I've been pilloried for saying it but I will repeat it... the auto bailout is a bad idea

Folks, I have to repeat myself... the auto bailout is a bad idea that keeps getting worse.

There are two clear cut reasons for this:

1. The government should not be loaning or in any other fashion giving money to private industry.
2. The last thing we want is the government having access to boardrooms
   

Both of these are equally important reasons. Not the least of which are the government can't satisfactorily perform their constitutionally mandated obligations.

Now Chris Dodd is starting to dictate terms not just for this bailout, but he is mandating terms if they want to get future loans. Dodd is saying Chrysler has to merge and GM has to replace their CEO. Now kids, let me tell you why this is patently disingenuous... both of those are forgone conclusions, but even if they weren't the government should not be setting any conditions on these loans that the shouldn't be making in the first place. (Added, since I wrote this the article linked to above added that Obama also said that some company execs should lose their jobs.)

Once the government starts to force it's way into the boardroom of one company it will get an uninsatiable appetite to get into more.

When the government guaranteed the loans for Chrysler the banks who made the actual loans put had access to the board and made sure that getting their money back was a priority. In order to get their money back they made sure Chrysler reinvented the way they did business, Lee Iaccoca was in a position to lead such change and did so.

The current crew in Detroit are not in a position or of the mindset to change. If the Big 3 do not file bankruptcy in a structured manner, assuring loans (perhaps government insured) from banks as part of the filing, it is a certainty that they will in the future. So they will declare bankruptcy AFTER getting the government loans and the government will be unsecured creditors and not be in a position to recoup the funds. And even if the government makes the loans so they are secured debtors there is no doubt in my mind that they will make sure other creditors get paid first in order to "save" those industries first leaving the taxpayer sucking hind tit.

Now notice Obama and Dodd have both said that there is a need for management change, Dodd even identified Rick Wagoner as being one to be replaced. Well, no crap, he piloted GM from $90 a share to $2 and change. The board should have replaced him, their failure to do so only underscores that there is no chance of the current brood in Detroit changing their business plans and the effecting the necessary change.

If the share holders don't care that their company is going bankrupt then the government should not step in to prevent just that from happening.

It is not the function of government to bail out private industry, it is not the job of government to run private industry, it is not the job of government to prevent private companies from tanking if their shareholders don't care.

Let the automakers declare bankruptcy and start anew with financing (if the government wants to force anyone to do something, they have already given the banking industry 350 Billion, they should force the banks to open up the credit lines, that was the sole purpose of the banking bailout... if that doesn't work the government can offer to guarantee the loans) that way they can slough off their legacy debt. If not the bailout will be annual events and the more the government "invests" the more they will have to keep tossing at the companies so they don't lose their money.

I predict that the automakers will declare bankruptcy anyway, so they should do so now and try to succeed befire they are subsidiaries of the US Government.