Changes

By the end of 2009 most big banks were in much better shape and the Treasury expects to recover all but $42 billion of the $370 billion it lent to ailing companies, with the portion lent to banks actually showing a slight profit.  Meanwhile over 120 small and medium banks have been shut as insolvent; in most cases the FDIC picks up the losses and another bank takes over the operations and branches.<ref>Jackie Calmes, [http://www.nytimes.com/2009/12/07/business/07tarp.html?_r=1&hp=&adxnnl=1&adxnnlx=1260187849-MV96Nnjzom3OwAchzjIqrg "U.S. Forecasts Smaller Loss From Bailout of Banks," ''New York Times'' Dec. 6, 2009]  </ref>

By the end of 2009 most big banks were in much better shape and the Treasury expects to recover all but $42 billion of the $370 billion it lent to ailing companies, with the portion lent to banks actually showing a slight profit.  Meanwhile over 120 small and medium banks have been shut as insolvent; in most cases the FDIC picks up the losses and another bank takes over the operations and branches.<ref>Jackie Calmes, [http://www.nytimes.com/2009/12/07/business/07tarp.html?_r=1&hp=&adxnnl=1&adxnnlx=1260187849-MV96Nnjzom3OwAchzjIqrg "U.S. Forecasts Smaller Loss From Bailout of Banks," ''New York Times'' Dec. 6, 2009]  </ref>

==Crisis in Auto industry==

==Auto industry==

In 2008 a series of damaging blows drove the "Big Three" (GM, Ford and Chrysler) to the verge of bankruptcy. Part of the cause was very high labor costs (much higher than the foreign plants in the U.S.), which prevents lower prices. The Big Three had in recent years stressed expensive, fuel-guzzling SUVs and large pickups. They were much more profitable than smaller, fuel-efficient cars. When gasoline prices shot past $4 in 2008, Americans stopped buying the big cars, and the Big Three saw their sales plummet.  The Financial Crisis played a role as no one was willing to loan GM the money to buy Chrysler. Consumer credit has tightened and it became much harder for people with average or poor credit to obtain a bank loan to buy a car, so sales fell further.  Stock prices plummeted as shareholders worried about bankruptcy; GM's shares fell to 1946 levels. Intense debate ensued about a massive bailout, that would be in addition to a $25 billion loan Congress passed in September 2008 to assist in increasing fuel efficiency. President Bush proposed changing the terms of that loan so it could be used to cover daily operating expenses, but Congress rejected that. Republicans in Congress in mid-November blocked Democratic proposals to underwrite a new bailout of the auto industry, as industry leaders made an unconvincing case before Congress.  President elect Obama and Democrats in Congress have demanded the Big Three come up with a highly specific plan with some chance of long-term viability, with the expectation that Congress will address the issue again in January 2009.

In 2008 a series of damaging blows drove the "Big Three" (GM, Ford and Chrysler) to the verge of bankruptcy. Part of the cause was very high labor costs (much higher than the foreign plants in the U.S.), which prevents lower prices. The Big Three had in recent years stressed expensive, fuel-guzzling SUVs and large pickups. They were much more profitable than smaller, fuel-efficient cars. When gasoline prices shot past $4 in 2008, Americans stopped buying the big cars, and the Big Three saw their sales plummet.  The Financial Crisis played a role as no one was willing to loan GM the money to buy Chrysler. Consumer credit has tightened and it became much harder for people with average or poor credit to obtain a bank loan to buy a car, so sales fell further.  Stock prices plummeted as shareholders worried about bankruptcy; GM's shares fell to 1946 levels. Intense debate ensued about a massive bailout, that would be in addition to a $25 billion loan Congress passed in September 2008 to assist in increasing fuel efficiency. President Bush proposed changing the terms of that loan so it could be used to cover daily operating expenses, but Congress rejected that. Republicans in Congress in mid-November blocked Democratic proposals to underwrite a new bailout of the auto industry, as industry leaders made an unconvincing case before Congress.  President elect Obama and Democrats in Congress have demanded the Big Three come up with a highly specific plan with some chance of long-term viability, with the expectation that Congress will address the issue again in January 2009.