A Loan Application Scenario

Three executives of the big automakers come to Washington to apply for federal loans, hats in hands. Let's call the federal loan officer Big Sam. Coming to the loan officer's table they have shown humility traveling by car instead of company jets. By arriving in cars their companies have manufactured they show thriftiness and pride in their business. Still, Sam likes to know that they have jets. In the loan business these assets are called collateral. Big Sam wisely wants to know what other assets these companies have.

"A line item list would do just fine. If your companies cannot repay your loan debt," Sam informs the big three, "your jets and other assets will have to be forfeited to us."

Big Sam is curious about the three representatives that have arrived at the loan table together. He wants to know more about their relationship. Suddenly they seem to be friends. Is this new? Big Sam recalls ads on television that used words like "out classed" and "tougher".

"Is everyone friends all a sudden?"

Big Sam, being a wise loan officer, reminds them that we are looking at loan applications on a case-by-case basis. Of the three, Big Sam appreciates the attitude of the Ford Company whose executive simply states they would like a line of credit, not necessarily a loan. Big Sam likes this positive attitude. Big Sam expresses interest in Ford's ideas and how it foresees remaining healthy and viable.

Big Sam notes that all three companies are aggressive, even bullish at times,throwing their weight around with great self-interest. Understanding the playing field, Big Sam knows that the demands of our federal loan institution must be equally aggressive.Despairingly, Sam notes that our loan institution helped establish this playing field and that over many years we have been slowly letting out enough rope to hang us all. Big Sam, nevertheless, keeps this to himself.

Unflinchingly, Big Sam reads off a list of some of the shortsighted, risky, but financially expedient accomplishments of the big three automakers. (Big Sam wants to establish the risk of loaning these companies money so that Big Sam can justify higher returns.)

"Let's see, you have killed the electric car, laid waste to public transportation and the commercial rail system, successfully fought higher fuel efficiency standards AND kept carbon dioxide from being listed as an environmental pollutant. Perhaps most impressive, since the beginning of the war in Iraq, you have successfully marketed SUVs and other vehicles with the lowest MPGs since 1950."

Big Sam chuckles at their business savvy while wagging a finger and telling the men that they have been bad trustees of our national wealth. He lowers the glasses on his nose and looks over the brim.

"Now we know you can do better for the people," he gently scolds.

Big Sam explains that in exchange for these loans we expect higher returns in public and environmental health. We expect job security and industrial cooperation to work with green industries.

"There will be new rules to follow," says Sam. "The time for making quick bucks is over. We need to make businesses that can last."

Big Sam holds out his hand for the new plans. "Let's see what you've got," he says.