‘Twas the night before bail-outs, and all through the nation

Not a business was stirring, not large corporations

Their requests had been sent to Congress with care

In hopes that Pelosi, or Reid, would give them a share

The CEO's had their hopes set on the Fed

And visions of bonuses danced in their heads

I was at home, full of hope and wonder

At the thought of big companies not going under.

Then out on the street there arose such a clatter,

I looked out the window to see what was the matter.

On the street was a hay wagon, making its way

Not the usual wagon, filled with bales of hay.

No, this one, (and I know this sounds funny),

Was filled instead with bales full of money.

With a very old driver, so morose and deadpan,

That I knew in a flash it was Alan Greenspan

There was a small note, stuck to each cash bale

With the name of a company too big to fail.

His wagon was drawn by eight sleek mega-bucks

And he shouted their names as he whipped their buttocks

“Now Paulson, Bernanke, Now Rubin and Volcker

On Krugman, On Samuelson, Kudlow and Cramer,

To the next company's holiday retreat!

So I can deposit a bale at the revelers' feet"

And so the wagon continued on,

Until the last bail-out bales were gone.

Greenspan then to his team gave a whistle,

And away they all flew like the down of a thistle.

And as they flew way up into the sky,

Alan cried, “I must see Ayn Rand one more time ‘fore I die.”

And I heard him exclaim as they flew into the night

"Happy bail-outs to all, and to none, oversight!"

O Bailout Tree, O Bailout Tree!
Those Wall Street thieves are vermin!
O Bailout Tree, O Bailout Tree!
They should all be thrown into the trash bin!

Not only is there subprime slime,
In Detroit they think its Miller time.
O Bailout Tree, O Bailout Tree!
Capitalist thieves playing tin violins!

O AIG, O AIG,
The mother of all bailout sieves!
O AIG, O AIG,
Its good to be a systemic titanic!

And every time the Bailout tree,
Brings to us all more gloom than glee.
O Bailout Tree, O Bailout Tree,
Much management malfeasance doth thou bring to me!

O Bailout Tree, O Bailout Tree,
Moral hazard's candle shines out brightly!
O Bailout Tree, Those Bailout Thieves,
Their motto is "Why not me?"!

The dough we've blown is a fiscal fright,
The dough that's thrown without oversight.
O Bailout Tree, O Bailout Tree,
You're a black hole yet undetermined!

Each of these industries built their labor relationships on a social compact of the 40's and 50's that was based heavily on the paradigm that people would go to work for "the Company" for their career. They would dedicate themselves to one employer, and then be rewarded through retirement. Each of these major industries settled into a oligopoly, with a few very large players. Barriers to entry were high based on the fixed costs of creating capacity in each industry. They all operated in a relatively closed market of the US consumer or other US industrial customers.

Then, one by one, new technologies or new international producers created competition for these industries. For Steel, it was the advent of the mini-mills with a new technology combined with the import of cars that included steel molded by someone in another country. For Airlines, it was a combination of deregulation and aircraft leasing, which dramatically lowered the cost of entry into the industry. For Rail, the development of the interstate highway system spawned over-the-road trucking that delivered in a fraction of the time required by rail. For Manufacturing, the same product could be built and shipped across an ocean for less money with a labor pool that did not have a pension benefit combined with a relative lack of environmental regulation.

Each of these industries either folded up or completely restructured. A major portion of the restructuring of the balance sheet includes unloading the retirement plans onto the Pension Benefit Guarantee Corporation. The social compact upon which the entire paradigm was built is no longer relavant to today's workforce.

The Federal Government, interestingly, actually figured this one out a long time ago. By creating portable 401(K) accounts, individuals could establish their own retirement plan and bring it along from employer to employer. Not to say this has worked out particularly well for everyone (re: Enron), but the fundamentals are appropriate. The Federal Government also shifted to this model for Federal employees in 1983 based on legislation written years earlier.

At the same time, life expectancy and consumer demand for health services have skyrocketed beyond any and all expectations of the actuaries who defined the future costs of those pension plans.

And so, we have companies and unions who have not made the changes required to operate in the current labor market. Either the big three re-write their finances as the rest of these industries have done or they will fail. The question really is, do we, as a country, want to fund their operations for a period of time while we require them to clean up their balance sheets and get their labor and pension costs in line with today's paradigm? Or, do we want to absorb the costs of unemployment, PBGC failure, and lost economic activity?

I'm not convinced the management teams of the UAW are prepared to accept that their model is about to pass the way of the dinosaur. They are the last hold-outs, and it's time they accept the fundamental and structural changes that have impacted every American industry. It will be interesting to see if the Democrats on Capitol Hill are prepared to take that step as well.

there is no "Plan B" to save the company because the company is slated to run out of cash in a month -- thanks to the massive rise in gas prices in the spring followed by the financial market mess, sales are disasterously low that GM is running through its cash reserves far more quickly than it could have been "reasonably" expected to -- in other words, Plan "B" doesn't exist because there is insufficient time to implement one.

GM is on the edge of extinction because of forces beyond its control -- and is far more deserving of a government bailout that Paulson's golfing buddies at Goldman Sachs, Morgan Stanley, etc....