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Okay to Punt?

Posted by David A. Peterson on 10. December 2008 in Economics | ∞

Well no it is not okay to punt but that is exactly what our elected leaders in Washington, DC are doing. The big three automakers need a bailout (sort of like a loan) to continue operating. We have heard days of testimony. We have seen private jets, CEOs in cars, and both houses of Congress put on a show.

 And what a show it is. Congress is finally getting a little gun shy about all of this bailout money. Luckily for them they already approved $25,000,000,000 for the automakers to “retool” their assembly lines towards the new green car revolution.

Also it just happens that this new green revolutionary technology hasn’t even been developed yet, so… they might as well just use that money that is just sitting around. The Congress is going to allocate $15,000,000,000 of that previously authorized $25 billion to help the big three automakers through this tough period.

To be fair in the past the Congress has helped other industries that are vital to the nation. Airlines come to mind. Right after September 11, 2001 the government stepped in to make sure that the entire industry didn’t go down the drain. Without this help who really knows what would have happened. We can only speculate about the possible outcomes but what we do know is that the industry is still here.

Way back in the early 1980’s Congress again gave money to Chrysler to help them avoid bankruptcy. Lee Iacocca was at the helm and he steered the automaker through some really hard times. However, I think Mr. Iacocca was really a sales person at heart, if you can remember that far back he sold the government 1,000s of those ugly K-Cars. Without that bailout I doubt the government would have subjected their employees to drive such miserable looking cars. 

Here we are again, another bailout is looming and yet Congress doesn’t have the stomach to give it an actual up or down vote. They are going to PUNT! I can hear it now on the campaign trail… “I didn’t vote for the big three automaker’s bailout,” even though that same person in the quote did give them the money that is already earmarked for a different purpose.

This is just a lack of leadership. Congress is punting instead of governing. If the leaders in Congress don’t have enough votes to pass legislation authorizing another bailout then they shouldn’t be passing out any money.

 Here’s why: Let’s say the $25,000,000,000 for retooling was a good idea, or even a great idea. Congress is going to spend $15,000,000,000 of that money on something totally unrelated. The Congressional leadership told us that they needed $25 billion to retool? If so, I don’t see that money in the bank anymore. Where is the additional $15 billion going to come from when it is needed?

Or… was the Congress just “fibbing” and the $25 billion appropriated for retooling was just a “rainy day” savings account for the automakers.

When you have a lack of leadership you can assume that you don’t know what’s going on. You probably haven’t been told everything or even the parts you probably should know. Congress is only punting because it either doesn’t know what to do or it fibbed on the original $25 billion for retooling. Either way we all deserve a little more leadership right now.

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