The blind leading the blind Posted by: McQ
on Monday, December 08, 2008
You can't help but be blackly amused by this ongoing comedy in DC:
A senator who will help determine whether the auto industry gets a $15 billion bailout said Sunday the head of General Motors should step down, telegraphing what could be a congressional demand for a top-line shake-up in Detroit in exchange for financial life support.
Rick Wagoner, the chief executive of GM, “has to move on,” Christopher Dodd (D-Conn.), chairman of the Senate Banking, Housing and Urban Affairs Committee, said on CBS’ “Face the Nation.”
“I think you have got to consider new leadership,” Dodd said. Asked if that should be a condition of any bailout, he said, “I think it is going to have to be part of it.”
“I think it’s clear GM is in the worst shape,” Dodd said.
No word when Dodd will step down as a Senator and head of the Senate Banking, Housing and Urban Affairs committee after sharing responsibility for the financial fiasco we're now suffering.
But this should come as no surprise to anyone. When government uses "taxpayer money" to "invest" in or bailout a company, it expects to exert some control over that "investment". That's the non-business reason many of us are saying "no" to any sort of bailout package.
And unlike the financial sector where anywhere from 700 billion to 1.3 trillion was just tossed around in big chunks, willy nilly, there will be "strict terms" on this relatively piddling 15 billion.
Senior lawmakers hope next week to present a proposal for votes in both the House of Representatives and the Senate where there has been widespread skepticism about a bailout.
The companies have said they would accept strict terms as conditions for aid. GM and Chrysler said they would go so far as to reconsider a merger if it meant getting federal funds. Congress is not expected to demand such a step this time.
When asked about the problem, President-elect Obama said:
“The last thing I want to see happen is for the auto industry to disappear, but I’m also concerned that we don’t put $10 billion or $20 billion or $30 billion or whatever billion dollars into an industry, and then, six months to a year later, they come back hat in hand and say, ‘Give me more,’ ” Obama said.
But of course they will - this bit of loose change, relatively speaking of course will only postpone the inevitable, and Obama knows it. But, saying what he did, he knows that when they inevitably do show back up for more, he can demand more control and more concessions.
Asked whether the top executives should remain in the jobs, he said: “Here’s what I’ll say, that it may not be the same for all the companies. But what I think we have to put an end to is the head-in-the-sand approach to the auto industry that has been prevalent for decades now.”
Head-in-the-sand - a good description of lawmakers and the sub-prime mortgage disaster that precipitated all of this.
Head-in-the-sand - an apt description of lawmakers who continue to ignore the future bankruptcy promised by the unfunded mandates of Social Security and Medicare unless they do something now.
But these are the guys and gals who know what is best for GM?