June 5, 2009 at 5:32 pm

Daniel Howes

GOP falls flat with its auto arguments

Congressional Republicans at some point might break through with their serial laments on the metastasizing auto bailouts-cum-bankruptcy -- but they haven't yet.

Thursday, a handful of senators led by Sen. Lamar Alexander, R-Tenn., proposed distributing shares in bankrupt General Motors Corp. to American taxpayers in recognition that their federal government soon will hold a 60 percent stake in the Detroit giant.

A second effort, pushed by Sen. Mike Johanns, R-Neb., would require the Obama administration to win congressional approval before spending bailout money on the companies. Which is about as likely as the United Auto Workers being accorded the status in bankruptcy of the unsecured creditors they actually are.

Wednesday, Sen. Kay Bailey Hutchison, R-Texas, co-chaired hearings designed to understand whether and why GM and bankrupt Chrysler LLC really have to close so many dealerships so quickly. Um, yes, they do. That's partly why they go bankrupt -- to cull dealers and reject myriad contracts.

In weeks past, Republicans in the House and Senate have lamented the creeping socialism of President Barack Obama's Treasury Department taking stakes in GM and Chrysler, presumably because they think voters under the age of 35 would know what that means and would care. Which they don't seem to.

There's no exit strategy, the Republicans say, adding: Nationalization is fraught with potential meddling; the rights of investors, namely bondholders, are being trampled; bankruptcy law is being bent to achieve political ends; the UAW is getting a sweeter deal than it otherwise would.

All demonstrably true, in some way, and all reminders that a) the president owns Detroit's rolling bankruptcy and b) the Republicans still are searching for an effective argument to counter Team Obama because c) so few people are squawking. It gets worse.

For what allegedly is the Party of Big Business and a champion of small business at the same time, the GOP's weak grasp of the pitiless decision-making necessitated by bankruptcy is exceeded only by its penchant for meaningless political statements. And, second, they mistakenly assume principle and fairness are driving the choices of the president's auto task force.

They aren't. The politics of a weak economy and good ol' "crony capitalism" are. Just ask the surviving UAW members whose base wages, health-care benefits and pensions are unaffected by their concessionary deal with GM, in particular. Yes, you read that right.

We know what would happen if GM's brass can't get through bankruptcy quickly, reverse declining revenue and sell more cars and trucks: GM would slouch toward liquidation, clamor for more federal dough or both; the UAW's sweet deal would turn sour; and the president would suffer an ignominious and expensive political defeat.

But what if GM succeeds? What if Obama's risk is vindicated and congressional Republicans get the double whammy of being wrong on the politics and wrong on their business analysis of the potential for a GM success? It's too soon to declare that outcome probable, but it is possible.

Look, I get the principles behind the Republican objections -- rule of law violated, government intrusion in private industry, public money used to prop up failing businesses and organized labor.

Harder to grasp is the GOP's split political personality: Its leaders, starting with the likes of Tennessee Sen. Bob Corker, wanted GM to go bankrupt. Then when it did, he wanted the General to spare its plant in Spring Hill, Tenn., while his colleagues amplified the complaints of dealers who didn't make the cut.

Either you want the cleansing of bankruptcy or you don't, fellas. Trying to have it both ways doesn't help your identity crisis in the Age of Obama.

dchowes@detnews.com">dchowes@detnews.com (313) 222-2106 Daniel Howes' column runs Tuesdays, Thursdays and Fridays. Catch him Fridays with Paul W. Smith on 760-WJR.

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