I think you’re dead-on about Congress just not understanding the business world. I genuinely fear the day when Congress runs head-on into the reality that they can’t just pass laws to turn fantasy into reality and print more treasury bonds to cover it – cornering the mediocre minds of Congress with a Sophie’s choice is bound to be a disaster of a scale I don’t want to imagine.

That said, I simply can’t understand how our elected officials can be so obtuse – we rail about the decline of manufacturing and how we don’t “build anything” anymore, and yet we voraciously rob the productive to provide palliative services to the unproductive minority instead of finding ways to make them productive. We complain about “fairness” in taxes and meeting our obligations to OASDI, then ignore every sign of the looming catastrophic insolvency of the program. State governments with already punitive tax regimes hike taxes to meet unrealistic spending obligations and are flabbergasted when companies leave for low-tax states. Are there no adults in Congress? Are we really bound to be led by a group that acts like a college student with their first credit card?

I feel like Atlas Shrugged is becoming more of a documentary every day, and “The One” hasn’t even been inaugurated yet!

Sounds like the re-organization of the Big 3 is inevitable, regardless what Congress does. So the question, for me, comes down to this – do we want our medicine now or later?

If I were the Democrats, and I faced reality (big assumption), I’d want it now – well in advance of 2010 and while GWB is still in charge. That way, I could at least argue that it happened on a quasi-GOP watch. It still would be a tough sell politically, but better to have GWB a a plausible punching bag than not.

From all I’ve heard, three problems have caused this problem for US automakers: 1) a death stranglehold by unions, 2) poor management that acquiesces to the unions’ whims, 3) poor quality compared to foreign automakers. Granted, the downturn in the economy is a fault as well, but it probably has only escalated the inevitable – not caused it.

Let them go through bankruptcy.

During bankruptcy, the court in loco parentis for these corporate and unionist children will handle who gets the bike on Saturday and who gets shotgun on the way to school.

And no, I don’t care who loses their job. I’ve lost a job before. It sucked, but I found something else. No one, particularly the U.S. taxpayer, owes these people a living. Having a million or three out of work is nothing compared to having the government continue this bailout activity, borrowing money to throw down a hole in the name of avoiding pain.

And I R E A L L Y don’t care about GM’s brand.

how to somehow “save” the automakers while not committing political suicide with a public very angry about bailouts while not forcing any concessions from the UAW, since all the Democrats are union owned.

Assuming there is no private credit available, the logical thing would be for all three to go bankrupt and have the US provide the line of credit for the continued operation and restructuring. But a Democrat can’t be a party to the restructuring that would require MAJOR concessions from UAW. That’s why they want it now and want Republicans to come along with them while GWB is still President. When its all a Democrat show, they have nobody to blame, and they have to continue to bankroll the failing companies at great political cost.

I predicted a long time ago that the impending bankruptcy of one or more automakers would be the hook for nationalization of health care and retirement benefits. The Bush Admiinistration wouldn’t play with the automakers pitching their retirment obligations to the government, so they did the charade with the UAW of the independent UAW run Trust. That think can’t possibly work and everybody who negotiated that knew it or should have. It’s just a place keeper for a government take over or at least massive government funding.

That is probably the best outcome to be expected. The automakers divest of the retiree H&W obligations to the UAW trust and the government somehow becomes the guarantor of the benefits.

I hope the Officers of the UAW have their retirements all vested and secure or have nice Swiss bank accounts, ’cause there’s no way they come out of this with their jobs. You don’t agree to concessions and keep a union job. You often don’t even get to keep the union if you agree to concessions.

“The taxpayer dollars we put into GM are not an investment of any kind. The money will be used strictly to wind down operations, and to soften the blow for people who will lose their jobs or go out of business.”

This is what I would hope for. But my question is, do they (Wagoner et al., etc.) realize this going in? Is this something everybody knows, but that yet remains unsaid? Or will this become more apparent to all when the language in a final deal is reached?

How many times is this now?

Sorry. If GM goes bankrupt all the support jobs and related industries don’t just magically disappear . Toyota buys the Corvette brand and starts making Corvettes. Honda buys Chevrolet. And so on. And in each case, all those support industries will have something to support–just they will no longer be anchored to a wooden Titanic.

The notion that we must sell any future recovery–more accurately: sabotage–so that we can soften this fall (as if we even know how to–since we have such a great track record of restraining recessions) is pure stupidity from where I stand. Put another way: Suppose this does work, what’s the cost? Exactly. Recession over (when? don’t ask) but now there is several trillion MORE that needs to be paid back. And what will be proposed? Not pay it back, not even close: Print more money! “Pish posh,” you say “When the good times return, Americans will understand that we need to pay the debt down.” Yes, just like we paid down the debt in the 80s and 90s.

But, let’s back up a bit: The exact same dire predictions were tossed about like beads at Marti Gras a mere3 months ago. And if you listen close, they are already laying the groundwork for the same exact dire “predictions” for the next round.

No. Better a cleansing fire now with a solid spring recovery than a mild heat wave followed by an endless winter.

“But, the Democrats will use any deepening of the recession to drag us deeper into socialism.” So, the solution is to get in on the ground floor with our own socialism? We’ll just dress it up in words that don’t sound socialist, see? Well, that makes perfect sense.

Republicans, fiscal conservatives? Really, where?

on the Big Three bailout.

We are loosing the argument. To give $25 billion for fuel-efficiency research is to admit that mankind is warming the entire planet Earth (which means we can cool it, which means we, human being can control the climate, and that is just stupid). The purpose of these congressional mandates on automobiles, such as using less of that evil fuel (oil), is because of the HOAX of manmade global warming. Hell, they don’t even call it global warming anymore. They have to now call it “climate change”. Well, duh. The climate always changes. If there is a market for fuel-efficient autos, and there is, then business will build them and they are. How does $25 billion in taxpayer money help the American auto industry right now for research of something new that will not come out in years?

Besides, if the UAW does not allow the newest and greatest plants, like the Ford plant in Brazil, then why bother sending any taxpayer money to them? They will just seek more and more and more. When and how much is enough? Enough already.

And how much of our tax payer money will actually go to defeating conservative causes? The UAW is a left wing organization which clearly loves socialism. 95% to layed off workers? Really? R U kidding me? They will find a way to use that money for their left wing pet projects. I say no. Actually, hell no.

Let’s take it now and get it over with. Those taxpayer dollars can be allocated to a fund to allow companies to redirect their support to viable alternatives. Given that people still need cars, I would recommend funding moving trucks to the Southern rust belt. Those car makers will be ramping up production to meet the defunct GM capacity and will need the support.

What I dont understand about this situation is this crying for the loss of jobs and GDP.

The market that the little 3 operate in is not a free one. They have subsidies already, and laws that seek to shield them from competitiveness. They operate in a created, fake environment. They employ to many people, and pay them too much money. They have too many factories, own too many brands, too many dealerships. They operate detatched from reality. Is it my fault that someone in Detroit spent their capital on a machine shop for GM? Is it my fault that a small business will fail because the owner of said business couldnt see the writing on the wall?

If I had put all my money into Frannie and lost it, I wouldnt get a bailout for my stupidity. Thats what these people did.

What happened to responsibility? Why are we worried about losing 2% GDP when it was in fact a fake 2%? If the little 3 had been run with some responsibility, these jobs wouldnt exist to begin with. Those small businesses wouldnt exist. Im not crying over the UAW. If a million of these people go unemployed, good. Let the pain teach us a lesson. We have been subsidising them anyways. End it.

We have a concrete way in this country to measure whether or not a business is essential. Its called PROFIT.

The bailout of the Automotive industry is a step in the wrong direction. If we bailout the auto industry, we are opening the floodgates of state-sponsored industry. As far as i know, an industry that is financed and as a result, controlled by the state is a major step towards socialism. We live in a capitalist state, and despite the protests by the illuminati left, we should be letting the economy run it;s course, with as little intervention as possible. As i have stated before, this nation is based of a pseudo industrial Darwinism, where the companies whose business models are to rigid to change or adapt to changing economic conditions should either merge, reform, or be let to die and whither so a new company that is better suited and more progressive and emerge. Unfortunately, this will come with some dire economic consequences, but it is a brutal weight that we will have to bear for the sake of the American way of life.

What’s the net impact on automobile sales. I don’t have the exact numbers and since I’m on my way out the door I don’t have time to look them up and link. But for the sake of argument lets say GM & Chrysler account for 35% of the market. Ford accounts for another 13% and “all others” make up about 52%. The guys who make 35% of the vehicles go away. How much of that 35% will be a net sales loss not picked up by Ford or the Foreigns?

My guess is that there will maybe be a net 5% loss with the other 30% going to F&Fs. GM and Chrysler employees and suppliers will be out in the cold. F&F employees will have a tad more security and Ford will have a big club to beat the UAW with – if they’ll use it. The supply base will get fat.

In the medium term, like 12 months out from the liquidation, the consuming public will, by-and-large, not be effected. They’ll still be buying cars.