Friday, December 05, 2008

playing with fire

I think Congressional Republicans are playing with fire when it comes to the question of whether or not to help General Motors, Ford, and Chrysler.

I have been a strong critic of Detroit - there is a reason they have lost market share to foreign auto manufacturers, including their over-reliance on SUVs. If this were normal times and one of them was in trouble, I would have little sympathy.

But in case the Republicans haven't noticed, these aren't normal times. It is premature to use the word "depression" but just the fact that it is being kicked around also shows this isn't a "regular" recession that we are in. The word "deflation" is also in the conversation, and that is really not a situation we want to be in.

So to jeopardize a million-plus jobs right now isn't wise. And this isn't just a Big Three problem - if you hadn't noticed, both Toyota and Honda reported 30%-plus drops in sales last month as well.

So as distasteful as it may be, I have become convinced that this is NOT a time to risk the collapse of the Big Three. Yes, they could file for bankruptcy and reorganization, but again these are not normal times, and in any case doing so would STILL put a lot of people out of work, a deflationary anti-stimulus action at precisely the wrong time.

Not to mention the equity issue. Why, normally-eager-to-claim-solidarity-with-the-little-guy Republicans, are you so quick to shoot huge wads of cash at Wall Street to help investment bankers save their jobs, but you won't spend far smaller sums of money to help blue collar workers (as well as lots of white collar people like engineers and accountants and advertising people) to help Detroit survive this crisis?

Meanwhile, look at the level of analysis being shown by Republican Senator Richard Shelby. Shelby spent much of his time yesterday asking the Big Three CEOs whether they drove or flew from Detroit to Washington, and then whether they had a driver or carpooled or what. This from a Senator who gets to fly on the public nickel all the time.

Those simply aren't serious questions. Yes, hammer the CEOs about plans to reorganize, for how they will use any bailout funds, get details. And definitely, the US government should get something in return for any bailout. But please don't piss around with stupid questions like this.

If Detroit collapses in the near term with no help from Washington and a lot of people lose their jobs, if I were the Democrats I would make sure nobody ever forgets it.

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