NEW YORK, New York -- Coverage of the "bailout" the Big Three US automakers are requesting has pivoted in recent days on the fact that the companies' CEOs took private jets to Washington. I have primarily watched CNN's reporting and can say that Anderson Cooper & Co. have emphatically reminded viewers at every turn that "these guys took private jets to Washington!"
I agree that Rick Wagoner and Bob Nardelli are probably morons. Not only are they unfit to run large corporations, they probably aren't even fit to attend a PTA conference: You'd have to be a social twit to fly your Learjet to DC when asking for a taxpayer handout, whether or not your corporate charter has provisions stipulating private airtravel for you for "safety reasons."
Mr Wagoner, does GM make a short bus for you?
Still, CNN's near-obsession with Bob Nardelli's preferred mode of transportation obscures a much more important point: millions of jobs, municipal and state budgets, dozens of industries connected in seemingly arcane ways to the automotive sector, and a nation's morale all hinge on the existence of the US auto industry.
What happens to the industry is unclear. In order to be long-term competitive, union contracts will have to be ripped up, and bankruptcy is as good a way as any to welch on your contracts. But if the automakers go into Chapter 11 protection, they'll need to get new financing to restructure after getting rid of the union agreements that are crippling them. Their ability to find financing at this particularly lousy moment is ... not so hot. The government would save the country a lot of pain -- and probably more than $25bn in long-term unemployment checks, Medicaid/Medicare expenses and lost tax revenue -- if it would guarantee to bail out any automaker that goes into bankruptcy, provided they meet certain demands (rewrite your labor contracts, fire your incompetent CEOs, start making your European fuel-efficient models here now). But the government's coy little patty-cake game is stupid. Grilling the automakers and refusing to definitively say to what fate you'll sentence them creates uncertainty and drags down the markets. And after Lehman Brothers' demise, I doubt many people have faith the government will always step in when it should.
In light of that, harping on the aloof, Asberger's tendencies of auto CEOs does little more than push the public -- and therefore lawmakers, who seem unable to buck what they think will be popular anger against unpopular decisions -- against any bailout for reasons that have nothing to do with the soundness of the bailout itself. That's hella dumb.
Before turning the country against this proposal, Silver Fox Cooper and his ilk should consider not whether the CEOs of these companies took private jets or whether they have fancy suits (most CEOs of the world's top companies do, after all, and you can't expect to convince JPMorgan to lend you money when you fly coach and wear Skidz), but whether the bailout has merits of its own.
Clowns to Cooper: Get us back on the Gold Standard!
I don't know if it will lead to a depression, but allowing a major company like GM to fall apart now certainly won't help us avoid one. At this point, we should probably not take any chances in doing everything possible to move away from that outcome, and we shouldn't flirt with depression because of the fact that a few inept CEOs are too obtuse to fly JetBlue. Judging their stupidity should not be substituted for judging the merits of this country having an auto industry and the harm its collapse would bring to the US economy and people's confidence in the economy or themselves.
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