State jobless funds dry up

Clearly the Bush Tax cuts have worked. In order for an economy to be vibrant you have to let ultra rich people keep their money. The fundamentals of the economy are strong.

I'm "mad as hell" that the auto companies need this loan too, but it is a far worthier cause than the bank bailouts, which passed so easily. I see the banks got theirs,and still are not making loans, and then they lay off tens of thousands of workers to be on UI benefits paid by the governement. I guess we should all be white collar capitalist pugs. I see how the business model works now. I wonder if there are going to be some serious changes to SOX in regards to derivitives trading, or are we just going to keep letting the bean counters play the shell game with us.

Ditto XL.
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And I fully understand people being PO'd for bailing out an industry that has been screwing up consistently, not thinking forward, for decades.
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However, there's more to it than unemployment insurance for auto workers drying up. Many businesses and industries are tangentially connected to the auto industry -- suppliers, manufacturers, transport accross the nation and the globe. Also there are smaller smaller businesses (hardware stores, barber shops etc) that depend upon workers spending their wages.
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Allowing the American auto industry to fail would cause a cataclysmic chain reaction.

MJ, I think how you define "fail" is the real key. If you define it as completely ceasing operations, I agree the result would be catastrophic, impacting the related industries that you mentioned. If you define fail as being a company that is no longer competitive and able to stay solvent on its own, that has already happened.

I think there are legitimate arguments for a bailout, and I don't mean to trivialize them. However, I think the problems outweigh the benefits. First, the current plan is vague. A bridge loan to get GM and Chrysler to March solves nothing. They will be back in March asking us to get them through to July. Second, I don't see any reason to believe they have a business plan that will make them competitive. If they had concrete plans in place when they came hat in hand to Congress, I may have been more receptive. They didn't even know how much money they needed or have a plan for spending it. Ridiculous. Third, there is an alternative for failed companies and it is Chapter 11. Remove the stigma of the word "bankruptcy" and see what it really is - a break from creditors and an opportunity to amend obligations while still continuing day to day operations. You don't have to look far to see through to the real motives of people who oppose this. Officers and shareholders of the big three oppose it because they will likely lose their posts and their shares will become worthless. Labor, and thus the Democrats in their pocket, oppose Chapter 11 because a bankruptcy judge will have the authority to modify the collective bargaining agreement and force labor concessions. Fourth, where does this govt bailout end? I thought it ended with Bear Stearns. AIG. Fannie and Freddie. The bank bailout. Now auto? What industry is next in line? Should the federal govt bail them all out with borrowed money? How do they decide which industries/companies to bail out? If this auto bailout was the be-all-end-all of the bailouts that would right the economy, I may be more receptive to it. I have no reason to believe that is the case. Finally, the last reason is terrible oversight and vague strings attached to the proposed bailout. Nothing made me sicker than AIG executives going on a 400K "retreat" after getting govt money. The 700B bank bailout . . . who knows what is going on with that. Should we just hand over 30B to the auto execs and hope they do the right thing with it? What have they done to earn that trust other than running 100 year old companies into the ground?

As I said, I don't mean to trivialize the arguments for a bailout, and the biggest one in my view is the one no one talks about. The giant elephant these companies want to get rid of is their pension and health care obligations. If these companies go Chapter 11, there is a good chance the federal pension guarantee will have to take over the pensions. The health care, if we are talking retirees, will likely be Medicare/Medicaid. In other words, you and me will pay for these things. That, to me, is the strongest argument for a bailout - that we will pay for it one way or the other. This argument is much better than I see in the Swamp, e.g. Senate Republicans hate unions, etc. Still, on balance, with the vagueness of the plan in terms of details and dollar amounts, and the track record of these companies, I simply don't trust giving them billions of taxpayer money and think at this point it is throwing good money after bad.

Herbie H.,
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I share your concerns. I didn't mean that we should just fling money at the auto industry. You're right they have a long history of mismanagement and inefficiency, and they have no apparent plan in place for reform. But something has to be done to fix this, sooner rather than later.

The argument that the taxpayer funds should not be given to automakers to delay bankrupcty because taxpayers shouldn't have to pay for the failings of the the automakers fully takes into account that U.S. taxpayers are going to wind up financially helping autoworkers and employees at the companies that supply them one way or another. It simply insists that those employees qualify for such support on the same basis as employees in other industries rather than first through subsidizing uncompetitive legacy benefit and dealership costs.