Its All about the Cost Benefit Analysis...It always Is

In business school one of the main skill sets that is taught is the process of developing a righteous cost benefit analysis for almost any eventuality. Be it a lease or purchase of a fleet of trucks or a copy machine that will reside in the new branch office....we always need to know if we could get a better deal??? It really is exciting stuff, and this is the stuff of business that is at the core. As a country we have an analysis we are engaged in right now, what is the cost benefit of saving the Big Three Automakers?

In this case there are plenty of unknowns, and we really don't like those in the world of cost benefit. Will the amount requested be enough to save these companies? Will they ask for more money ....soon? Do the Big Three deserve to be saved? Is it unfair to all those auto companies that have worked hard to survive ....successfully in this difficult auto market? Many more questions exist and most have some validity....this idea of a bailout is very Unpretty.

Even in my small insurance business there are decisions that just aren't any fun, complexity is everywhere. If you don't believe it just try to decide which clerk to layoff or which computer to replace ....there are always two sides to every story. And, with all due respect to my accounting professors, not everything comes down to the apparent result of the analysis of cost benefit. That's the rub....that's why those that get the their name on the door make the big bucks. Even though saving the Big Three may cost more than it initially benefits our country it needs to happen.

Cost....we will get the money back. And, the true cost of Not doing this deal is not the 50 Billion. Its much more that 50 Billion. Benefit... just think people, families with mortgages, with kids, with groceries to buy and then think about what happens to all of those people??? Literally millions of people will be adversely impacted by such an event as the liquidation of these companies. Companies , would that it was just three companies. There are so many that depend on this auto production system; parts makers, trucking companies, railroad companies, and they would all be DONE should this bailout not happen. There are more people impacted by this possible default that don't work for the Big Three than do work for them.

One of the difficulties we have with this set of circumstances is the current leadership of our country. The guy with his name on the door is just about to leave work and go home for a much needed rest. And, his conservative view of this financial world is as antiquated as Herbert Hoover's was when he sat and watched his economic situation deteriorate ....and did very little. Or, what he did was not enough. Throughout this crisis , since September, Dubyas response has been one of late for work. He has supported efforts to quiet the crisis along the way but its always ....at the last minute and reactive...not proactive. I would say that active discussion concerning this bailout has been going on for the last three weeks. But, just yesterday Dubya has apparently come on board to help us out. but, only as a political Jab at the other party....crass and small ,his remarks; from the AP wire....

The Bush administration sharply criticized the Democrats for departing Washington for a congressional recess without acting on a rescue for the car makers.
"How could they leave town when the auto companies were just here (this) week saying some of them were on the verge of running out of cash?" Commerce Secretary Carlos Gutierrez said in an interview. "I think it's a very irresponsible attitude toward a very serious matter."
White House press secretary Dana Perino said it was "appalling that Congress decided to leave town without addressing a problem that they themselves said needed to be addressed."
And President George W. Bush himself went on the offensive — although with more reserved language — to press the point that leaders failed to grab onto a bipartisan proposal.
"Unfortunately, the leadership in Congress adjourned without even allowing this measure to come up for a vote," Bush said in his Saturday radio address, taped Friday and released early by the White House. "My position is clear: If the automakers are willing to make the hard decisions needed to become viable, they should be able to receive the funds Congress already allotted to them for other purposes."

Really , he apparently has done his cost benefit analysis and decided that saving the Country is Important. But, only if he can take a swing at the other party. What if he had come out strong for a bailout two Weeks ago? I'm thinking that as of January 21 we'll be better off....no doubt