Congress is Clueless

I just got around to reading the actual bill that was presented in Congress on Wednesday. I'm embarrassed by how overly simplistic the 37 page document is. Read it here.

The document was basically a term sheet with standard legal gobbly-gook around the edges. All things considered, for 37 pages, it as a pretty weak term sheet. The document has little/no substance on restructuring or milestones and clearly demonstrates how incompetent our Congressional leadership is. Mainly because these guys are debating the nits & nats of something that has no teeth. I could have written this bill in one page (although I wouldn't have).

My favorite part was this ridiculous clause:
During the period in which any financial assistance provided under this Act to any eligible automobile manufacturer is outstanding, the eligible automobile manufacturer may not own or lease any private passenger aircraft, or have any interest in such aircraft, except that such eligible automobile manufacturer shall not be treated as being in violation of this provision with respect to any aircraft or interest in any aircraft that was owned or held by the manufacturer immediately before receiving such assistance, as long as the recipient demonstrates to the satisfaction of the President’s designee that all reasonable steps are being taken to sell or divest such aircraft or interest.

That took up half a page. I find it pathetic that through the entire document, which resembles an overly-wordy standard financial/equity/debt term sheet, they include this provision. There's very little mention of other operational targets, but, hey, let's make sure they fly commercial.

Auto Industry Bailout

This is ridiculous. I see absolutely no reason for Congress to step in and bailout the domestic auto industry. Why didn't Congress bailout Webvan in the 90s? What about Yahoo? They could use some cash. Global Crossing? Enron/PG&E? What about the hundreds/thousands of other small businesses that are struggling because of the economy? Heck, what about the hundreds of businesses that are failing because they're poorly run. Where do we draw the line?

The Big 3 are failures and have been since the 70s. The domestic auto business is structurally flawed (dealers, unions, overcapacity, and over-extended) and has proven incapable of innovating (poor design, terrible quality, no fuel-efficiency improvements, and out of touch).

The United States purchases 12-16 million new vehicles per year. Market share of the Big 3 has declined precipitously since the 70s and that has nothing to do with the economy. The companies are failing because they have been mismanaged over decades. Period. Full stop.