Detroit’s pleas for a bailout sound an awful lot like blackmail to Bloomberg’s Mark Gilbert. Let GM fail, CEO Rick Wagoner told Congress, and the “level of economic devastation would far exceed” what Detroit is asking for. In other words, give us what we want, or the economy gets it. “Even Somali oil-tanker pirates have so far stopped short of trying to pilfer $25 billion from their victims,” Gilbert writes.
The Big Three’s troubles have “nothing to do with the credit crunch,” Gilbert argues, “and everything to do with years of mismanagement, shoddy products, and bad choices.” GM and Ford have carried junk credit ratings since May 2005, and current bondholders are facing a more than 80% loss. So Wagoner shouldn’t be extorting anyone. “He really should be typing up his own resignation letter.”