It was not just the private jets that did in the Big Three’s efforts to extract billions from the taxpayers. It seems Congressmen, even the Democrats, have learned a thing or two in the last couple of months. We learn from this report that Congress is getting more particular about how and to whom they dole out money:
In two congressional hearings — one Tuesday before the Senate Banking Committee and another Wednesday before the House Financial Services Committee — Nardelli, GM’s G. Richard Wagoner Jr. and Ford’s Alan R. Mulally failed to coherently lay out those goals, lawmakers said, or make a compelling case for how federal aid will help achieve them.
“We kept asking: ‘What are you going to do with the money?’ And they said: ‘We’re going to save the industry.’ And we said: ‘Well, how are you going to save the industry?’ And they said: ‘We’re going to spend the money,’ ” recalled Sen. Robert F. Bennett (R-Utah), who quizzed the executives on Tuesday. “Even those who were very sympathetic walked away from that saying: ‘What can I vote for out of this?’ ”
Rep. Barney Frank (D-Mass.), who chaired Wednesday’s hearing in the House, said many lawmakers found it difficult to support a bailout for the auto industry so soon after approving a $700 billion rescue for the financial sector that has failed to calm to the markets. Instead of making more loans, some banks are hoarding the money or using it to buy weaker firms. So when the auto executives provided evasive answers, Frank said, many lawmakers experienced a bad case of déjà vu.
And if that is not good enough news, it seems that the idea of a prepackaged bankruptcy is gaining traction:
Dodd said he also wants to explore the idea of a bankruptcy in which the companies work out agreements to restructure with suppliers, lenders and labor, potentially supported by government help.
Bennett, who is close to Senate GOP leaders, said many Republican lawmakers also want a clear explanation of “why bankruptcy isn’t an option.”
This is progress. If Congress has discovered that shoveling money out the door is not guarantee of success, that bankruptcy may be an appropriate forum to rework the auto industry, and that the public is fed up with bailout mania that’s evidence of a fairly steep learning curve.
If we can get them to grasp the folly of tax increases and card check legislation, we will really be heading in the right direction.