The business media are still reporting on it as a "bailout" or "restructuring plan," a curious choice in language.
The amount of money that appears to be passing in Washington to "save" the Big Three (another favorite term) is a small fraction of the original pile of cash sought, itself insufficient. The reduced amount is hardly enough to keep
and, to a far lesser extent,
stumbling along for more than a few months into 2009.
As for the chance that $15 billion shared a few ways can play a needed role in restructuring the three companies? Well, if you believe that can happen, The Business Press Maven has a car that runs on a wing and a prayer to sell you.
Yet there the business media go again, still referring to it as a "bailout" or "restructuring plan." The $15 billion is well under half of the $34 billion the Big Three said they absolutely needed just a few fortnights ago and is only a tiny fraction of what most feel the companies actually need.
Savvy investor, don't get lulled into assuming that the Big Three are getting what they desperately need. Washington is playing a classic game of doing just enough to appear to be active. In terms of a "bailout" or "rescue," this is pretend play. And the business media are falling into the common trap of falling in love with certain words and phrases and continuing to use them, even as new facts make them outdated, irrelevant and potentially misleading.
, this week's deal, which everyone is only assuming will pass legislative muster (it hasn't yet), was the product of a "breakthrough" in negotiations.
"Breakdown" might be a more apt choice in terms.
called the potential doling-out of $15 billion a "bailout" in its headline and a "rescue" in its lead. But as a rescue, it's akin to standing at a window of a burning 10-story building and seeing that the government has sent an old-fashioned bucket brigade to stop the flames.
The Wall Street Journal
was of two minds about it. It went big in its headline, a military metaphor -- "
" -- but by only the third sentence, it had downgraded the situation to mere sports-metaphor status. This one was appropriate, making clear that if this amount passes, it only has potential as a start, a drop in the bucket: "The bill would provide short-term funds, expected to total about $15 billion, and would kick off discussions about longer-term taxpayer financing."
In an article called "
got busy playing stenographer to government officials, talking about how this plan can work.
Of course, according to
, for the plan to work, GM's health care liabilities have to be controlled. And that, my friends, is one of the most intractable problems the automakers face.
An insufficient amount of money later, the Big Three will be right about where they started. Don't fall for easy hope or language that does not appropriately reflect reduced numbers.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page. For his "Business Press Maven� column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers. Fuchs appreciates your feedback;
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