Oh, poor miserable Captains of Capitalism. How the mighty have fallen. How easily they have abandoned their principles at the prospect of Big Guvment handouts. Somewhere the ghost of Ayn Rand is crying. Why, you’d think these mighty giants of industry were a bunch of lazy unemployed homeless people at a soup kitchen the way they are groveling for more corporate socialism rather than letting the almighty invisible hand of God the Free Market do its work spreading wealth and happiness unimpeded.
What is this post all about, you ask (and rightly so)? Nothing much. Just the American Automotive Industry promoting itself as the next candidate for a bailout Bush administration rescue mission:
That defining catchphrase of American business will be tested as never before as GM enters the week with its stock at a near 60-year low and the prospect of asking the U.S. government for funding, which analysts say is crucial to its survival and to any consolidation in the struggling auto industry.
“This could certainly be major for GM because it needs cash more than anything, and this could stave off the bankruptcy risk,” said Erich Merkle, an analyst with Crowe Horwath. […]
Beyond the recent round of merger talks [with Ford and Chrysler] there looms a burning question: How soon can the U.S. automakers get federal funds and will it be enough to save an industry that is burning cash and facing uncertain prospects for a turnaround?
GM, Ford and Chrysler are all eligible for a share of $25 billion in low-cost federal loans to retool factories in order to build more fuel-efficient vehicles.
But the disbursement of those funds is expected to take months as regulators put rules into place that will govern distribution of the money.
As of late Friday, Detroit’s allies in Congress were focused on getting the Bush administration to accelerate the availability of that $25 billion.
In shorter words, American automakers just want Bush to show them the money. This is no time for red tape, they say. Just hand over your cash and we won’t ruin your economy. You know, your standard blackmail line.
Hey, I have no problem with giving $25 Billion to US automakers. Hell, under Bush we’ve given billions of dollars to Halliburton and KBR for bad water and deadly showers in Iraq for our soldiers. Using that metric, GM, Ford and Chrysler are at at least as deserving of the Federal Government’s munificence. But not without protections for workers. If all the Big Three automakers plan to do with that $25 Billion Dollars is layoff workers and distribute their new found bounty to shareholders and executives, I have a problem with that.
After all, these are not exactly the folks I would trust to spend free money wisely. Unlike their counterparts in Japan, they continued to build gas sucking SUV’s and failed to invest in new alternative technologies such as hybrids until it was too late. They believed Big Oil when they were told the era of cheap gas would never end. They thought the bubble economy would never implode and that there would always be people willing to buy the big trucks and other expensive fuel sucking monstrosities they manufactured. They were so stupid that, despite the lessons learned from the last time gas prices unexpectedly spiked upwards, they continued to go for short term profits over long term success. In the land of Adam Smith, they would have died off years ago.
But real people work for GM, Ford and Chrysler, and they shouldn’t have to pay for the mistakes that the wealthy, incompetent senior executives have made. So fine, give the automakers $25 Billion Dollars. That’s a drop in the bucket compared to what we will be spending on the banks. But do the same deal we did when we bailed out Chrysler: Get equity in the company and a the right to decide how the money is spent. Because otherwise, we might as well be direct depositing that money into the Swiss bank accounts of the senior executives who mismanaged the American automotive industry into the ground.
And that, my friends, would be as ill fated an economic stimulus package as John McCain’s plan to extend the Bush tax cuts for rich people like himself.