People fear Congress will reward Detroit’s piss poor business acumen will trigger an avalanche of other industries looking for a handout. Rightly so. I don’t support any bailouts lightly. As I said yesterday, I’d love it if the nation could afford to tell General Motors to shut up and take its medicine, but it can’t.
However, the question remains: Where will it end?
I think Detroit is a good place to end it. The centerpiece of our industrial base is in trouble, and $25 billion is a small price to pay now that they’vefinally (if several years too late) figured out how to make a profit. But…
As I said the other day, there should be some strings attached. We as a nation have an agenda, and if you’re going to take the market mentality to its logical conclusion, floating the auto industry a taxpayer-funded loan should entitle the nation to demand a few things from the Big Three.
- Break up GM. Sure, I’ll consider a Chevy in the future. But who says it has to have “General Motors” stamped on the frame or has to come from the same factory as a Buick. What the hell’s a Buick anyway? Spin off Cadillac and let it become the Mercedes Benz of American cars once again. (Just don’t let those buffoons at Daimler actually make them into Mercedes, not until the remember how to build a car again.)
- The airlines already have their hands out. Unlike Ford, GM, and Chrysler, the big airlines have to look over their shoulders at Southwest, Air Tran, and Jet Blue. So when the airline industry comes crying to Congress and President Obama, I believe the response should be, “Go to hell.” The airlines had it all and lost it through even worse mismanagement and customer abuse than the Big 3 might accomplish a shadow of on a good day. If we lose the big airlines, there are a lot of smaller ones who’d love to charge you less to take up the slack.
- It’s time to demand payback from American International Group. AIG keeps coming back for more and more and more money. Time for the government to seize this tottering giant and dismember it once and for all. Take control and sell off all the assets and put some money back into the treasury.
- If the Treasury Department is taking a stake in American banks to bail them out, then it’s time to force them to stop hoarding all the cash. In fact, the new Treasury Secretary needs to figure out what the $700 billion bailout is for, then stay on message. Currently, Henry Paulson shows the attention span of a gnat drowning in a mug of Starbucks espresso blend. One day, it’s to buy out bad mortgages. The next day, credit card debt. Then the auto industry. Hank, what is it? You pitch this as an FDR move and then get all Herbert Hoover on us. Bad move, especially for a Republican. Herb gave us a top tax rate of 73%. (Yanno, the rate that made Ronald Reagan say, “Um… Let’s borrow money from Japan and find something a little more sane to charge people.”)
- No bank, manufacturer, or retailer should ever be allowed a position in the market that could threaten the economy if it collapses. Ever. Socialism? Kids, Teddy Roosevelt saw this, and Teddy was a man who loved capitalism. He just knew the game had to have rules. And like Teddy, we seem to be going back to JP Morgan for help. And as grateful as I am to JP Morgan for being as smart as their namesake/founder, I’m not sure I want them acting as a second Federal Reserve. Clean up the banking industry, by all means. But then make sure no one gets too big.
Because I don’t think my grandchildren will be able to afford JP Morgan coming to Congress with their hat in hand.
And while we’re on the subject, since the taxpayer is on the hook for all these stupid business practices, shouldn’t a lot of these executives be facing the prospect of a few years at Club Fed, maybe a federal pound-me-in-the-ass facility? Or even losing their assets?
Just say no to golden parachutes.