Tuesday, February 24, 2009

Corker sticks to his position on auto bailout, GM: 'at some point, we need to let institutions fail'

In an interview just completed this morning on CNBC, Tennessee U.S. Sen. Bob Corker stuck to his position on the auto bailout and the Obama administration's increasing focus on nationalizing the country's big banks.

"At some point, we need to let institutions fail," Corker said of all the rescue plans.

Corker's contention -- which is dead on right -- comes as insurer AIG announced today that it will lose $60 billion despite receiving $100 billion in help from the federal government. Analysts say that AIG remains a black hole of assets declining in value, reinforcing Corker's position that the U.S. government should not get involved in the marketplace.

"This is going to be never ending," the Tennessee Republican said of money AIG and other institutions need.

As for all the Obama plans, Corker said "We are in the wilderness right now. I hope tonight (from State of the Union address) ... we need direction."

The world is watching the administration and its involvement with the banking system, Corker said, as to what the government is going to do with these troubled institutions. Corker is the 22nd most wealthy member of Congress.

"This is 90 percent of the issue(with the economy) if we get it right," Corker said. "We need to have the ability to invest in common shares without their value going to zero."

Look for Corker's star to continue to rise as investors look for more clarity in Obama administration plans --- and don't get it.

Unfortunately, for much of the interview, Corker was saddled with New York Democratic Rep. Maloney, who interrupted with responses that reflected a belief that this economy can be turned around in the short term -- and with the bad Obama policy decisions so far.

It can't, particularly since less than a quarter of the Obama stimulus plan will be spent in the next two years. Corker senses the seriousness of the moment in decisions being made. If our government make mistakes now in trying to relieve matters and rescue institutions immediately, we will destroy this economy for the long term.

The wilderness Corker cites may indeed be where America's economy remains for the decade to come. Truly.

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