Nice argument for Big Three bailouts, but not good enough

Why I worry about a bailout's use, at bottom

Over at Scholars and Rogues, Lex gives a good shot at arguing for some sort of government help for each of the Big Three, treated separately.

Several good points he makes:

1. Watch GMAC. If it gets its hands on TARP funds, GM may indeed walk away from carmaking. So, too, may Chrysler parent Cerberus, which also holds a significant chunk of GMAC.

That said, if Ford could get the other two of the Big Three to do a gradual, rather than sudden, walk-away so as to allow readjustments in the supply chain, isn't that to it's benefit? And, if ppl really want gas-guzzling carbon emitters, Hummer and Jeep could merge and produce something, which the government could subject to a massive carbon tax.

2. Lex is right that a carbon tax is a good idea. BUT, not as a replacement for CAFE standards; instead, make it an add-on.

3. He's right that the UAW is not simon-pure, though it gets too light a slap on the wrist.

4. He's also right that the Japanese Big Three have built ever-more-guzzling vehicles of their own. From worst to best, the offenders are Toyota, Nissan and Honda.

That said, there's things he misses or gets wrong.

1. He misses that this isn't just an American issue. In Europe, the biggies (Daimler/BMW/Opel/VW) are talking about whacking 100K jobs there. We have a glut of vehicles in the Western market.

2. GM’s had hybrids for YEARS already. Through its Allison division, it’s one of the world’s largest makers of hybrid buses. Ford had a diesel-hybrid it unveiled at auto shows two years ago. And, back to GM, which could have Volt on the market already if it had settled for starting with NiMH batteries and a non-plugin version, then worked the kinks out over time.

3. Lex claims tougher safety standards have contributed to car weight. That's pretty much not true. Most of that has been carmakers interacting with the market. Safety features have had very little to do with it.

4. Back to the Big Three, though. Why do they, GM in particular, STILL spend R&D on hydrogen cars when they KNOW that’s not the wave of the near, or medium future?

And, that’s why I DON’T favor a bailout. “Green” R&D could mean GM pounds more money down the rathole of hydrogen research.