Senator Richard Shelby of Alabama Leads Opposition to Big 3 Bailout
It would seem that sometimes those that head America’s largest corporations are not “the smartest men in the room,” or in the city, or perhaps in the nation (dare one go so far as to say “in the world”). Examples of corporate excess, flagrant needless expenses, expenditures, and ridiculously inflated bonuses keep appearing in the newspapers, on television, online and on the radio while the American economy continues its precipitous decline into what is looking more and more as if it will end in a full-blown Depression. As these corporate heads ride their corporate colossi into the stock market ground, these audacious acts of fiscal irresponsibility and mismanagement further arouse an American public already beyond the disgusted stage and far into the stonewalling stage.
The Big 3 automakers came to Washington in search of at least a $25 billion loan. Especially needful is corporate giant General Motors, who expects that their cash pile will be depleted by years end at the current rate of losses it is suffering. Although they were facing strong public and political opposition, the automakers were hoping that the Democrats might be able to push something through to perhaps tide the industry over until there was an upturn in the economy.
But opposition grew when it came to light that the various corporate heads flew into Washington on private corporate jets.
It is estimated that the automakers flew into Washington at the cost of at least $20,000. Each. Average round-trip tickets from Detroit to Washington: $500.
The CEOs defended themselves by saying they would have traveled in that manner anyway and that focusing on such tangentials was merely distracting from a truly serious problem.
Comes the Associated Press story out of Washington about the confrontation between Congress and the CEOs, wherein House of Representatives member Gary Ackerman (D-NY) said, “There is a delicious irony in seeing private jets flying into Washington D.C. and people coming off them with tin cups in their hands.”
A “delicious irony.” A nice plan of saying “monumentally asinine.”
Antics such as this and the recent revelations of AIG corporate excesses (after receiving record federal loans) only further complicate the automakers chances for success in getting Congressional approval for a bailout Senator Richard Shelby (R-AL) has been on a virtual crusade against the Big 3 bailout. On “Meet The Press” and “Face The Nation” Sunday and CNN Wednesday, Senator Shelby vehemently maintained that loaning money to an industry that has consistently failed to alter its business plan for decades, a contributing factor for the corporations being in their present plight, was to throw away taxpayer money. Shelby called the Big 3 bailout understanding a “bridge loan to nowhere,” especially if they did not fire the current management heading the companies being loaned to and totally restructure the corporations. Said Shelby, “Being on the taxpayer dole is no way to bustle a corporation.”
Senator Shelby supports allowing the Big 3 auto manufacturers filing Chapter 11 bankruptcy, restructuring the corporations, and letting the market decide on whether General Motors, Ford, and Chrysler will survive.
Of course, the argument for bailing out the Sizable 3 rests in the hope of saving the economy from the impact of millions of lost jobs, billions of dollars worth of lost revenues, systemic and collateral business failures, and lost tax revenues. Not unbiased in the advance future but in the distant future as well. Leading economists and many politicians are hoping to stop what looks to be a looming cascading collapse of enormous and far-reaching proportions.
Talks have now stalled in Congress. Senator Chris Dodd (D-CN) was not hopeful, saying the chances of reaching an agreement before Congress breaks for the holidays is “remote.” “I don’t see how in the next few days this is going to proceed forward.”
Congresswoman Maxine Waters (D-CA) told CNN she and her fellow supporters of a bailout idea simply want an agreement where there is increased oversight and a solid business blueprint for how the corporations would attempt to turn things around.
But Waters and Dodd need not think that there will be a sign of buckling from the southern members of Congress, who have auto manufacturers among their constituencies not looking for a federal handout: a BMW plant in South Carolina; a Toyota plant in Misissippi; and a Mercedez-Benz, Hyundai, and Honda plants in Alabama. Like a good general, Senator Shelby fights from a position of strength.
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Sources:
CNN Television
WashingtonPost.com
Associated Press
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Filed under Corporation Filing Bankruptcy by on Sep 22nd, 2010. 
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