Former Chief Executive Officer of the Chrysler Corporation, in his 1984 autobiography “Iococca”.

“Loan guarantees, I soon learned, were as American as apple pie. Among those who had received them were electric companies, farmers, railroads, chemical companies, shipbuilders, small-businessmen of every description, college students, and airlines.”

“In fact, a total of $409 billion in loans and loan guarantees was outstanding when we made our $1 billion request. But nobody knew this. They all said that loan guarantees to Chrysler would set a dangerous precedent.”

“Loan guarantee” was Chrysler’s semantic response to the popularly named “bailout”. This week automakers are negotiating a new bailout, modeled after Wall Street’s TARP plan.

Maybe we should check on the TARP plan first to see how they’re doing? Brad’s review is pretty funny. I also enjoyed reading former US Secretary of Labor Robert Reich’s  views on TARP and Chapter 11:

“There’s no good reason for taxpayers to continue bailing out the Street. TARP hasn’t worked. Some $350 billion later, credit markets are still quite frozen. The only obvious beneficiaries of TARP have been the executives, creditors, and shareholders of the big Wall Street banks, who have come out better than they would have had there been no Wall Street bailout.”

Reich presents these (not shocking) conclusions while presenting a reasonable plan to help automakers survive the current economic conditions. Reich’s plan is that we make use of existing Chapter 11 protections for failing businesses. In the most basic terms, Reich proposes that the state provide $1 of public money for every $2 risked by the industry shareholders.

Catastrophic collapse of the automakers is probably not a politically viable path. Reich’s plan looks like a moderate, next-most-expedient option for rebuilding a deeply flawed industry.