Tweet [1]
This [2] (HT: Drudge) [3] is supposed to be serious rather than funny. At the top of the article, the head of Chrysler threatens that if the government doesn’t bail out the auto companies, it could trigger a Depression. Then this:
Congressional leaders are reviewing
three separate survival plans from the automakers in preparation for
hearings Thursday and Friday, as they weigh whether to call lawmakers
back to Washington for a special session next week to vote on an auto
bailout.Officials at the White House and the Treasury and
Commerce departments are also scouring the automakers’ plans. White
House press secretary Dana Perino said it is "too early to say" whether
the companies have outlined a path toward viability that justifies new
federal assistance."It sounds to me like the companies have
given this a lot of thought and are willing to make some tough
decisions," Perino said. "We just need a little more time to pore
through the documents.’"
Let’s look at the verbs: reviewing, scouring, poring, weighing.
To what purpose?
Congress and the White House are going to decide whether the plans are sufficient for a viable future of the auto companies?
Why don’t the Big Three save the money it takes to put together Congressional testimony and the time it takes for the people in charge to make the trip. Why don’t they just take out ads in the Wall Street Journal and the New York Times outlining what they’re going to do with the money. Then they can try this really novel idea. They can sell bonds and borrow the money. If the plans look good, people might lend them the money. If the plans are lousy, they won’t get the money.
Now I understand it’s hard to borrow money when things don’t look so good for your future. But that’s why Congress shouldn’t be lending them any money. Particularly because politicians don’t have an incentive when they’re spending other people’s money to weigh, review, scour and so on with an eye toward the profitability of the plans.
When people have lost faith in you because you’ve performed poorly, you have to pay a premium to get them to invest. That’s a feature not a bug.
The other thing I’d tell those execs: why don’t you spend less time begging and more time trying to save your companies the old-fashioned way, by improving your product?