Need Financial Assistance? Change Your Name To Chrysler

Today President Bush signed a massive spending bill into law, part of which "sets aside $7.5 billion in taxpayer funds needed to guarantee $25 billion in low-interest loans to help General Motors Corp, Ford Motor Co and Chrysler LLC produce more fuel-efficient cars and trucks." Wall Street's woes managed to keep this off the radar screen for most Americans.

The big three auto makers made two arguments in support of the loans. First, that the loans are necessary to prevent job cuts. Our experience in Wisconsin demonstrates that auto makers are more than willing to take the money and cut jobs anyway. In 2004 the Doyle Administration handed over $10 million dollars in incentives to keep GM in Janesville. The grants required GM to keep over 3,000 workers at the Janesville plant until 2010, but as of last month less than half of that number were employed there. In mid-September Governor Doyle and other politicians traveled to Detroit and Washington to beg GM to keep the plant open.

The more fascinating argument is that the loans are needed to help the industry meet federal directives to produce more fuel efficient cars. In essence, Detroit accused Washington of creating an "unfunded mandate" to produce cars that get good gas mileage. When's the last time local governments--or small businesses--received a massive, low-interest federal loan to meet a mandate? Doesn't happen.

After the feds bailed out Lee Iacocca's Chrysler in 1980, Tom Paxton wrote a great song called "I am changing my name to Chrysler." Arlo Guthrie recorded a cover of it in the 80s. Enjoy.