Will D.C.'s strings steer or strangle auto industry? -- Brian Dickerson, DFP columnist

[Bozita]

http://www.freep.com/article/20081210/COL04/812100322

Will D.C.'s strings steer or strangle auto industry?
BY BRIAN DICKERSON • FREE PRESS COLUMNIST • DECEMBER 10, 2008


The disclaimer that a superficially attractive deal comes with "some strings attached" typically warns the prospective buyer that certain provisos may render the deal less attractive than it appears.

So House Speaker Nancy Pelosi's assurance that lawmakers fixing to lend the auto industry $15 billion have affixed "plenty of strings" to their offer is anything but reassuring.

Pelosi naturally insists that Congress will use its reins only to steer the Detroit Three in a direction that benefits the public as well as the companies' stockholders, employees and executives. And no one will be happier than this Detroiter if our elected representatives in Washington honor that promise.

But there are a couple of good reasons to be skeptical that they will, and I would like to take note of them here, if only for the sake of being able to say "I told you so" when we meet in the same soup kitchen or breadline a few years from now.

Overseers in glass houses

The primary reason to be skeptical is that the congressional enforcers tasked with holding Detroit's feet to the fire have done a glaringly atrocious job reforming their own, ahem, industry.

The same lawmakers lambasting the auto industry for promising its retirees more benefits than it can afford continue to promise their own constituents more benefits than the U.S. Government can afford.

The same Congress that wants to crucify the Detroit Three for their preoccupation with short-term profits is notorious for strategic visions that extend only to the next election.

In fact, one of the conditions of the congressional plan is that the loan recipients must demonstrate measurable progress toward long-term sustainability -- whatever that is -- by the first quarter of 2009. The obvious danger is that auto executives will be as preoccupied with satisfying Congress' short-term political needs as they were with satisfying Wall Street's myopic financial demands.

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[99th_Monkey]

1. Congr. gave Paulson $700 Billion with "no strings" .. how has that worked out so far?

not so good.

good Lordy .... ANY one who "loans" billions of dollars withOUT any strings is just plain stupid
or worse.