How not to rescue the Big Three
Congress must not loan $25 billion to a US auto industry that isn't doing enough itself.
Car owners know the tough call: When do you stop putting money into a rickety auto? Congress faces a similar decision this month. Should it put money into a failing US car industry? The answer would be simple if Midwest swing states weren't up for grabs in the presidential election.
Both John McCain and Barack Obama have backed a plan in the works on Capitol Hill to provide more than $25 billion in loans to the Big Three automakers. That political stance may go down well in the high electoral-vote states with US car plants (Michigan, Ohio, Indiana, and Illinois). But voters elsewhere should ask: Will these ailing companies and their unions really accept radical reform, ensuring that these loans are paid back?
To persuade US lawmakers to pass an emergency loan for them within weeks, executives from General Motors, Ford, and Chrysler were out in force at the party conventions in St. Paul, Minn., and Denver to plead that the industry is "deserving" of government credit.