No, when you're asking for lots of other concessions from them and they are agreeing to them you should charge a reasonable rate of interest, not more than the current market rate for this type of loan. According to what I was hearing on NPR today the auto makers agreed to both the idea of an “auto czar” (I hate that phrase.) and an oversight board to make certain the loans are being spent wisely. Given those conditions and the concessions already granted I think we're getting towards something that just might work for everyone.

http://www.bloomberg.com/apps/news?pid=20601087…

Have a good weekend, early, y'all. Will check on the gossip vs. real news (like this, e.g., Detroit's predicament) on this site while I head out from Detroit (in my Ford vehicle) to Iowa to check on things out there. Who knows, even if Detroit is turned down (other than for a federally managed and financed bankruptcy of GM and Chrysler — here's to a slimmer independent Chevrolet someday soon) you might learn of not only more remarks like Bernanke's (see above) but even a willingness of Paulson to “reconsider” foreclosure assistance and even to take Barney Frank's advice about giving Sheila Bair's FDIC plan more attention. “Change” of some kind is truly coming.

http://www.bloomberg.com/apps/news?pid=20601103…

Wait until after January. Did someone say “borrow and spend,” to “help” people, states, and cities?

No bailout should be given to _anybody_. But the financial bailout is tained badly enough, it might have been better to just do a “citizen's dividend” of that money as a handout to taxpayers (i.e., to individuals), even though so many would simply save and invest whatever wasn't used to retire debt. Would it have been more effective (and could something like that, if done today, be more effective)? I would say, yes. Even though morally it shouldn't be done, it's better than favoring some Wall Street firms (and financing a consolidation of the financial industry) while letting others fail.

[NOTE: So far, the State of Michigan hasn't been interested in using any of the State's pension funds to keep the Detroit Three alive until that "astronishingly good," "very, very bright" future is reached. From 12-if-lucky currently to 18 million units or more? Really? After how long a wait?]

http://www.detnews.com/apps/pbcs.dll/article?AI…

Why should a failed model be perpetuated? Why are Toyota, Honda, and Nissan not about to fail?

Meanwhile:

http://www.bloomberg.com/apps/news?pid=20601070…

gfranks007 is right; what good will it do the auto companies to get this money if they can't sell any cars? At the end of the day, they need to sell cars, but if folks in the country don't have the money to buy them, they're stuck.

Amongst all the whining and description of it as a bailout and a handout it is being completely lost that if people only pay attention and get past the constant repetition of the phrase bailout, a line of credit is exactly what is being asked for. In fact the head of Ford thinks that they can weather this with their cash on hand and planned cutbacks but they'd like a standby line of credit of $9 billion in order to make their vendors, dealers and the stock market feel better about their viability.

There might still be a bailout, if not to repay the UAW for delivering for Obama and to give unions a future chance to go backward to the way things used to be, then to avoid a deeper economic slump that would not be limited to Detroit metro. But to prop up these long-failed companies makes no sense. (Besides, Ford at least is showing signs of some change — most likely due to an outsider running the company.)

It's bad enough that the UAW is still engaging in fits and starts in long-overdue reform, but Chrysler already is a goner (it has tried and failed to merge in the past, and its plan now is simply to merge in the future), and why does GM deserve to die, ultimately? Because of what its financial head said, that's why — GM has no Plan B, and cannot conceivably remain in business without a bailout. That alone should settle it. (As for Ford, if either of the other two companies goes bankrupt, it will, so that it is competitive — reorganization and cost shedding that is long overdue.) I suspect what the Congress must be thinking now is, exactly on what grounds would a bailout of these companies truly be justified? (Note that we can discount the three million job loss figure from Center for Automotive Research, and the recently rosy-future-for-Detroit-if-it-just-gets-a-bailout-now testimony in Michigan from David Cole of that organization, which is a Detroit arm. We don't see the modern auto industry, such as Toyota, Honda, and Nissan, about to go bankrupt, nor predicting a rosy future, for that matter.) Exactly why would or should Congress give these companies anything?

“A full 70% of respondents indicated that a bailout is unfair to taxpayers. In addition to being unfair, the poll showed that a majority of those surveyed think a bailout would not help the economy.”

http://www.thetruthaboutcars.com/autoextremist-…

Here are 20 direct questions for Wagoner, Mulally and Nardelli.

http://www.thetruthaboutcars.com/bailout-watch-…

http://bigthreeauto.procon.org/

Also there is the matter of bailing out Wall St. but not Main St. – the latter of which is asking for far less money as well. If they can be held accountable and prove they have a viable model from here on out, then I think it would be a mistake not to give them the money. I don't like “bail-outs” anymore than the next guy, but we have to look at the big picture here.