The market liked the prospect of an auto bailout. On Monday, General Motors stock soared 21 percent; Ford's jumped 24.3 percent. Up shot the market as a whole. From the smoke and ruins came hoarse cheers. The sound of a bugle blowing "Charge" rode the wind. Hooray -- today's U.S. cavalry, wearing banker's gray and red stripes, had come to lift the siege of Detroit.
And so it may come to pass. And so may much else for which the general population may eventually show itself less grateful.
There comes to mind a cautionary slogan I first heard in the '60s: He who pays the piper calls the tune. Indeed, and why not? Is government, in the end, a philanthropic entity? For what it does, it wants a return. Taxpayers should expect no less.
The auto bailout is setting up the auto industry for what? Probably the reverse of success. Possibly its marginalization by Toyota and Honda and Nissan and Daimler Benz and Volvo. This is for sound reasons originating in that piece of wisdom about the piper and his tune.
The auto rescue bill sent to the White House for review on Monday predictably -- and you might say properly -- sets the federal government up as grand overseer of the auto business, with plenary powers to decide what the industry needs and what it should do.
The president (read: Barack Obama) is to name an executive branch functionary who will supervise the bridge loans to Detroit. By the end of next March, the industry will submit to this worthy a restructuring plan "for long-term viability and international competitiveness, including repayment of government financing, compliance with federal and state fuel efficiency requirements, achievement of positive net present value, rationalization of costs, capacity and proposals for restructuring existing debts. "
This functionary -- called "President's Designee" -- "will request from Congress additional powers and authorities he deems necessary to avoid disruption to the economy or to achieve a negotiated plan." Or he can submit his "own plan for long-term viability."
There's more to it than that. The proposal calls for a tight rein on executive bonuses; for a ban on so-called golden parachutes; for divestiture of company-owned aircraft. Ah. And "Presidential Designee will prioritize allocation of funds to Auto Manufacturers."
In the meantime, Sen. Christopher Dodd says GM should dump Rick Wagoner as chairman.