Posted on June 1, 2009That Queasy Feeling
When President Obama fired GM’s CEO Rick Waggoner a couple of months ago, I didn’t think he would take the job himself.
But that is exactly what he did when he proceeded with the plan to have the government take-over the failing auto giant.
Bankruptcy is bad. A government take-over is worse.
Arguably, government is what put the American car companies in the ditch in the first place.
CAFÉ standards, favorable union rules, high taxes, state laws that make impossible for the Big Three to shed dealerships, all of these things have conspired to kill Detroit.
Of course, Detroit has done much of the damage itself. There is a reason that American automakers have been on the ropes for that last couple of decades. And there is a reason that most Americans hate the idea of bailing out Detroit. And it is the same reason. Most Americans don’t like to buy American cars.
It might be wrong. It might be unfair. It might be outdated. But many folks simply have had too many bad experiences with their old GM car. Too many lemons. Too many expensive repairs. Too little really good service.
And now we have the government stepping in to help.
As if the U.S. government has any plausible record when it comes to efficiency or effectiveness.
Everything the government touches turns to dust. The U.S. Postal service? Disaster! Amtrack? Disaster! Social Security? Ponzi scheme that will turn into a disaster eventually!
Having the government takeover GM gives me a queasy feeling.
Why does anybody in their right mind think that this is the way back to profitability for GM?
Government makes decisions that are chiefly based on political considerations. The Obama Administration, especially, will make decisions not based on market-based data, but on liberal aspirational goals, such as union rules, climate change, etc.
GM has lost billions of dollars over the last couple of years. It is a lot of money, but it absolutely pails in comparison to the fiscal mismanagement of the federal treasury.
This is not going to end well.