What do you do with an industry that has been losing billions of dollars, has an uncompetitive cost structure, is struggling to raise enough cash to fund itself, and is slow to innovate?
a) Short the stock, and wait for the bankruptcy announcement.
b) Hire an arsonist to torch the place in hopes of collecting some insurance money.
c) Lend it a huge amount of money at a ridiculously low interest rate.
If you chose A, you are of above-average intelligence and think quickly on your feet. You're
well-liked, held in high esteem by your friends, and are very attractive. You're also wrong.
If you chose B, you are either a criminal, a pyromaniac, an aspiring Mafioso, or you work at the Federal Reserve. You are also wrong and should stay well away from my house and family.
If you chose C, you are correct. Unfortunately, you are either a village idiot, a U.S. Congressman, or an auto industry executive. You are not good with numbers, investments, ethics, or the truth. You think you are well-liked, but behind your back people are constantly mumbling, "Wow. I feel sorry for the village that idiot comes from."
The socialization of America continues to run amok. With the nation busy quibbling over the relatively insignificant foreign and economic policy differences between McCain and Obama and with the distraction provided by the teetering of the global financial markets, the mere $25 billion that our U.S. Congress just approved in loans to the auto industry may slip through the cracks.
Remember the widespread consternation over the $29 billion "rescue" of Bear Stearns? Just a few months ago, $20-something billion was considered a substantial amount of money and caused quite a tizzy. Ah, the good old days. Since then, we've had an $85 billion "rescue" of AIG and are now facing an impending $700 billion bailout of the financial industry. In this brave new world, $25 billion is practically quaint. It's the change between the cushions of Uncle Sam's sofa.
Nevertheless, let's put that $25 billion in perspective. Our entire annual federal education budget is $56 billion. Homeland security is getting $34.3 billion this year. $25 billion is greater than the annual federal budget for each of the following agencies: Agriculture, Commerce, Energy, Interior, Justice, Labor, Transportation, Treasury, EPA, Judicial Branch, NASA, and the National Science Foundation. I'm not saying we should spend more on these departments -- just providing some perspective.
The combined market value of Ford and General Motors is $16 billion.
