I found this article over at Bloomberg.com to have some pretty good information summarizing recent political steps regarding the economy, the bailouts and the auto industry.

President-elect Obama made a statement about his plans to forge a huge infrastructural investment strategy to help curb the economic crisis starting sometime next year.  Other than that the program is going to be a sizable, there are not enough details to determine what effects this will have on both the short term and long term time scales.  What one can rely on is that there are going to be plenty of entrepreneurial opportunities for companies to help with the process.  This correlates with my own experience talking with investors and entrepreneurs who survived the S&L crisis.

In regards to the real estate market, Obama has stated that he thinks more should be done and that attention to the deficit should take a second seat to stabilizing current market trends.  Considering that the $700 billion that was originally drafted to purchase high-risk mortgages has been entirely allocated to other resources, I would guess that come January, there will be talk about another bailout for these mortgages.

When it comes to the auto industry bailout (technically it is a loan, but what exactly is being collateralized by the government?), I'm not convinced that the problem with the industry is that they haven't focused on fuel-efficient cars.  This is being heavily prioritized in current negotiations.  Personally, I'd be dead today if I drove a light-framed, fuel-efficient smart car due to a T-bone style wreck I was in a few years ago.  My consumer tastes lean more towards a heavier, safer car.  Beyond that, consumers with large families demand big transport vehicles which are not inherently fuel-efficient.  Texans want trucks.  Although I'm glad to see Congress restraining itself from giving out the bailout contingent on plans to recover the industry, I'm growing less convinced that Congress is experienced or qualified enough to dictate what such a plan would be.

I would expect that this bailout will go through, and that provisions will extend to help consumers finance the vehicles with low-interest rates courtesy of the government and tax incentives for both end-user consumers and other lenders.

-beasley

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