Wednesday, December 24, 2008

Bernanke does a 180' on automaker bailout

On December 12, Bloomberg's Scott Lanman reported:

(General Motors Corp. CEO Rick) Wagoner may have failed to persuade Bernanke to support a government rescue of automakers. Bernanke, in a letter released this week, signaled opposition to extending central bank loans to the companies, saying such a move would fall outside its traditional duties. He suggested other options, including reorganization under bankruptcy.

On December 19, President Bush ignored Congress and gave himself some sort of newly created extra-Constitutional authority.

Now on December 24, the APs Martin Crutsinger is reporting:

The Federal Reserve approved GMAC Financial Services' request to become a bank holding company, allowing it to apply for a portion of the $700 billion bailout fund and get emergency loans directly from the Fed.

So over the course of 12 days, Bernanke seems to have done a complete 180'.

Tim White

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