Companies start competing for bailout money

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Submitted by cooperthedog on October 25, 2008 - 7:58pm

By MARTIN CRUTSINGER, AP Economics Writer Martin Crutsinger, Ap Economics Writer

WASHINGTON – The bailout is now the hottest lobbying game in town.

Insurers, automakers and American subsidiaries of foreign banks all want the Treasury Department to cut them a piece of the largest government rescue in U.S. history.

The betting is that many with their hands out will be successful, especially with financial markets in a stomach-churning dive and predictions the economy is about to tumble into a deep recession.

These groups argue that the credit squeeze is so severe and the risks to the economy so dire that their industries need financial support as well.

The Treasury is considering requests from a variety of industries, but has not decided whether to expand the program, officials said Saturday.

Lobbying efforts are intensifying.

-snip-

http://news.yahoo.com/s/ap/20081026/ap_o...

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I hate the entire bailout,
Submitted by patientrenter on October 25, 2008 - 8:55pm.

I hate the entire bailout, but if it's going to happen anyway, I think there is a good case for extending it to life insurance companies, as well as banks.

Why? Life insurance companies are supposed to be a safe place for consumers to invest their premiums for a long time, until they are returned as a death benefit. Unlike banks that are supposed to return money at short notice, and probably should limit their long term lending, insurance companies should invest in long term commitments like mortgages. Presumably, a lot of them did. Now they are stuck with colossal losses that they have no way to make up.

Short of allowing most life insurance companies to slowly fail over the next 1-10 years as this hole in their balance sheets shows up in full, it's probably better to plug the gap now. It actually makes more sense than it does for banks.