The (Auto) Bailout is Not in Our Best Interest

Snakeoil salesmen and gullible bumkins still exist.

You can't blame the auto execs for trying to grab a share of the money bleeding out of Washington these days. They see how easy it is to use the media to back Congress into a corner and they probably figured, why not. They may have made a public relations blunder when they hopped on their corporate jets three weeks ago. But believe me, they learned their lesson quickly. They probably figured that their corporate-jet excursion would soon be forgotten if they changed the headline. And they did. The new headline is: we want more money, and we need it quicker.

It seems to be a matter of sharp executives taking advantage of a Congress that does a poor job of showing any sense of discipline. Look at how easily Congress rolled over when President Bush wanted to start a war in Iraq. Every one voted for it. Until this election cycle when they all insisted that they really meant to vote against it. And of course, Congress jumped at the chance to fund the bank bailout. And only now are they figuring out that former Wall Street execs sold them a bill of goods.

I know it would be a shame to see iconic organizations like GM go out of business. But their best days are long behind them and even with a bailout, it's highly unlikely they're going to be a dominant player again any time soon.

And you know what? We've seen this before, right? Railroads have gone under, as have construction companies, universities, banks, insurers, retailers and, yes, automakers.

So would it be so bad if GM went bankrupt? It might actually be a good thing. It's possible to conceive of a US auto industry similar to the aviation industry in which one company seems to be alone building commercial jets (Boeing) but actually partners with lots of manufacturers to get the work done. It would be terrible, however, if we bailed out GM only to be left with the equivalent of Airbus.

Congress has to get out of the lending / bailout business. Government has demonstrated repeatedly that it makes knee-jerk, ill-informed judgements.