Sub Lumen: Who's Afraid of the Big Bad Three?

The Chief Executive Officers of the "Big 3" U.S. automakers were back in Washington today (having actually driven from Detroit in cars this time), more humble and more hungry. This time they were asking the Senate Banking Committee for $34 billion in federal loans, up from their request two weeks ago for $25 billion.

They were selling both the magnitude of the need and its urgency, getting help on that point from UAW President, Ron Gettelfinger, who said: "I believe we could lose General Motors by the end of this month."

The auto exec's new tone of contrition mitigated the amount of hostility from the senate panel, but they found few prospective buyers for their sales pitch. Ranking minority member, Sen. Richard Shelby, said: "If you made this presentation to get a bank loan I suspect that any sensible banker would summarily reject your request." However, committee chair Chris Dodd, said, "We're not going to leave town without trying" to help, and that without help "we're looking at a death sentence." [AP]

The Big 3 will try to make their case at a House hearing on Friday, and Congress could take up rescue legislation next week in an emergency session. My suspicion is that they'll meet an equally chilly reception in the House, and at this point I'm not even going to guess at the final outcome.

I've been back and forth on this issue in my own mind. The Hammerin' Hank Paulson $700 Billion Extravaganza has left me with a wee bit of discomfort concerning the whole concept of our government giving away billions of dollars that they don't have in order to reward incompetence. But at the same time, I'm more than a little pissed off at the disparity between the treatment the banks and financial services people received from Congress and the way the mental pygmies on Capitol Hill are dealing with the car companies.

It seems that if you're in the manufacturing sector, if you actually make usable, physical, tangible products, then you get a very public [and in this case, mostly very deserved] whipping... and you may or may not get the money you need to survive.

If, on the other hand, you're in the financial sector, if you lost godawful sums of money buying and selling derivatives and other instruments so exotic you had to hire physicists to create them, then Uncle Sam doesn't even ask you how much you need... he just hands you his wallet on faith. I swear there have been times I've looked at Treasury Secretary Paulson and thought for a moment I was seeing Jack Nicholson's "The Joker" in the first Batman movie, cackling:

"And now, folks, it's time for 'Who do you trust.' Hubba, hubba, hubba! Money, money, money! Who do you trust? Me? I'm giving away free money!!"

I've been hearing other people voicing similar sentiments. One of them is Michael Moore. I've never been a huge fan of Michael's, though we do share a common waistline. On this issue, though, I'm not finding a lot upon which we disagree.

One point of agreement is that in order to save the "body" of the car companies, they should be beheaded. Moore had this to say on Larry King a couple of weeks ago:

They're in the spot they're in and they've been in this spot for some time because they haven't listened to the consumer, they haven't been building the right cars ... in fact, they've not only hurt themselves, they've helped to provide some of the fodder for this economic collapse that we're facing because of the arrogant and wrong decisions that they've made over the years. Those people should be removed.

There's video here.

Michael was on Countdown with Keith Olbermann Wednesday evening and didn't pull many punches.

If the above video does not play, go here or here.

Moore also has a lengthy open-letter sort of article on his web site, that he titled "Saving the Big 3 for You and Me." It's very worth reading in its entirety, but here's the pertinent part.

Congress must save the industrial infrastructure that these companies control and the jobs they create. And it must save the world from the internal combustion engine. This great, vast manufacturing network can redeem itself by building mass transit and electric/hybrid cars, and the kind of transportation we need for the 21st century.

And Congress must do all this by NOT giving GM, Ford and Chrysler the $34 billion they are asking for in "loans" (a few days ago they only wanted $25 billion; that's how stupid they are -- they don't even know how much they really need to make this month's payroll. If you or I tried to get a loan from the bank this way, not only would we be thrown out on our ear, the bank would place us on some sort of credit rating blacklist).

Two weeks ago, the CEOs of the Big 3 were tarred and feathered before a Congressional committee who sneered at them in a way far different than when the heads of the financial industry showed up two months earlier. At that time, the politicians tripped over each other in their swoon for Wall Street and its Ponzi schemers who had concocted Byzantine ways to bet other people's money on unregulated credit default swaps, known in the common vernacular as unicorns and fairies.

But the Detroit boys were from the Midwest, the Rust (yuk!) Belt, where they made real things that consumers needed and could touch and buy, and that continually recycled money into the economy (shocking!), produced unions that created the middle class, and fixed my teeth for free when I was ten.

For all of that, the auto heads had to sit there in November and be ridiculed about how they traveled to D.C. Yes, they flew on their corporate jets, just like the bankers and Wall Street thieves did in October. But, hey, THAT was OK! They're the Masters of the Universe! Nothing but the best chariots for Big Finance as they set about to loot our nation's treasury.

Of course, the auto magnates used to be the Masters who ruled the world. They were the pulsating hub that all other industries -- steel, oil, cement contractors -- served. Fifty-five years ago, the president of GM sat on that same Capitol Hill and bluntly told Congress, what's good for General Motors is good for the country. Because, you see, in their minds, GM WAS the country.

What a long, sad fall from grace we witnessed on November 19th when the three blind mice had their knuckles slapped and then were sent back home to write an essay called, "Why You Should Give Me Billions of Dollars of Free Cash." They were also asked if they would work for a dollar a year. Take that! What a big, brave Congress they are! Requesting indentured servitude from (still) three of the most powerful men in the world. This from a spineless body that won't dare stand up to a disgraced president nor turn down a single funding request for a war that neither they nor the American public support. Amazing.

Let me just state the obvious: Every single dollar Congress gives these three companies will be flushed right down the toilet. There is nothing the management teams of the Big 3 are going to do to convince people to go out during a recession and buy their big, gas-guzzling, inferior products. Just forget it. And, as sure as I am that the Ford family-owned Detroit Lions are not going to the Super Bowl -- ever -- I can guarantee you, after they burn through this $34 billion, they'll be back for another $34 billion next summer.

So what to do? Members of Congress, here's what I propose:

1. Transporting Americans is and should be one of the most important functions our government must address. And because we are facing a massive economic, energy and environmental crisis, the new president and Congress must do what Franklin Roosevelt did when he was faced with a crisis (and ordered the auto industry to stop building cars and instead build tanks and planes): The Big 3 are, from this point forward, to build only cars that are not primarily dependent on oil and, more importantly to build trains, buses, subways and light rail (a corresponding public works project across the country will build the rail lines and tracks). This will not only save jobs, but create millions of new ones.

2. You could buy ALL the common shares of stock in General Motors for less than $3 billion. Why should we give GM $18 billion or $25 billion or anything? Take the money and buy the company! (You're going to demand collateral anyway if you give them the "loan," and because we know they will default on that loan, you're going to own the company in the end as it is. So why wait? Just buy them out now.)

3. None of us want government officials running a car company, but there are some very smart transportation geniuses who could be hired to do this. We need a Marshall Plan to switch us off oil-dependent vehicles and get us into the 21st century.

This proposal is not radical or rocket science. It just takes one of the smartest people ever to run for the presidency to pull it off. What I'm proposing has worked before. The national rail system was in shambles in the '70s. The government took it over. A decade later it was turning a profit, so the government returned it to private/public hands, and got a couple billion dollars put back in the treasury.

This proposal will save our industrial infrastructure -- and millions of jobs. More importantly, it will create millions more. It literally could pull us out of this recession.

In contrast, yesterday General Motors presented its restructuring proposal to Congress. They promised, if Congress gave them $18 billion now, they would, in turn, eliminate around 20,000 jobs. You read that right. We give them billions so they can throw more Americans out of work. That's been their Big Idea for the last 30 years -- layoff thousands in order to protect profits. But no one ever stopped to ask this question: If you throw everyone out of work, who's going to have the money to go out and buy a car?

These idiots don't deserve a dime. Fire all of them, and take over the industry for the good of the workers, the country and the planet.

What's good for General Motors IS good for the country. Once the country is calling the shots.