Bailout Watch 443: DetN's Howes: Bonusgate Highlights Anti-Detroit Bias

Yes, I’m going to open this can of worms. Detroit News columnist Daniel Howes did so this morning—although his thoughts on Bonusgate somehow didn’t make it to the paper’s homepage. Howes’ main argument: how can the Obama administration claim that they had to pay $165M worth of executive bonuses because they were legally obliged to do so—when they’re happy to force Chrysler and GM to renegotiate legal contracts with the unions and bondholders as a precondition for double dipping at the bailout buffet? And you know what? He’s right, even if he somehow forgets the seven million [taxpayer] dollars ChrCyo and The General are spending for lobbying our legislators and, by extension, commander-in-chief.

Perpetuating this double standard — one set of rules for troubled Wall Street firms with a demonstrable record of fat campaign contributions and another for automakers with union labor and little clout in Washington — is arbitrary, indefensible and deserves the backlash buffeting Congress and the Obama administration.

And then, of course, Howes goes too far.

The issue, here in Detroit, isn’t whether GM’s business model is broken and in desperate need of repair, or that its debt load is unsustainable. All true. It’s that the federal government appears complicit in a campaign to dismantle a cornerstone of American manufacturing even as it allows taxpayer dollars to be rewarded to those at the epicenter of the global financial meltdown.

In this case, just because Howes is paranoid doesn’t mean the feds are out to get him (or his pals). Quite the contrary. They seem to be falling all over themselves to keep the zombie automakers out of bankruptcy court. Still, it’s hard to tell where Danny’s going with this one.

Union deals can be trashed if political critics demand it in exchange for federal loans. Executive employment contracts can be deemed worthless, as AIG’s are likely to be by week’s end. Contracts between a lender and a borrower can be reworked by a bankruptcy judge, weakening a fundamental economic relationship and undermining the recovery of the flat lining mortgage market.

Is this what we want?

So Howes doesn’t want Washington OR a bankruptcy judge to screw around with Chrysler and GM. So . . . what? We just write them a check and piss off? Surely Howes sees that the automakers’ management is broken, and that C11 is the only fair, equitable and realistic way for them to survive as anything other than a government-sponsored enterprise (i.e., not a business per se). Doesn’t he?