A Second Great Depression?

Despite an agreement between the White House and Congressional leaders on legislation that will provide a $15 billion bridge loan to GM and Chrysler, the battle is far from over. And time is running out.

Media reports and our sources in Washington D.C. are indicating Republicans are becoming more firm in their opposition to a loan package for the two domestic auto makers.

For whatever reason, the auto makers and their dealers appear to be losing the battle on Capitol Hill at the moment. The problem seems to be Senate Republicans, primarily in the South. Whether their resistance stems from a true philosphical position (which was missing when they doled out -- and continue to do so -- money to financial institutions), or an attempt to break the UAW, or strengthen their manufacturing base in the states they represent, Republicans are willing to force the country into what many analysts say will be an economic depression.

Louisiana Senator David Vitter (R) argued today in the Senate that giving money to the auto makers before they provide detailed restructuring plans is "backwards," and "putting the car before the horse."

He's got it wrong. A better question is, What doctor would require patients near death provide detailed plans on how they would better take care of themselves before offering treatment? Yet, that is what's happening here.

What's frustrating to dealers is that Republicans they thought were friends are now ignoring their pleas. For an industry that generally tends Republican (since 1990, the automotive industry has given $100 million to Republicans and a mere $33.7 million to Democrats according to OpenSecrets.org) the love is not being returned.

If you had told dealers two months ago that Rep. Barney Frank (D-MA) and Speaker of the House Nancy Pelosi (D-CA) would be their best friends they would have laughed. But that is the case today.

One could say the only question to ask Republicans is, do they want to go down in history being blamed for two Great Depressions in less than 100 years? Because that is what's going to happen if they deny the auto industry a simple $15 billion in the next few days.