Public Money, Private approval

Rick Wagoner and Bob Nardelli, the chief executives of GM and Chrysler respectively, told the House financial services committee on Friday that they would accept a combined bridging loan of $10bn to $14bn to see them through the next three months.

GM has said it needs an immediate injection of $4bn to stave off default, another $4bn in January, followed by an extra $10bn in 2009. that means GM needs USD18 billion. Chrysler has asked for an immediate $7bn. Ford wants access to a $9bn line of credit, but is optimistic that it will not need the money unless the slump in US vehicle sales deepens.

The auto industry alone in USA needs USD 34 billion to stay afloat. Here our stimulus package is RM7 billion. In the US, that amount is needed to resuscitate the auto industry. Here a miniscule RM7 billion is expected to revive the whole economy?

The question now, will that be enough? I hope the stimulus package will not be applied to companies that don’t deserve government money. We don’t require the mind of a president George W. Bush to be concerned about taxpayer money being provided to those companies that may not survive.

In America any government loans asked by the big corporations are subject to strenuous examination by select committees of Congress. Because that’s taxpayer’s money. Any aid from Congress is likely to come with stringent conditions, including an oversight mechanism with authority to determine how the companies run their businesses.

We come back again to the RM5billion EPF(taxpayers money) being given to Valuecap. We are heartened to know that the money wont be used to bail out stock market transactions or given to companies belonging to cronies.

But wouldn’t it be a departure from tradition for the finance minister to set up a committee replacing the tired and ill functioning PAC to debate on any application of public money?

But then, the Finance Minister says he is a stickler to tradition. ayoyo