President Barack Obama revealed new details in his fiscal 2010 budget on May 7, with a statement saying: “We can no longer afford to spend as if deficits don't matter and waste is not our problem. We can no longer afford to leave the hard choices for the next budget, the next administration — or the next generation.”
Back in the bad old days of the Great Depression, the breezy assurance of the Hoover Administration that “prosperity is just around the corner” became, as the years of depression dragged on, a mainstay of Vaudeville comedians and Hollywood screenwriters alike. As things turned out, elusive prosperity did not re-appear until after 16 years of depression and world war, and even then was not fully in evidence until after Congress finally removed all wartime price controls and slashed government spending by a third. An entire decade was squandered by eager-beaver social engineers in the Hoover and Roosevelt administrations, who could not be shaken from the notion that more government spending and controls on market activity could solve the economic crisis — a crisis that had been created by government in the first place.
In order to meet government out-of-court restructuring demands and to be eligible for more government financing, Chrysler agreed last week to a deal that gave the United Auto Workers union 55 percent ownership and a seat on the board of directors of the restructured company. The UAW stands to exercise major influence on the U.S. government during the impending bankruptcy proceedings.
The handwriting has been on the wall for Chrysler for many, many years, but it appears that the storied 84-year-old automotive corporation, almost three decades after its last government bailout under CEO Lee Iacocca, has reached the end of the line. After the swift breakdown of last-ditch negotiations yesterday, Chrysler Corporation and its creditors are in court today to begin proceedings for the first-ever bankruptcy filing by a major U.S. auto corporation. For the moment, the White House and Chrysler officials are still chirping about a well-ordered bankruptcy that would allow a leaner, retooled Chrysler to emerge from receivership in 30 days or so. But that won’t happen.
Despite rosy earnings reports from some closely watched corporations, the Great Recession is far from over, according to the latest economic data from the Commerce Department. America’s GDP, which shrank at an annualized rate of 6.3 percent in the last quarter of 2008, was expected to decline at a rate of about 5 percent for the first quarter of this year. Instead, it fell 6.1 percent, suggesting that last year’s meltdown continues more or less apace.