Posted by
Middle American Radical on Saturday, December 13, 2008 6:23:35 AM
Bush may be a Texan and may pride himself on his poker game, but I guess he's never played poker with a union boss. This whole exercise of trying to pass a bailout for the auto companies has turned out to be a charade given that Treasury is now considering using the TARP money, after all. As unpalatable as the idea of throwing $700 billion at the financial system was, there was at least the sense that it was only to be used to keep the system itself from dying. Bailing out a non-financial industry changes the program from defibrillation to dialysis. Now, any company that can convince a few important politicians that it is indispensible to the economy can get a federal IV infusion and be on its way again. Even if the treatment is limited to the Not-so-big-anymore Three, once it's started, who would stop it? If $25 billion a quarter keeps them alive and keeps Obama, Pelosi, and Reid from being blamed for letting them go bankrupt, why would they stop writing the checks?
The executives of the Not-so-big-anymore Three are fools for taking government money. Congress knows as much about making a profit as they do about making cars. American car manufacturing will become a government-sponsored entity--kind of like Fannie Mae--and be subject to political whims. Maybe Congress will form another enterprise called "Caddy Mac" to develop creative financing for low-income car buyers. After all, all the Chevy Volts in the world are useless if nobody can get the credit to buy them. I think the car companies are a symbol of the real problem--a government that has grown too big, spends too much money, and has hopelessly expensive entitlement liabilities. The only logical solution is radical restructuring, but the powers that be are unwilling to bite the bullet and be done with it.