Congress should have listened to Mitt Romney:
IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for...you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.
It is not wrong to ask for government help, but the automakers should come up with a win-win proposition. I believe the federal government should invest substantially more in basic research — on new energy sources, fuel-economy technology, materials science and the like — that will ultimately benefit the automotive industry, along with many others. I believe Washington should raise energy research spending to $20 billion a year, from the $4 billion that is spent today. The research could be done at universities, at research labs and even through public-private collaboration. The federal government should also rectify the imbedded tax penalties that favor foreign carmakers.
But don’t ask Washington to give shareholders and bondholders a free pass — they bet on management and they lost.
The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.
The argument against bankruptcy was that people would hesitate to buy their cars. Personally, I would be much more likely to buy their cars under bankruptcy. There is no way I will buy one now. The way I figure it I will have paid for one already, I don't intend to throw good money after bad.
Just assuming for a moment taxpayers are eventually paid back by the automakers. Will we ever be paid back for the who-knows-how-many-millions we will spend just to oversee the boondoggle? Will the automakers pay for the "Car Czar" and the new bureaucracy that will be created? Does anyone actually believe this does not amount to nationalization of the auto industry?:
...Mr. Obama went on to describe was a long-term bailout that would be conditioned on federal oversight. It could mean that the government would mandate, or at least heavily influence, what kind of cars companies make, what mileage and environmental standards they must meet and what large investments they are permitted to make — to recreate an industry that Mr. Obama said “actually works, that actually functions.”
It all sounds perilously close to a word that no one in Mr. Obama’s camp wants to be caught uttering: nationalization.
If it looks like a duck, walks like a duck, and quacks like a duck. It is a duck.
Obama is right about one thing, when it comes to running companies “Generally, government historically hasn’t done that very well.” And this will be no different. Again, how much money will taxpayers have to fork over to "recreate an industry that actually works"? Why not let the bankruptcy courts do what they're set up to do? Manage bankruptcies. Let the chips fall where they may, if the companies are not viable we do not need to be wasting billions trying to prop them up.
Looks like that's exactly what we're about to do.
I don't know if a filibuster is still on the table. I just spoke with one of Senator Shelby's staff members and she did not know the latest. (9:00 AM CT) Either way, as one of his constituents, I truly appreciate Shelby's opposition and the way he spoke out forcefully against this bridge loan to nowhere.