Automakers grilled while financial institutions feast

Automakers grilled while financial institutions feast

“Federal regulators said Tuesday they are making more than $40 billion available to support several credit unions that suffered losses from mortgage securities.”

That’s the lead paragraph of a short Associated Press story Tuesday about an additional $40 billion being doled out by Treasury Department bureaucrats to 28 corporate credit unions on a day that Congress and the Bush administration continued the national pillorying of the American auto industry over $15 billion in loans.

This is insanity.

The president and far-too-many congressmen are willing to endanger the nation’s largest remaining industrial employer with their political sleight of hand. While we’re all watching their right hands paddle GM, Chrysler and Ford, just as they want us to do, they’re using their left hands to throw money at financial institutions.

Another piggybank

Note that this $40 billion for the credit unions is not coming from the $350 billion Congress authorized for financial bailouts. The Bush administration has already run through that money (which is why President George W. Bush was adamant that no money for the auto industry would come from that source). The credit unions’ billions will come directly from Treasury’s Federal Financing Bank, thanks to congressional action in September that increased the amount the National Credit Union Administration is allowed to borrow at any one time from $1 billion to $41 billion.

We doubt that any of those 28 credit unions has been told to fire their executives. That kind of tough talk is apparently reserved for use only against automakers.

On Sunday, Christopher Dodd, D-Conn., chairman of the Senate Banking, Housing and Urban Affairs Committee, said on CBS’ “Face the Nation” that Rick Wagoner, chief executive of General Motors, “has to move on.”

We don’t know (and we doubt that Dodd does) whether Wagoner is the best man to be running General Motors. But we’re open to the possibility that he is. Has he made mistakes in the eight years he has been the head of GM? We’re sure he has, but certainly the case can be made that he hasn’t run his company as poorly as a passel of Democrats and Republicans have been running the nation for those same eight years.

It is extraordinary to have one of the key senators in the debate over loans for the auto industry call for the removal of a specific executive. That strikes us as a cross between micromanaging and gross intimidation.

No blank checks

Enough is enough. No one should be getting a blank check from Congress or the White House. Not bankers. Not brokers, Not insurance companies. Not credit unions. And not automakers.

But neither should the auto industry and the millions of men and women whose livelihoods depend on it become the whipping boys for Congress and the White House, both of which are eager to give the impression that they are now tough as nails in protecting public dollars.

If that were true, the national debt wouldn’t have nearly doubled from $5.7 trillion to almost $11 trillion since 2000.

The debate of the Big Three is verging on a politically corrupt mess. Republicans — who bill themselves as the protectors of free enterprise — are among those clamoring for government to have a stronger hand in how Detroit’s Big Three do business. It’s no surprise that some of those Republicans come from Southern states where Japanese, German and Korean car companies have set up nonunion plants.

It is appropriate for Congress and the White House to agree on an overseer who will protect the public interest as the automakers draw on federal loans — dubbed a car czar. But there is time for that. Only yesterday, the Senate finally confirmed Neil M. Barofsky, a New York prosecutor, as the chief watchdog of the $700 billion financial bailout program. The first half of that money is already gone. The automakers are seeking loans of less than 10 percent of what the Bush administration has provided financiers.

It’s time for Congress to drop the double standard and make a commitment to help save the American auto industry. The Big Three are at least as important as the 28 credit unions that were quietly given $40 billion Tuesday.