Wednesday, December 10, 2008
Some Simple Arithmetic
THEY ACTUALLY BUILT THIS DAMN THING. I hate to interrupt all the high-finance chatter about the pros and cons of the projected Detroit bailout. I really do. But I've just performed one act of addition and one act of division (on my Microsoft onscreen calculator), and I have a question: What the hell is going on here?
Let's get right to it. Here are revenue figures for General Motors in 2007.
Ford Revenues for the same year.
And for DaimlerChrysler.
With me so far? All that adds up to $557,666,400,000. Which is 557 billion dollars.
Are you starting to get it? What percent of $557 billion is $15 billion. The answer?
What is that? How to make it real and understandable to us ordinary folk? Let's say you're a struggling entrepreneur with business problems so acute you can't survive without an immediate infusion of cash. Let's say you're a one-man business and you're presently taking in $100 a day. Would you hand over an ownership interest and some degree of management control of all your future operations for $2.60 a day? That's not a bailout. It's a pittance. It's a slap in the face. It's tip money. You could achieve the same financial effect by trading your daily Starbucks Vente for a cup of java from McDonald's. Even if your business is in immediate danger of closing its doors forever, $2.60 a day or $13 a week isn't going to save it. Even if you can get the whole $676 total right now, it's not going to save your ass. It's barely more than one week of income. It's just a bad joke.
What the hell is going on here?
It's not a bailout. It's a sellout. The CEOs of the American auto industry are in the process of delivering a huge chunk of the American economy into the hands of the federal government for the purpose of absolving themselves of all responsibility. The computation they've performed doesn't even require a calculator: "In for a penny, in for a pound." That's their arithmetic. Once the tap opens, they figure they'll be able to drink from it endlessly forever as wholly owned vassals of the state. $15 billion? Try a long-term pricetag of $15 trillion, with no end in sight. This insultingly cheap and easy betrayal of their shareholders and the American public makes Judas's 30 pieces of silver look like a princely fortune. They're pretending they can save their grossly mismanaged companies for the corporate equivalent of a cup of coffee a day.
How do you feel about that? Do you want to consider gravely the oh-so-complicated yes/no question of the Great Detroit Bailout? Or do you want to grab a pitchfork and head to Detroit and Dearborn to administer a serious ass whuppin'?
I know how I feel. But why can't anybody else in the MSM or the financial press perform two simple operations of arithmetic? I'd love it if somebody could explain that to me.