Dear Santa,
My Daddy says you don’t exist. I have to believe because you are the only one that can help me. I got myself into a mess and I deserve nothing but coal (or ethanol) in my stocking this year. But please save my pathetic and dying industry. Sprinkle some happy dust on the hick from Texas that runs this country and make him bail me out.
Sincerely,
Rick Wagoner, CEO GM
Santa makes everything better doesn’t he? Rick got his wish, but only barely.
Last Friday, President George W. Bush promised TARP money to the Big 3. As you know, the legislation for TARP was written as a bailout of financial companies. So it’s only fitting that Bush, after saying he wouldn’t use TARP money, use the TARP fund to do just that. At varying date over the next month, $13.4 billion will be loaned to Chrysler and GM. Ford remains in a state that they only need a line of credit in case the others fail. So allowing the other two to exist keeps Ford alive by default. This means they don’t need any money yet.
The announcement does lack one oft-referred to component of the Senate version of a bailout: The Car Czar. This alliterative and rhyming title was drummed up by the media to reference the government official(s) that would preside over the companies. The czar could have many powers, including levitation and the ability to talk to animals. Actually the czar would likely mediate meetings between the car companies and suppliers, creditors, equity holders, UAW, etc. The Treasury will serve that position until Obama decides whether or not to put someone in as a czar.
I’m completely disappointed in our government for doing this bailout. It was bad enough when they created TARP to protect the banks, now they’re not even using the money to prop up the economy. No I don’t buy into the BS that helping the Big 3 saves the economy. Sure it does in the short run. But the “sweeping changes” the administration is demanding will never happen. The Big 3 now knows they have their foot in the door. They’ll get whatever loans they want, when they want it. The government exists to serve the people, the people would be better served using $13 billion to retrain the employees of these companies that should have already been laid off.
We are short on engineers, nurses, and teachers. I’m sure many of them would happily be retrained on the government’s dime. If the government came to me and said my industry was dead and I could go back to school for free, I’d go grab my backpack.
What I want to know is what you think of this bailout. Are you for it? Against it?
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. |
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