Last week the senate denied the automakers a $14 billion emergency loan (it was actually coming out of the $25 billion loan that is already promised to them, but not being released) saying that the UAW is to blame because the UAW woudn’t make more concessions.  The stock market and the value of the dollar seem to be going up and down with the news as it comes out.  Bailout likely, stocks/dollar up - bailout fails, stocks/dollar down.  While the majority of people polled are against the auto bailout it would seem that our financial markets support it.

Originally the automakers wanted access to TARP, the $700 billion nest egg that congress set aside for banks if they wanted some of it.  TARP would’ve been easier if it were approved by the treasury a month ago.  Back then the treasury balked at the idea saying that TARP was only for financial institutions.

So congress went into action, held two sessions with the CEOs of Ford, Chrysler, and GM, and after many iterations finally had a plan that most of them agreed on.  They talked with the White House and made sure that the executive branch approved of the deal (really, the executive branch got what it wanted - they wanted the money to come out of the $25 billion loan that was already approved).  Then it breaks down in the senate.

What’s the President to do?  He already had the deal he wanted, then congress said no.  So now it looks like the treasury is going to reverse it’s stance on using TARP to help Detroit.  Why would the president do this?  I think it’s partially because there are no other options, but I also think it’s because he wants to remind congress who’s in charge.  Congress put all kinds of rules in place for TARP and the executive branch is basically ignoring them to help the ailing auto industry.