New Fox News Op-ed: Obama’s Car Cash Plan

My new piece up at Fox News starts this way:

Would you lend $1.66 million dollars on a house that was worth $100,000? You wouldn’t even take the idea seriously. Bankers would laugh at someone asking for such a loan, and they should.

To make the example even more ridiculous, suppose that the home owner had a negative income – a negative income of $2.3 million last year. That the home owner is expected to loose a lot more money over the next couple of years, and that even if things work perfectly, he might simply stop losing money after 2011. That he lived in a bad neighborhood where almost all his neighbors were in similar in shape.

Even if you had already lent $1.3 million, you would run away from this borrower and simply chalk up the $1.3 million to some temporary insanity. . . . .

Interestingly, even Sweden's government is rejecting bailout money for Saab.

General Motors Corp's (GM.N) European brands are near collapse, with Germany's Opel in need of more state funding and the Swedish government rejecting Saab's plea for state aid until its business plan was sound.