When Congress rejected the automaker's bid for a bailout, they told them to come back when the big three had a plan to get their business moving. Congress even wanted to see a plan for making the big three more heavy in energy efficient vehicles. In other words, before Congress invested in the big three, they wanted to see a plan for where their investment would go. Of course, we have a name for someone that does this, venture capitalists. Typically venture capitalists providing funding for start ups but they don't have to. Whenever a business goes and seeks capital to inject into their own business, those they go to are venture capitalists.
There is a certain absurd irony into Congress venturing into venture capital. Obviously, it is foolhearty and ridiculous for a bunch of politicians to take on the role of venture capitalists because they barely understand their own jobs. GM, Chrysler, and Ford, can come back with a plan but it isn't going to mean anything to a bunch of politicians. Professional venture capitalists have enough trouble figuring out whether or not a business strategy in need of capital is a good idea. The idea that Congress people will figure this out is not only stunning, but it shows an absurd amount of hubris on the part of all those that are asking for it. Yet, by asking for a plan at least its better than just giving them money.
The problem of course is that by Congress playing venture capitalists what they are really doing is exposing the futility and nonsense of this bailout. The reason this bailout is a bad idea is exactly because Congress is not a venture capitalist firm. If the big three need money, there is a market where they can present their recovery plan and get money. That market has already told them no which is why they are now sitting in front of Congress so they can give them money.
The fact that real venture capitalists have rejected the big three should have been reason enough for Congress to reject a bailout out of hand. Yet, the big three presented a sob story about the fabric of our society crumbling. Real venture capitalists don't much care about the fabric of society. What they care about is making a lucrative venture. Clearly, when this was merely about Dollars and Cents, the big three had no takers. Now that it is based on some other less tangible concept, there is no doubt that Congress will go ahead and spend tax payer money in order to fund an operation no one using their own money ever would.
So, soon the big three will venture back onto Capitol Hill. They will have nice graphs, charts, and projections. They will tell the pseudo venture capitalists known as Congress exactly what they want to hear. Congress will then tell us, the tax payers, what they think we want to hear. Then, we'll all pray and hope that the realities of the market known as our economy and the automobile will somehow stop being cruel and fair. For a sob story and energy efficient vehicles won't actually make a bad business good again. It won't drop their costs, and it won't end their terribly negotiated union contracts. Even if they had a plan for all of this, the likely ultimate outcome would still be failure. That's because companies in this much trouble file bankruptcy not look for venture capital. That's another reason why real venture capitalists wanted no part of this. Congress can feel good for a minute or two and tell us all they didn't just give away our money. They saw a plan. They just aren't at all qualified to judge that plan, and those that are have already judged it a failure.
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