Nationalize Detroit, Too
The bailout isn't enough and won't work.
Several months into the Detroit bailout follies and with no end in sight, it's time to seriously consider what we're going to do next. The bailout isn't enough and won't work.
Every day, it seems, financial markets whiplash themselves over nationalization. Obviously, the jury is still out on whether nationalization is the inevitable fate of too-big-to-fail institutions such as Citigroup and Bank of America, already underway via the vast ongoing federal prop-up of AIG, or such a horrific notion that even the French wouldn't try it again.
Will we or won't we? Regardless, it seems that a key sticking point revolves around management: The current roster of financial executives hasn't exactly distinguished itself, but whom would the government choose to replace them? Chances are, the Beltway designates would find themselves quickly racked on an angry sea of crisis.
Fortunately, we don't have to grapple with this question when it comes to the U.S. car business. The executives of General Motors and Chrysler, the two Big Three automakers that have thus far taken bailout money, are abysmal and will almost certainly not survive the year (although I underestimate GM's Teflon-coated Rick Wagoner at my own risk). At Ford, Alan Mulally has managed to dodge the acetylene ire that has been focused on his brethren, but given FoMoCo's precarious situation of looming debt crisis, he's really just the leper with the most fingers.