Short-term aid, long-term assistance. According to the IHT, this sums up Barack Obama’s attitude toward the government’s role in the US auto industry. Obama is pushing President Bush to use some of the $700 billion bailout package to prop up GM (NYSE:GM).

- The wrangling between Bush and Obama comes in the wake of news that GM’s shares tumbled to 1946 prices, closing down 23% to $3.36, as analysts downgraded the stock on worries it would soon run out of cash and shareholders would be wiped out by any federal bailout.

- GM has 263,000 workers worldwide. If it does go under, that’s a hell of a lot of people joining dole queues.

- This, of course, would have disastrous consequences in the US, where unemployment rates are spiraling. If you take the U6 count of unemployed, which includes “marginally attached” workers and those who are employed part time for economic reasons, unemployment in the US is now at 11.1%, up from 7.9% last year at this time.  According to Karl Denninger on The Market Ticker:

While this is not in “Depression” territory the trend is especially bad, the revisions are stunning, and we haven’t even had an official recession declared yet.  With more than one in ten people who want a full-time job unable to get and hold one along with the rest of the economic outlook things are definitely getting worse and the only light I see in the tunnel is an oncoming bullet train.

- Or take this humdinger from John Crudele in the New York Post:

Each month Washington adds many thousands of jobs that it believes - but can’t prove - are being created by newly formed companies.

The logic behind this calculation - which is called the birth/death model - is as simple as it is extraordinary: even in a horrible job market and during a credit crunch as we have today, Washington believes courageous entrepreneurs are forming businesses and hiring people.

The October report - the one that reported the 240,000 loss of jobs - includes a guess that 71,000 of these uncountable, new-company jobs were created.

Included in those 71,000 made-up jobs are 7,000 that were supposed to have been created in construction and 13,000 in “financial activities.”

- Job losses are also reaching alarming rates in China. Paul Kedrosky on InfectiousGreed.com notes that 2.7 million job losses in Guangdong province alone in last seven months.

- Even more worrying is the impact China’s $586 billion bailout plan could have on the US Treasury market. To finance its plan, China “could have sell its holdings of U.S. Treasury and agency securities or slow its rate of accumulation in these securities,” according to MarketWatch.

China holds roughly $1 trillion of U.S. securities, including $541 billion of US Treasurys and $200 billion in agency securities, according to Miller Tabak.

Massive selling of those securities, at a time when the US government is already expected to issue large amounts of debt to finance its own economic stimulus measures, could further raise borrowing costs, such as mortgage rates, which are benchmarked to bond yields.

There’s only $60 billion left of the first $350 billion tranche of what was once known as the Trash Asset Removal Plan (and is now known as the only pot of available money in the world). So many companies of all shapes, sizes, and flavors are demanding cash that Treasury can barely process the requests. Congress will presumably order the Treasury to immediately begin doling out the second $350 billion, which, a few months ago, was seen as a sort of “just in case” reserve fund. No more.