Obama bailout not helping auto or housing market

The two industries in the USA hit hardest by the recession are the housing and auto industries. So what do the mental midgets do in Washington? They remove the $15,000 tax credit for anyone buying a primary residence in 2009, and replaced it with a watered down version of $8,000 for first time home buyers only. As a result, despite record low mortgage interest rates, the USA housing market continues to tailspin.

Likewise in the auto industry, the mental midgets in Washington gave a tax credit for car buyers, but in fact most car buyers today lease. When I asked officials at two big auto retailers, Penske Automotive Group and AutoNation Inc., about leasing, both confirmed the trends. Tight credit, exacerbated by used-car value declines in key market segments, drove the captive finance arms of GM and Chrysler away from leasing in late 2008 and early 2009.

Ford Credit is still leasing, but has put more promotional money behind purchases. Lease offers vary by market, but a Ford Credit spokeswoman said the average monthly payment on a Fusion lease is now $276 — still higher than a competing monthly rate of $211 for a comparably equipped Nissan Altima.

The mental midgets in Washington would have been better off loaning money to banks that had to be used to grant leases to car buyers at discounted rates. As such the USA car industry will remain in a downward spiral.

Lipton, executive vice president of Friedman Real Estate Group in Farmington Hills, hit on a sore spot for the Detroit Three automakers. In the slump now pinching car and truck sales in every country, the Detroit brands — especially General Motors Corp. and Chrysler LLC — have been especially hard-hit.

One reason is that leasing has nearly evaporated as an option for shoppers at GM and Chrysler dealers, while Ford Motor Co.'s leasing volume has dropped sharply. Competing foreign brands continue to offer attractive lease rates.

Lipton cited two examples:

• One employee of his looked at a Ford Fusion and a Volkswagen Jetta, similar cars from a purchase-price and fuel-economy standpoint. The Jetta lease was quoted at zero down and $220 a month, while the Fusion was $340 a month, Lipton said, adding, "He had no choice but to lease the Jetta."

• A friend, Lipton said, wanted to lease an SUV. Every comparable American SUV was much more money than the foreign brands. "She just picked up her new Range Rover," Lipton said.

Yes folks, the party that currently runs Washington are indeed mental midgets. For further proof watch this video of who is to blame for the economic crisis we now face.