Tuesday, December 9, 2008

Car Czar to the Rescue!

The new bailout bill is approaching finalization. Among the highlights are Congress' insistence on the elimination of corporate jets and the creation of a "Car Czar".

Eliminating the jets is the bone to throw the taxpayers for the imminent immolation of $15 Billion or so, which will be only the beginning. I will venture that we will be lending all three automakers another $30 Billion or so by March. To quote the late Sen. Everett Dirksen, "A billion here, a billion there, and pretty soon it starts to add up to real money."

The Car Czar is much scarier. He will basically be running GM and Chrysler, (and soon, in all likelihood, Ford). The good news is that he will have oversight. The bad news, (which is so bad it renders the good news bad), is that the oversight will come from Congress and the White House. There may only be two institutions on the face of the earth that have proven to be more incompetent at management than the Big Three. And that would be Congress and the White House. And the incoming administration's most valuable asset in this regard will likely be their willingness to admit they know next to nothing about making money by selling cars.

There is still a good possibility that the Republicans will block this bill. Whereupon Wall Street will respond with another day of heavy losses and the Republicans will cave and pass a modified version. Because, as we all know, people who bought stock in GM were guaranteed to get their money out. Weren't they? No? It's getting hard to remember, after all.



 

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