The Washington Post's Steven Pearlstein wrote a particularly good column on the looming auto industry bailout this morning. He cites the auto industry as one of the least deserving of a bailout, but concludes a bailout is necessary. This is beginning to look like how Washington policymakers see it too.
Congress returns next week. We knew just before Congress left town on August 1 that a bailout would be proposed in the Senate as part of a second stimulus bill when it returned in the second week of September. That probably won't go anywhere for partisan political reasons, but loan guarantees for the auto industry may be attached to the continuing resolution to fund the government -- legislation which must be enacted by October 1. President Bush has opposed a bailout so far, but on August 18 Senator McCain suddenly pledged to "consider any reasonable proposal." Senator Obama has directly supported a $4 b. appropriation to fund $25 b. of loan guarantees.
Endless Bail Outs
First we have to recapitalize the banking system while still funding all the masters of the universe who milked it dry. Then we have to subsidize the idiots who paid too much for their houses. Now we have to pay off the moronic managerial class in Detroit who didn't understand that petroleum would become scarce.
I don't think capitalism is working very well, and I'm not willing to pay to rescue it until we find a handful of grownups who can come up with a sensible roadmap away from our current predicament. Sadly, neither major party candidate yet passes the test. It goes without saying that Congress isn't close to figuring it out either.
Auto industry bailout with strings
Let me just say that I'm against government bailouts. We're just passing our problems on to future generations. Not to mention that one of these days the huge deficits we are running will cause the monetary system to collapse like a house of cards.
On the other hand, allowing our auto industry to shut down will costs us jobs, which our economy desperately needs.
This presents an opportunity for our elected officials to do something productive. Give the big three the low-interest loans they need only on the condition that they design and sell vehicles that run on natural gas within 2 or 3 years. This will give us time to get our gas stations ready to sell this cheap fuel we have an abundance of.
The price of oil will drop, maybe to $40 or $50 per barrel. It will provide a tax break to working Americans in the form of lower fuel costs and we can finally give the finger to countries like Venezuela who think they can hold America hostage with their oil production.
Of course our elected ones will need to divorce themselves of oil money. It could be very interesting to find out which ones are in the pockets of big oil.
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