Detroit can't sell cars. Perhaps it is because they are too expensive. Perhaps buyers can't get credit. Or, maybe autos made in Japan and Germany are simply better-built.

No matter. The Big Three are now looking at a program to stimulate car sales sponsored by the US government.

According to The Wall Street Journal, "On Monday, Sen. Charles Schumer (D., N.Y.) plans to send a letter urging the Federal Reserve to make financing available for the auto companies' lending arms, which would allow them to offer more auto loans."

Will that help? If the loans are attractive enough, certainly. They may have to be better than zero percent financing. The car companies have tried that. Perhaps the government can make the first year of payments for car buyers and leave the consumers to pay the last two years. That would be as good as 33% off the purchase price.

Why stop there? Home builders want a bailout. The government could make a 20% down payment for people who would like to buy a new house. That would leave a mortgage on 80% of the home. The government could make the balance of the mortgage interest free.

Every industry in America is going to make a grab at bailout funds. The Treasury will have to hire thousands of analysts just to sift through them

Douglas A. McIntyre is an editor at 24/7 Wall St.

New York Sen. Charles Schumer must be feeling pretty giddy these days. As head of the Democratic Senatorial Campaign Committee, the New York Democrat may be on the verge of delivering a filibuster-proof majority for his party with potential pick-ups in such formerly reliably red states as Virginia, Kentucky and Mississippi. But now he's gone even further predicting that his party's presidential candidate Barack Obama would capture the White House with more than 300 electoral college votes. That's huge.

That's 30 more than Obama needs to win. By contrast, George W. Bush beat John Kerry in 2004 in the electoral college by 284 to 251. I am not sure whether any president has won the White House by such a large margin. But even by the standards of political hyperbole, this is a pretty grandiose claim. What's more amazing is that Schumer's Republican counterpart, John Ensign of Nevada, more or less agreed with him.

Speaking at the same National Press Club event as Schumer, Ensign said, "I don't think that there's any question that it's a tough election atmosphere for Republicans." The Republican went on to say that it's "possible" that the Democrats would win 60 seats. Faint praise for Republican candidate John McCain indeed.

Remarks like that probably send shivers up the spines of economic conservatives. The Wall Street Journal has warned about the dangers of the Democrats gaining control over the White House and the legislative branch. I don't think the world is coming to an end but I agree that concentrating too much power in the hands of one party may not be a good thing.

The growing power of the Democrats will play an important role in shaping major legislation such as the second economic stimulus package and any assistance to homeowners hurt by the housing crisis. We are entering uncharted and potentially dangerous waters.

Global markets are soaring on news of a plan to bailout Wall Street again -- this time by creating a government entity that will buy up all the toxic waste on Wall Street's books. Yesterday, the Dow closed up 410 points on the news and this morning, Asian and European markets are up between 4% and 9% in response to the news, according to the New York Times. So, what is this plan and why is the market so happy about it?

At this point there's nothing much to the plan. The Times reports that stocks started to climb 617 points from their low during the day when Sen. Charles Schumer (D-NY) introduced a proposal to create a new government agency that would buy up the toxic waste on banks' books. The White House's anti-bailout crowd has already spent $1.1 trillion rescuing Wall Street so far -- this includes the $800 billion Lou Dobbs mentioned on CNN Wednesday night plus the $300 billion that the Fed injected into the market yesterday, according to the Times.

There does not appear to be much clarity on some fundamental questions: What kind of toxic waste will this agency own? Will it buy the waste from around the world or will it just stick to buying the waste from U.S. banks? How much of this stuff is out there? How much will the agency buy? How much will the agency pay? How much will this cost the American taxpayers? How will the agency raise the cash to finance these purchases? How will the agency sell this toxic waste to recoup the cost to taxpayers?

MAJOR PAPERS:

• The Wall Street Journal reported that private loans under the Federal Family Education Loan, or FEEL, program have begun to give way to the federal direct loan program, as private lenders run into subsidy cuts and problems raising capital. To date about 60 colleges and universities have made the switch.
• Carl Icahn, a 6.3% Motorola Inc (NYSE: MOT) shareholder, has sued the company to get board of director documents, turning away offers of two board seats, the Wall Street Journal reported. Icahn wants information about the company's unprofitable handset business.
• Ford Motor Company (NYSE: F) is expected Wednesday to announce an agreement to sell its Jaguar and Land Rover units to India's Tata Motors Limited (NYSE: TTM) for about $2B, the Financial Times reported.

OTHER PAPERS:

• According to the Business Review, New York State Senator Charles Schumer is planning to 'reveal details' of a conversation he had with the CEO of Advanced Micro Devices Inc (NYSE: AMD) on March 21 about the company's plans to build a $3.2B computer chip plant in Saratoga County.

Earlier this week, the SEC reportedly launched an informal investigation of Countrywide Financial Corporation (NYSE: CFC)'s CEO Angelo Mozilo's stock sales, specifically the acceleration of his pre-arranged share-selling program.

Now New York Senator Charles Schumer is calling for more blood -- he wants the investigation expanded to include the company: In a statement, he said that the SEC should "expand its informal probe of suspicious stock sales by Countrywide CEO Angelo Mozilo to include the company itself, which may have taken steps to enable Mozilo's stock dumping as the subprime crisis heated up and Countrywide's stock prices plunged... Did Countrywide repeatedly adjust Mozilo's prearranged selling plans at his request, such that the intent and purpose of these plans -- the prevention of insider trading -- was undermined?"

It's a little weird for a Senator to offer advice on an SEC investigation, and it's hard to understand what exactly Schumer's point is -- other than trying to look tough on fraud and go after a company that is deservedly unpopular for its role in the subprime meltdown.

But I think the SEC probably has thing under control, and I'd be surprised if the investigation didn't expand to include the company.

Will Ben Bernanke's speech tomorrow at the Fed's syposium in Jackson Hole, Wyoming, be as important as the pundits expect? Maybe not.

There are many, many worrying signs. The commercial paper market is a mess. Jobless claims rose higher than expected. The housing market remains horrible.

H&R Block (NYSE: HRB) Chief Executive Mark Ernst said today the "mortgage origination market is in the midst of the most severe dislocation it has seen in years, maybe the most severe since the 1930s." Housing prices had their smallest gain in 10 years, according to the Office of Federal Housing Enterprise Oversight.

But this Fed chairman has a dramatically different view of his job than did his predecessor, Alan Greenspan, who regularly used interest rate cuts during financial crises, as The Wall Street Journal (subscription required) points out. Plus, Bernanke seems to hold the view that the job of the Federal Reserve ISN'T to rescue people who took stupid risks, such as the ones that lead to the subprime mortgage crisis.

It's been giddy times on Wall Street. Might this be the prelude to a big fall?

That's the take from a recent report from Senator Charles E. Schumer and Mayor Michael R. Bloomberg. The research is based on the work of the management consulting firm McKinsey, which conducted 50 extensive interviews of business leaders.

Basically, unless certain changes are made, NY may lose anywhere from 4% to 7% of its global share of the financial services market within the next five years.

It should be no surprise, since among other problems the US has too much litigation.

What's more, the new regulations of Sarbanes-Oxley (SOX) make it unfavorable for companies to go public in the US. As a result, overseas markets look more attractive.

The good news is that these are things that can be fixed. For example, it looks like the SEC is already making moves to lessen the impact of SOX.

But as usual, such issues are complex and can be crowded out by other political issues -- after all, how many Americans really know what SOX is? So it is likely to take a while for change to take place.

In the meantime, other major overseas financial centers will, of course, not wait.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.