The CEOs of General Motors, Ford and Chrysler, which are seeking a combined $34 billion in loans and credit lines to make it through the financial storm, are again getting grilled in front of Congress.
Call it a bailout. Call it a bridge loan. Either way, a lot of Americans don't want to help the automakers out.
Big Three on the grill
A CNN/Opinion Research Corp. survey on Monday and Tuesday found that 61 percent of respondents are against the loans, while 36 percent support them. Moreover, 53 percent said they don't believe that aiding the automakers would help the broader economy.
There was little regional variation in the poll. Opposition in the West was highest, with 67 percent against the loans. Even in the Midwest, where many auto jobs are located, respondents were 53 percent opposed.
The opposition also crossed the political spectrum. Seventy percent of Republicans are were opposed, followed by 62 percent of independents and 55 percent of Democrats.
Here at Dollars & Sense, we don't put all that much stock in the predictive power of polls. We have a weird habit of following futures prediction markets such as Intrade.
But even there, things look politically problematic for the automakers.
At midday, the Intrade prediction market has the chances of Congress approving more than $20 billion in aid to automakers this month pegged at 33.9 percent - basically a one in three chance.
The polls and prediction markets are reflections of deep-rooted skepticism of the nation's Big Three automakers and the United Auto Workers. We get that.
What we continue to marvel at, though, is how much this country's knickers are in a twist over $34 billion in aid to a major manufacturing industry that directly and indirectly employs millions of Americans.
By way of context, the feds already have committed to more than $7 trillion in direct bailouts and various other contingent obligations to pull the economy out of recession. Moreover, much of that money is going toward a financial industry that was the great enabler of this economic calamity. And Wall Street's pinstriped masters of the universe didn't go through the kind of grilling the auto execs are getting.
Now, the Federal Reserve and the Treasury Department are even talking about flooding the mortgage security market with money, pushing mortgage rates so low we'll be almost compelled to refinance our houses. And we aren't even driving our cars to Washington D.C. to ask for the help.
Bottom line: The cost of the Big Three bailout is little more than a rounding error in the great scheme of things. The automakers and their workers face massive restructuring even if they get the federal aid. And yet the general public seems almost determined to see them fail and tumble into bankruptcy court.
The economic reverberations of Big Three bankruptcies will be felt by far more than just the families of about 7,000 workers at Kansas City's two big auto plants.
What gives?
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