If you follow me on Twitter, you may have caught yesterday’s
commentary on the stupefying actions and announcements of the Obama administration. Both President Obama and Governor Granholm were on television, hailing the news of GM's government-aided bankruptcy as inevitable, necessary, and ripe with opportunity.
Their tones were alternately somber and hopeful. Placating both sides of the political fence was their chief goal. The President said, "We are reluctant shareholders…What I have no interest in doing is running GM. They, not the government, will call the shots. The federal government will refrain from exercising its rights..."
Forgive me if I find those lines barely believable. There is a difference between having no coherent economic policy and not interfering. Just because Obama
bumbled along in February, uncertain about whether he wanted an auto task force or auto czar (clearly a noble effort to completely stay out of the auto industry), isn't a display of reluctance to run the industry. It is a display of cluelessness.
If the Obama administration has "no interest" in running GM, I’m happy to send them a memo to the effect that the situation is 100% avoidable.
In weak support of the plans, both Obama and Granholm emphasized that the takeover will be temporary. Okay, I'll believe it will end one day. When? Who knows. Will it be complete, or will this reluctant shareholder hang on for a while? Of course, no one has an ever-important exit strategy. But no matter, when Barack Obama has no exit strategy, it's a display of prudence. When George Bush had no exit strategy it was a display of stupidity, cronyism, and war-mongering. Right? I'm just checking.
The song and dance about how "only the government" can effect this large-scale bankruptcy is entirely true, however, there is no mention of how unnecessary it is! All government involvement does is make the bankruptcy much less painful, and builds in the moral hazard for other companies to follow suit. Some of you will foam at the mouth because I just said moral hazard. You will call me names and ask if I've been "drinking the libertarian kool-aid." You will "get all up in my shit" as one idiotic commenter's bio threatened recently, and instead of providing any kind of substantive refutation of the idea, you will attempt to use my passion and unapologetic ideological bias to discredit me. Good luck with that.
If anyone bothers to review the history of the auto industry in America, they will realize that this enormous government-aided failure has been mounting since the 60’s and 70's when both U.S. auto industry subsidy, environmental and safety regulation increased significantly, and the hand-in-hand frolicking of the Big 3 and the government was solidified. Or in the 80's when Japanese auto-makers were asked nicely to not send so many cars here. Make no mistake - this failure is not a current event with its roots in the October 2009 economic meltdown or one political party. It is a long, drawn-out history of economic fascism whose day should have come. But for some bizarre reason the American people continue to support this lunacy!
Furthermore, the largest reason for the government-aided bankruptcy is not GM's viability, which may have been entirely possible if they did their own bankruptcy proceedings. The biggest reason for intervention is to protect political powers and interests, in particular union jobs and benefits, and to ensure a subsidized auto industry for years to come.
Let's make it clear, as defacto Auto Czar Steve Rattner said, "In a sense (GM) has 300 million shareholders which are the American people..." He's right. I hope you are all enjoying your new investment.
