The Bailout Is Dying

Good news for all financially responsible Americans: the bailout is dying!

Yay:

A plan to give troubled U.S. automakers billions of dollars in government-backed loans is on life support, leaving the fate of hundreds of thousands of workers and Detroit's once-venerable car companies hanging in the balance.

Senate Majority Leader Harry Reid, D-Nev., canceled plans Wednesday for a vote on a bill to carve $25 billion in new auto industry loans out of the $700 billion Wall Street rescue fund. The Bush administration and congressional Republicans have rejected Democrats' plan to dip into that pot of money.

Warning of economic disaster, a bipartisan group of senators from auto industry states are trying to reach a deal on an alternative package. If an agreement can be reached, Reid said, the Senate still could vote on it as part of a measure to extend jobless benefits.

But Reid acknowledged that was "not going to be easy."

More:

Congressional backers have started scaling back their proposals, while neither management nor labor appears willing to act on their own to resolve the crisis in Detroit:

Senate Majority Leader Harry Reid, D-Nev., canceled plans Wednesday for a vote on a bill to carve $25 billion in new auto industry loans out of the $700 billion Wall Street rescue fund. The Bush administration and congressional Republicans have rejected Democrats' plan to dip into that pot of money. …

The leaders of General Motors Corp., Ford Motor Co. and Chrysler LLC painted a grim picture of their financial position during two days of congressional hearings, warning that the collapse of the auto industry could lead to the loss of 3 million jobs. Detroit's automakers, hurt by a sharp drop in sales and a nearly frozen credit market, burned through nearly $18 billion in cash reserves during the last quarter, and GM and Chrysler both said they could collapse in weeks.

"I don't believe we have the luxury of a lot of time," GM CEO Rick Wagoner told a House hearing.

Alan Mulally, the CEO of Ford Motor Co., said the company had sufficient cash reserves to make it through 2009. But United Auto Workers union president Ron Gettelfinger said a bankruptcy could spawn others.

"If there's a Chapter 11 (for) one of the companies, it will drag at least one other with them, if not all of them. And I do not believe Chapter 11 is where it will end. It will go to liquidation," he said ominously.

Of course, these dire predictions are coming from the same guys who swear that their business models are profitable, if only they could have a bailout first.  Hot Air offers this analysis:

So we have management talking about how badly their companies have performed, and labor talking about how badly their companies have performed.  It seems that the two sides with the most at stake understand at least that their enterprises have flopped.  Will either of them budge on compensation at all levels?  Scale back wages for both workers and management, sell off the corporate jets, conserve capital for reorganizing their business?

Of course not.  They want to continue doing what brought them to the brink of liquidation, but they want taxpayers to pick up the tab.  Michael Capuano (D-MA) put it best: "My fear is that you're going to take this money and continue the same stupid decisions you've made for 25 years."  That's exactly what they want to do — and the bailout would enable them to avoid making other tough choices … for a couple of years, at best.

What makes this even more ridiculous is that Congress has already voted to provide Detroit with $25 billion in loans.  That came in September as part of an effort to help the Big Three modernize for more energy-efficient vehicles, something apparently that a private company couldn't do on their own if the market existed for the products.  The White House wants Congress to authorize those loans for the purposes of the bailout instead, while the Democrats want to give them an additional $25 billion from the Treasury rescue plan on top of the energy loans.

I wonder if those energy-efficient vehicles include private jets?  Mulally takes two flights per week in one of them for Ford.  What's the greenhouse-gas profile on that?

Stupid decisions don't deserve subsidies.

Amen!

The Big 3 have apparently realized their bailout is slipping away and are getting desperate, because they then charged that a failure of the auto industry will damage U.S. national security.  No, it will just damage your golden parachute, that's all.

It appears that what has really scorched the Big 3's chances is -- as stupid as it may sound -- the arrival of the CEOs in Washington:

After hearing that the chief executives of General Motors, Ford and Chrysler flew here in their costly private jets, Ackerman questioned whether they would use the billions of dollars they are seeking to fix underlying management problems that landed them in a financial mess in the first place.

"There's a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hand, saying that they're going to be trimming down and streamlining their businesses," said Ackerman at a Financial Services Committee hearing yesterday.

"Couldn't you have downgraded to first class or something, or jet-pooled...to get here?" Ackerman asked. "It's almost like seeing a guy show up at the soup kitchen in high hat and tuxedo."

ABC's evening newscast went with the story last night, going so far as to look up coinciding flights on Expedia, from Detroit to Dulles. There were 12 of them, starting at about $200.

Yeah, that hypocrisy thing doesn't usually go over well with most people once they know about it.  And, what does it say about you when Congress mocks you for your duplicity?

Hopefully, our Congress will kill this bailout for good (and every other one, too).  It would be better if it was killed out of a sense of renewed fiscal responsibility, but in this case I'll take the shame factor, too.

There's my two cents.