Update: It now sounds like a bridge loan deal will be reached. Bush is scheduled to make a statement at 9:00 AM.
Original post:This is interesting. When the auto bailout fell through in the Senate it seemed pretty obvious that Bush would somehow employ TARP to do what Congress wouldn’t. But chatter is picking up that that’s not a done deal. Yesterday came the first word that Bush might do pursue a prepackaged bankruptcy, and now Hank Paulson is suggesting the same thing:
AP: But Treasury Secretary Henry Paulson told a business forum in New York on Thursday night that while bankruptcy for the automakers should be averted if possible, an “orderly” reorganization might be the best solution.
“If the right outcome is reorganization or bankruptcy, then isn’t it better to get there through an orderly process?” Paulson asked.
This still feels unlikely to us, mainly cause it feels like this would take a lot of guts. But if this is what Bush ultimately decides on, it would mean the failure of the UAW to do EVERYTHING the Republicans demanded (whether reasonable or not) was a major disaster — then again, in an organised bankruptcy, we wouldn’t be surprised if the union came out alright.