportunity to prevent this fiasco but did nothing. Now—in the name of the taxpayers—they want more power, but they have never been called to account for their earlier failings.

Americans prefer unbailed-out Ford over GM and C

"Forty-six percent (46%) of Americans say they’re more likely to buy a Ford because it did not take a federal bailout. Two-thirds of Americans (66%) have a favorable opinion of Ford. Ratings for GM and Chrysler are much lower."

http://www.rasmussenreports.com/public_content/politics/obama_administration/daily_presidential_tracking_poll

UAW "a disaster' for southeastern Michigan

"UAW has been a disaster for the people of southeastern Michigan. For decades it has been strangling the Big Three. Its “triumphs” have been pyrrhic victories. Yes, UAW members received fantastic compensation, if they have managed to keep their jobs.

Unfortunately, UAW, more than any other organization, has been responsible for hundreds of thousands of union jobs being vaporized by pricing them out of the market. Now, this parasitic outfit has killed the goose that laid their golden egg.

If the bankruptcy had gone through the usual legal channels, UAW could have been buried alongside the companies that it killed. Instead, Obama made UAW its partner in these two companies by sharing ownership with them."

http://www.frontpagemag.com/readArticle.aspx?ARTID=35236

GM car owners turn away from Government Motors

"For the first time in years, voters now trust Republicans more than Democrats on economic issues. This comes following the unpopular bailout and takeover of General Motors. Adding to the hurdles facing the struggling auto-giant, GM owners are looking elsewhere for their next car. Just 42% are likely to buy from GM again. A Rasmussen video report notes a widespread expectation that the government will be forced to provide ongoing bailout funding for GM. Few expect taxpayers to get their money back from the auto bailout."

http://www.rasmussenreports.com/public_content/politics/
obama_administration/daily_presidential_tracking_poll