You say -

"They (US Automakers) have absolutely refused to innovate and come up with new ideas to stay competitive - all the while spending millions on lobbyists who whine to Congress that if automakers are forced to meet new standards, it will destroy them (and their workers.)"

The US Automakers are represented by a very powerful member of the US Congress (John Dingell) as well as the lobbyists. This is a short excerpt (intro) from his Wikipedia site -

"John David Dingell, Jr. (born in Colorado Springs, Colorado, July 8, 1926) is a Democratic United States Representative from Michigan and is currently the Dean (longest currently serving member) of the House of Representatives. He is the 2nd longest serving Representative ever and the 4th longest serving Congressman ever. Since 1955, he has represented a district that was first in western Detroit but has successively moved further into that city's western suburbs, currently Michigan's 15th congressional district.

With the Democrats' victory in the 2006 midterm elections, Dingell again became chairman of the House Energy and Commerce Committee, a panel he previously chaired from 1981 to 1995. According to the 2008 Congress.org Power Ranking, Dingell is the 4th most powerful congressman, preceded only by House Speaker Nancy Pelosi, Majority Leader Steny Hoyer, and Ways and Means Committee Chairman Charles Rangel, all fellow Democrats[1].

He is known by the friendly nickname, "Big John."

The above words pretty much say it all in my opinion. He has served as Chairman of the House Energy and Commerce Committee for many more years than any US President could ever hold office. He serves his constituency well but where does that leave the rest of the country? He's not the only player here but he definitely is "Big John"!

I also want to add that I think the big automakers SHOULD go belly-up to make room for newer blood. The fact that the government reinforces the solvency and monopoly of the big 3 makes it all but impossible for any other innovators to get into the business. Maybe we need them to go bust to make way for new ideas. Isn't that the way of capitalism?

Did anyone else see the movie Tucker? Having huge companies like that is never good for newer, smaller, more efficient business practices, which would generate competition for their way of life.

As it is, we would be able to buy those fuel-efficient Toyotas and Hondas much cheaper if the US automakers had not lobbied for import tariffs to ensure the price of US vehicles would forever be slightly lower than foreign.

How is that good for anyone but the auto manufacturers?

@Ben - I suppose that depends on whether I feel it's the governments place to invest taxpayer money to save failing businesses in a capitalist society or not. I'm actually a left-leaning independent, but I hate this notion that a company can reap all the profits when they do well, but if they fail, Uncle Sam will come save them. That undermines the very fabric of a capitalist society.

It's also very much against the founding principles of this country, which were based on a strong state-level government with weak central authority.

In your scenario, it's no surprise why the elected official would vote the way he did. In that situation, I may well do the same thing. Of course, I would be voting based on what was best for me and not the country in the long run.

That bailout... where's that money come from? The government doesn't just make it. They need to tax everyone to pay for a company's stupid fuck-ups. Now how is that right, or in the best interest of the employees?

- Chris

@Ben - the scariest part, I think, is that the international loan will eventually have to be paid back, and that can only mean even more taxpayer burden.

Unfortunately, there is one important concern that is unique to the United States that holds us back further from doing anything to the Big Three: transportation is our lifeblood.

We Americans have to travel farther to live than any other nation in the world. I myself drive almost 160 miles every weekday (yes, you read that right) just to get to and from work. We rely very heavily on cars, trucks, and SUVs just to survive. It's not as simple as, say, replacing cars with public transportation, as would be viable in some European nations.

For that reason, the automotive industry has an unbelievably strong chokehold on the American economy.

Ben, I know you are being hypothetical, and trying to demonstrate how a congresscritter might think, but this: 'On the one hand, bailing out the industry will prevent billions in lost revenue and save many tens of thousands of jobs ...' Oy! The 'lost' revenue wouldn't be lost at all, and neither would the jobs. Both would go to competitors. Honda and Toyota make LOTS of cars here in the USA. And those suckers run forever without having to pour a ton of money into repairs for them!

Here is the part where I resist the urge to get on my soapbox and rant about the crappy experience I've had with GM over the last nine years. I'm infuriated by the loan, too.

Oh, and this, from the original post: 'They want $25 billion in loans to upgrade their plants for production of more fuel-efficient vehicles.' Hello, but it seems like a good way to pay for the production of fuel-efficient vehicles would be to, you know, make them and sell them to people.

No money for these car companies. Not a cent. Clinton and Gore gave them great incentives in the early 90s to produce fuel efficient vehicles and they completely ignored it. They went with a short-term business plan to capitalize on the popularity of SUVs while ignoring the long-term risk of increasing gas prices. There are American car companies who saw this coming and acted appropriately, and they'll be more than happy to pick up the slack if GM goes down.

I also have been amazingly disappointed in the quality of US cars and am tempted to let them bite the dust.

But to their credit, they have outrageously high health care and pension costs to deal with that other car manufacturers do not. Why should UAW have so much better benefits for its workers than those enjoyed in any other US industry? I think that Ford and GM CEOs are still stuck in the dark ages in terms of their attitudes, but they would also have a lot more room to innovate and take chances if they didn't have over $1000 per car to pay health care costs of their workers.

If they do die, their leadership and their workers have to share the blame. Toyota will be happy to move to Detroit and re-hire those workers for a normal salary and benefits. Best thing we could do is to have a rational health care system in this country.