Over the past couple of days we have all been treated to the spectacle of members of Congress giving the CEOs of the Big-3 the "Woodshed Treatment" and preaching to them as if they bear the entire responsibility for their current predicament (i.e. no customers).
Now I am not in the practice of defending wealthy and powerful Corporate CEOs, but seriously gentlemen, let's "get real" here. Are the CEOs of the Big-3 entirely responsible for the state of our economy now? Have the domestic auto manufacturers been perfectly managed over the years? ...am I a perfect lover? (NO comment!). Certainly, the domestic auto companies have made mistakes and yes they coulda-shoulda been better managed over the years. But acting as if they are the SOLE cause of their current problems?? ..come on now, gentlemen.
Really, did the CEOs of the Big-3 pass the law that Deregulated the Financial services industry allowing banks to trade in Credit Default Swaps the value of which they didn't even understand, without any oversight or Government regulation (
Commodities Futures Modernization Act - 2000)? Did the CEOs of the Big-3 tell all the banks that got $300 Million in Bail-Out money to hold onto all this cash and NOT loan to anybody so that now we have a credit crisis affecting everyone in business (Toyota's Oct sales were down 23%)? Did the Big-3 CEOs explode the National Debt to historic highs driving down the dollar and weakening the economy both of which drove investors and speculators out of the stock market and into commodities which rose to stratespheric highs this year (and started driving down car sales this summer.)? Did the Big 3 CEOs favor the Oil industry with tax loop-holes, program subsidies and under-collected royalties to artificially lower gas prices enabling millions of Americans to demand and buy gas hungry SUVs instead of fuel efficient vehicles you like to speak of (now)? And who among you voted to give a tax credit to buyers of the biggest and most expensive SUVs costing over $25,000 (don't all you Republicans stand up at once)? Yes the CEOs did in short sighted self interest, lobby against increased CAFE requirements. And how many of you responded by fighting and stopping toughened CAFE requirements from being enacted into law (again, Republicans don't all stand at once, please.).
Yes, the Big-3
could have been better managed, but they were not about the go bankrupt because they couldn't sell any product. Last year the Big-3 sold almost 8 million vehicles and they sell cars in Europe and have a presence in China. Yes, they've been losing market share to the imports but still 8 million vehicles is not chump change and Ford and GM are introducing more hybrids every year (Ford boasts two hybrids that get better mileage than the Camry hybrid). So let us not pretend that their liquidity problem is ALL THEIR FAULT. It is mostly the Government management's fault.
And for some more reality checking, have any of you illustrious public servants given any thought to what it would cost the Government if the Big-3 went under? Perhaps 2 to 3 million people out of work would of course put us into a depression. You would have to fund additional extended unemployment insurance expeditures and after that you would be spending money to feed about half of those people who 2 years after loss of their jobs would still have not found full-time employment (remember in a depesssion you aren't going to see much job creation fellas). My guess is the out of pocket costs -
expenditures NOT loans, would be much more than what you are being asked to provide as a bridge loan to the Big-3. Everyone in Government realizes we are going to need a stimulus package to get the economy moving again (don't count on the bankers to lend any money until the situation looks much better, safer. NOW the bankers are worried about risk! NOW they want to keep piles of reserves.). A bridge loan to the Big 3 would really just be, in effect, a spark to any stimulus package enacted.
Yes, reality checking sometimes isn't much fun. It's much easier to point the finger at somebody else, experience some convenient tunnel vision and not notice the full picture. No, the Big-3 didn't cause the Credit Catastrophe born of Deregulation. The Big-3 didn't cause the huge public debt which eroded our economy and sent assets out of stocks and into commmodities which then drove commodity prices to spectacular highs this year. The Big-3 didn't keep the price of gas down for decades with tax loop-holes for the oil industry which allowed Americans to indulge themselves in driving big inefficient cars and SUVs. But the domestic auto industry is something we do not want to throw away. And when you admonish the Big-3 CEOs for not building the more fuel efficient cars we FINALLY realize we do need - rememeber you can't develop these new technologies without
plenty of capital. And you are not going to have that kind of capital if you are operating under terms of a bankruptcy.
So stop playing politics with this country's future and start acting with a little bit of sense and assume some of your responsibilily to work for the nation and not to deconstruct it (this means YOU, REPUBLICANS).
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