Multi-Vehicle Crack-Up

by Steven M. Cohen  •  Nov 20, 2008 at 11:17 am

http://www.buyselljump.com/2008/11/multi-vehicle-crack-up

I am writing in real-time, sitting here watching Nancy Pelosi, Harry Reid, Chuck Schumer, Barney Frank, and other Democratic congressional luminaries engaged in a high-drama press conference purportedly dealing with the auto industry bailout.

In the name of protecting the taxpayer, the little guy they say they're looking out for, they are demanding a "plan" from the automakers before they'll open the bailout purse strings. Putting on a collective stern face, accompanied by wagging fingers, they say they will press the car companies for meaningful change or there won't be any deal.

Oh, and part of that plan must include a prohibition on fat executive bonuses and golden parachutes, at the same time chiding the company chieftains for flying to the congressional hearings in their private jets. Yes, that must be why these companies are failing--the fat bonuses and golden parachutes have done them in!

Great stuff from the masters of populist claptrap. But one subject was highly conspicuous by its failure to be mentioned.

Passing without comment were the absurd union contracts, replete with legacy cost albatrosses, generous pay for no-shows, and obscene benefits, all of which have no rational connection to the reality of the situation in which these companies have put themselves.

Better to play the populist card with the executive excesses than address one of the substantive, fundamental reasons why these companies are failing and face the certainty of bankruptcy without a government handout, which itself will probably only forestall the inevitable.

This spectacle, this phony press conference, these sanctimonious homilies, are hard evidence that the fix is in. Democrats in Congress will go through the motions of holding the car companies to account, of pressing their tough-love agenda on behalf of the taxpayers. This approach, they hope, will provide them cover for the upcoming payback to the unions for their slavish dedication to Democrats. Union boss Ron Gettelfinger must have watched with glee. (And, for good measure, his Democrat enablers plan to throw in an end to the secret ballot. Dissenters had better wear sturdy headgear.)

The unions have offered nothing and little will be extracted from them. As a result, the most intractable defect in the American auto industry's business model will go unaddressed and uncorrected. And more good money will be poured down the domestic car industry rathole.

Pony up, Mr. and Mrs. Taxpayer. This is only the first of many debts to be repaid by Democrats to myriad special interests and zealots of leftwing social causes. It's like an added hidden tax while actual taxes will also be hiked, all during a serious recession. Democrats' magic trick will be to turn a recession into a depression before our very eyes.

Oh, and I forgot to mention, also in real-time, as this highly-staged event unfolds, the market is sinking faster than the resale value of a used Cadillac Escalade.

It's beginning to look as if this is the outcome Democratic politicians seek. It provides the perfect conditions under which to launch the New New Deal.

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