The House passed a $14 billion bailout bill for the "Big Three" automakers tonight. And what a steaming pile of crap it is. Fortunately, it may not get the 60 votes it needs in the Senate. ALG put the whole thing into perspective:
December 10th, 2008, Fairfax, VA—Americans for Limited Government President Bill Wilson praised Senators John Ensign (R-NV), Tom Coburn (R-OK), Jim DeMint (R-SC), David Vitter (R-LA) and Richard Shelby (R-AL) for their efforts to oppose the $15 billion bailout package for the Big Three automakers.
…
“The American taxpayer cannot and must not be forced to perpetuate the mismanagement of the Big Three by financing failure. There is no excuse for putting taxpayers on the hook for keeping failed companies afloat that could much better be reorganized under normal Chapter 11 bankruptcy,” Wilson added.
Under Chapter 11 bankruptcy protection, companies have the ability to broadly restructure the scope of operations, redo labor contracts, and otherwise scale back in order to emerge from bankruptcy with a profitable business model.
“Everything that Congress says it is attempting to do, to create a deal to reorganize these companies, to return them to profitability, is precisely the purpose of Chapter 11 bankruptcy protection. The $15 billion bailout is just a reason not to go into Chapter 11. In fact, the real intention is to perpetuate bad management and Big Labor excesses at taxpayer expense,” said Wilson.
Mark Perry posted a succinct illustration of just why GM is circling the drain:
GM sales in 2007: 9,370,000 vehicles
Toyota sales in 2007: 9,366,418 vehicles
GM profit/loss in 2007: -$38,730,000,000 (-$4,055 per car)
Toyota profit in 2007: +$17,146,000,000 (+$1,874 per car)
So on average, it costs GM about $5,900 more to make a car than it does Toyota. The solution, according to the President and Congressional Democrats, is to give them enough money so they can continue losing four grand per car for a few more months.
Adding to the lunacy, Democrats have insisted that these money-losing, teetering-on-the-brink companies need to spend hundreds of millions, maybe billions, to completely retool so they can make more fuel-efficient and "greener" cars — as gas prices continue to plummet. Sure, let's force GM's cost of making a car up even higher! That'll help!
And don't forget the bill includes a "car czar" to tell the automakers how to make cars, what kind of cars to make, and how to run their businesses. "Car czar" is the media's name, not the formal title of the post. I suggest they call it Director of Economic Planning and Natural Resources and appoint Wesley Mouch to the job.
Contact your senators and tell them to oppose this disgusting, stupid, and costly corporate welfare scheme.
UPDATE: Earlier this evening, Instapundit said, "The bailout is unpopular with the public. I’m surprised that more GOP politicians aren’t taking an anti-bailout stance, since it’s an opportunity to align action with both public sentiment and small-govermnent principles." In case you haven't noticed, Glenn, a significant number of GOP politicians are clueless about both public sentiment and small-government principles!
