Memo to Congress and automakers: A modest proposal

So the people's representatives and Detroit's Big Three remain locked in spirited competition for the nation's title of top cretin. All eyes are on the race this year, because there really haven't been any credible challengers to the White House's annual team since 2001.

For the moment it's pretty much neck and neck, down to the wire, with Congress perhaps a nose ahead, although one should never count out the country's automakers' astonishing ability to make precisely the wrong move at precisely the right time.

Their CEOs' latest stunt -- flying into Beggar's Central in plush corporate jets complete, I'm sure, with wet bars tended by long-tailed guys named Jeeves -- was a stunning and splendid little maneuver, wholly unanticipated by the spectating crowd of impoverished creditors.

So as I say, do not under any circumstances count them out, even if they're going up against ideological dinosaurs such as Sen. Richard Shelby, who revels in the prospect of a love-starved great power getting but another invisible hand job from Adam Smith.

But I have a question -- a question I have not heard asked and whose answer in the negative may be simple and straightforward enough; but since it hasn't been asked, I have no idea.

Here it goes, with a bit of background first:

The loan dispute, as it stands today, is over the relatively minor amount of $25 billion. And it is indeed relatively minor when one reflects on the $700 billion price tag of unrelated bailout infamy.

That money -- the bigger money -- we were told at the time of Congressional approval, would go into the financial system in the form of buying up severely troubled, mortgage-related assets. If we could just relieve the lenders' distress and eliminate each other's doubts, or so the story went, the credit dam would break soon enough and in short order all would be back on track.

As we know, however, that's not the way things played out. Instead, the Bush administration, in the even more troubled personage of one Henry Paulson, began flooding healthy banks with cash.

Christmas came early for them, and even though they weren't quite sure why in God's name Mr. Paulson was suddenly insisting they accept all his (our) largess, in no time at all they were happy to do so.

Because a curious thing happened. Turned out, there weren't really any strings attached to Paulson's rain of tens of billions of dollars descending on them. This was revised capitalism at its best: a true partnership with an exceedingly generous government offering bargain-basement rates on unneeded cash.

The banks were, of course, supposed to turn around and loan this cash, but the government wasn't fussy enough to actually insist on such reciprocal, nation-saving "generosity." Hence the healthy banks merely went shopping for less healthy competitors.

All that money originally intended to unfreeze the credit markets so that the original creditors -- the taxpayers -- could once again buy stuff, like cars, went only to the finer formation of a banking oligopoly.

Now, Congress is telling folks who make stuff, like cars, that the till is empty. What can it do? For heaven's sake it just shelled out $700 billion so it cannot in good conscience shell out another $25b unless the automakers can prove beyond all reasonable accounting doubt that the non-existent loan money will, in fact, save their sorry butts well into the twenty-first century.

But here's my question. Why can't Congress now legislatively insist that those tens of billions in happy cash so recently showered on healthy banks be turned around and loaned to domestic manufacturers in need?

Loan rates all the way around could be adjusted so that the banks are loaning at a rate superior to the ascending dividends they owe government; no additional money would need to be appropriated; Treasury would guarantee the new loans; the automakers could keep the $25b already slated for much-needed retooling; the banks make a profit by using the money for what it was supposed to be used for -- loans, not mergers and acquisitions; the automakers survive until better economic days; and everyone goes home content, fresh and ready to do business.

The seemingly logical answer -- Why not? -- to my question is probably doomed by some unalterable stipulation in the original bailout wording. If not, however, I would hope the principal objection is not that the government can't go around telling banks when, how and to whom they should loan money. We, and this economic crisis, are already way beyond that ideological obstacle.