Big 3 Bailout: Automakers Plead Their Case... Again

The Big 3 automakers may not get the bailout money they have been attempting to procure from Congress after all. The CEOs of General Motors, Ford, and Chrysler appeared for Congressional hearings Thursday, December 4, about whether or not the car manufacturers should be approved for a government loan of $25 billion. The Big 3 were there to re-present their cases, their new proposals having arrived a few days ahead of them to allow legislators time to go over the material.

This time would not start off as a public relations nightmare, at least. CEOs made the trip to Washington in vehicles of their respective corporation's manufacture. Ford CEO drove down in a hybrid vehicle. After their last appearance before Congress, where they were chastised for flying down in expensive company jets to ask for a "handout," just about any manner of conveyance would have been better.

But getting their proposal past a skittish Congress and an agitated, stonewalling public has been the order of the day. However, CNN reported Wednesday evening that Senator Harry Reid, Senate Majority Leader, had said that he was doubtful that there was enough support for the Big 3 bailout to get it through Congress.

General Motors has geared up for the fight by releasing an ad that shows the devastation potential of losing the automakers to collapse. Millions of jobs and billions of dollars in wages and corporate revenue would be lost, laments the ad.

All three of the automakers are using the national security angle to try to shore up votes and public support. But the Associated Press reported that the defense industry has become so specialized - and the Big 3 automakers have not made defense products in decades - as to make their claim nearly ridiculous.

Yet, there is the argument that an overly weak economy is in itself a national security risk.

But the public, having already watched half of the $700 billion bailout money go to massive financial institutions without any strings attached, any restrictive oversight, or any type of mediating requirements, have become dead set against the Big 3 bailout (or stimulus, or rescue package, or loan, or whatever they will end up labeling it). A CNN/Opinion Research Poll indicates that 61% of Americans are opposed to any form of bailout for the Big 3.

The public was also dead set against the $700 billion bailout of Wall Street. Congress repackaged the deal, added $150 billion in earmarks to get enough naysayers in Congress to switch their votes, then passed the "rescue package."

Now the Big 3 automakers, who received $25 billion from Congress just before the $850 Wall Street bailout passed, are having to pay for the Bush administration's and Treasury Secretary Henry Paulson's selective refunding of the finance industry. The Big 3 car manufacturers are experiencing the backlash of public sentiment of an American public outraged at the daily downturning of the economy (with no end in sight), where the average American worker is losing his job and his house while Congress simply allowed Secretary Paulson to walk away unhindered and unrestricted with $700 billion of taxpayers' money.

And they are simply saying, "No more."

And this time, representatives and senators alike are taking heed. Because the body politic is angry. And an angry public can turn on its representative body, like they have turned on the Republicans, the party perceived as leading the U. S. into this economic mess. Come January 20, the Democrats will have solid majorities in both chambers of Congress, which can lead the way to drastic and much needed national, economic, and diplomatic reform.

But the Big 3 automakers - especially General Motors and Chrysler - may find themselves in bankruptcy before a new Congress is seated.

The question Congress must ask itself in the midst of the two-day hearings on Capitol Hill between the executives of the automotive industry and the caretakers of the American will is: Do you chance the ire of the public and pass bailout legislation, even legislation that is far more controlling and restrictive than the $700 billion Wall Street bailout, or do you let the Big 3 bailout sit until the Democrats fully take over Congress and ram it through, however ineffective it might have become by the time they are able to do so?

But what about the millions of jobs lost? How does it benefit the American economy that thousands upon thousands more people lose their jobs, that thousands upon thousands add more strain to an overextended unemployment agency, that millions upon millions of dollars are lost in production revenue, tax revenue, and personal wages? Why does Henry Paulson get to select who gets how much if they are a financial institution but refuses to give what amounts to a minor loan to the auto industry? And why does the Bush administration let him? For a president that has been so free with his pen to invoke executive privilege to sit back and agreeably watch what amounts to financial despotism take place, where Paulson seems to hand out money to his Wall Street white collar cronies hundreds of billions of dollars but cannot afford to do the same for the beleaguered blue collar auto industry merely underscores the ultimate decree that Bush has done nothing but look out for his corporate friends since taking office.

For years of greed, mismanagement, and being unheedful of the warning signs, the Big 3 automakers may all fall. And this would seem fair to most, except that the automotive industry is asking for $34 billion (it once looked a lot like $25 billion) to keep their industry afloat and Treasury Secretary Paulson is stubbornly sitting on $350 billion of unspent money, the same amount he has already loaned out to his Wall Street colleagues almost without a string attached.

Congress can loan the Big 3 their bailout money. They can add stipulations, clauses, methods of oversight and restrictions to said loan. And they can pass legislation that authorizes that same loan to come out of the $700 billion Wall Street bailout money.

This has been suggested by a number of Democrats and Republicans, not to mention President-Elect Obama. The American public probably would have little to say about such a measure, considering that the money would come out of money the public deems gone, as good as spent. So what does it benefit Secretary of the Treasury Henry Paulson not to loan the money from the discretionary fund? And why does the president back Paulson so adamantly?

The Big 3 have two days to plead their case before Congress. Many indicators point to their entreaties being all for naught. And then? Probable bankruptcy and corporate dissolution for one, two, or all three of America's major automobile manufacturers.

And if that happens?

America will see if the economic domino theory of systemic, subsidiary, and affiliated collapse proffered by most economists and industry experts actually does occur.

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Sources:

KansasCity.com

OpenCongress.org