a) Any money we give them will only go to bailout bondholders and creditors, both of whom shouldn’t be bailed out under any circumstances, since they acted as enablers in this fiasco. To recapitalize them without discharging debts would, as mentioned by someone above, cost $100’s of billions.

b) Structurally they are both permanently impaired; they can’t shed dealers except at high buyout cost, they can’t shed workers or entitlement obligations, and they can’t shed/shutdown brands without buying out dealers, and P.O’ing customers no matter what they do. This self-constructed straitjacket is mostly why they can’t remain viable even if we give them $100B – they’ll just be back for more in another year or two.

Unfortunately, the only way to for them to remain viable going forward is a federally supported pre-packaged C11 bankruptcy with gov’t help for pension/healthcare obligations as well as interim Debtor in Possession financing. Both can be fully rehabilitated as highly competitive companies with good worker wages/benefits, but only after they shed excess debt, unnecessary product lines and dealers, excess labor (the literally insane ‘jobs bank’), and offload (BK reduced) legacy benefit costs to the gov’t where they belong anyway. That still doesn’t get them whole, because many of their key parts suppliers (Delphi/Visteon) are just as screwed up (Delphi in particular is still in C11 after a year due to extended wrangling over legacy employee benefits).

The management teams at Ford and GM have screwed up for the last 30yrs, and deliberately choose not to file C11 when they could/should have more easily 1-2yrs ago, specifically to force the gov’t to bailout their criminal stupidity. It would be the quintessence of moral hazard to reward this fraudulent behavior. I agree w. Krugman that we can’t let them liquidate because they are systemically important, but without fundamental C11 restructuring/reform they can’t be fixed.

No. F’ing. Way. to a non-C11 bailout.

how ’bout Congress establish a fund (say $50 Billion over 5 years) to “match” (similar to Highway Trust Fund) the dollars any city, county, or state raises to purchase new police cars that are made in the US that are either hybrids or get 35 MPG (with an increasing minimum over time?) so that the $25 Billion already allocated to retool the Big 3 would have a sort of ‘guaranteed’ future market for at least one particular line of vehicles ???

with such a program and pledges from the corps mgmt & unions, the way would be greased for serving them with a ‘bridge’ loan to get to 2010 or 2011 (a kind of alternate/addendum to Neil Young’s proposal)

All this makes Gordon Brown look like a freaking genius.

In a way, the bailout/no-bailout argument is a false, ideological argument. Those proposing the bailout should specify what that bailout actually is–what it entails, what the provisions are, and how those provisions are enforced. Until that happens, we’re arguing about…nothing.

Do you mean effectively “three different purpose streams”?

Because unless there’s a yard sale taking place, or there’s a lot of dipping into the cookie jars of dedicated trust funds like social security

[which theoretically should contain over 2 trillion bucks; except for some reason the Bush administration won’t commit to any number or allow Congress to conduct an audit] the only current source is increased debt.

Now, it seems to me that if I’m about to head off to see my friendly neighborhood banker/loan shark [Call him Ha nk the Banker.] and I’ve got a current financial profile that shows I’ve been getting almost 80% of my income from waiting on tables [The US is way up there with the combination funny financial instrument centers-vacation spots-emigration staging areas of Hong Kong, Luxembourg, the Bahamas and Fiji.], run on cheap, fatty fast food [The US is near the absolute bottom in agricultural GDP at less than 1% - whoa], and get the remaining fifth of my income from “industrials”, of which historically somewhere around a half has been connected to automobiles, I’ve gotta be prepared for the possibility that Hank might well tell me it’s all too messy, I need to get my act together, and don’t come back until I’ve gotten some serious financial counsel and frickin’ PLAN.

And I can expect Prudence the FinancialPlanner to tell me:

[1] if I’m hoping to get back on my feet waiting tables in THIS world economy, I oughtta shake my sillies out and get onto a regime of Reality Pills, pronto;

[2] I have to go to gym, cut the fat out my diet, and turn dramatically towards the arugula section, and if that costs too much at the supermarket, it just means I’m gonna have to grow my own; and

[3] since the only ‘growth’ potential is in industrials, but it’s gonna take a lot of time and energy and patience to get that up to where it can support the downturn in the tips jar from my waiter gig, fergawdsake don’t let the damn thing go down the toilet.

Given all that, I think it’s kind of reassuring to hear the incoming IC [that guy who’s coming IN to take CHARGE, and says he’s looking forward to it] say on 60 Minutes no less that if outgoing CI [that guy who’s such a COMPLETE IDIOT even members of his own party don’t trust him not to throw the rent money away at the dog track and on crack]: Hold On [auto workers] I’m Coming.

So, while if the current lame duck Congress and dead duck CI don’t get their acts together in the next couple of weeks, there’s gonna be some serious pain, it looks like there’s enough HOPE out there that things MIGHT get started in the right direction.

So, since it’s clear that the Big 2.5 ARE about to get some serious dough – what strings should be attached?