Congress Should Question the Need to Nationalize GM - washingtonpost.com: "'We cannot make the survival of our auto industry dependent on an unending flow of taxpayer dollars,' [President Obama] said. 'These companies -- and this industry -- must ultimately stand on their own, not as wards of the state.'
So how did we get from there to here? Here, according to media accounts this week, is an imminent transformation of General Motors into a government-owned company, infused with upward of $50 billion in federal money. The United States will accept stock in lieu of the cash the company owes, and Washington -- that is, you, the taxpayer -- will become the owner of 70 percent of the new GM. When might the company stand on its own, to paraphrase Mr. Obama?"
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The Post points out how little relationship there is between Obama's words and his deeds in this case, and then concisely explains why nationalization of General Motors is a bad idea. If the company continues to be unattractive to private investors, which seems likely, then what? Does the federal government decide to get out? If so, when, and how? It seems to me that everybody concerned would have been better off if the company had been left to its fate in the market, whatever that was. Obama has been doing what the UAW wanted, because GM was its biggest power base. But sooner or later, unless a miracle happens, the UAW-governed employees will need to find other jobs anyway--unless GM is going to remain a government-owned car company in perpetuity.
The larger issue is that Obama is astonishingly consistent in one important respect: he says one thing, and then does another, again and again and again. He claims that something is unacceptable, and then turns right around and does it.
1 comment:
I share the fear of the mentioned Federal judge, who thinks that GM will become a financial black hole.
While this whole bailout is spun as a great bailout of a failing American company, the truth of the matter is that is is a massive payoff of the unions, who helped Obama get into office. Obama's only consistency of action (Ignore his words. They mean nothing!) is the payoff of his political friends. This is further exemplified by the retention of dealers who contributed to the Obama campaign but closing dealerships whose owners contributed to Republicans.
In short, it isn't about saving GM, it is about political payoff to the unions.
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