A Modest Proposal for Making GM a Burden on Middle-Class Children

LA Times auto critic Dan Neil earlier this week suggested that the federal government “nationalize” General Motors. I’m really glad that Mr. Neil signalled the satiric nature of his notion by introducing it as his “modest proposal“. It’s not the funniest piece I’ve ever read, but for an auto critic delving into economic spoof, it’s okay.

At least, it contains one laugh-out-loud line: “The government can afford long-term planning.” This would be the government that so swiftly forced the Bush/Paulson bail-out through on the grounds that they didn’t have time to think out a better plan.

And like most good satire, it hints at recognizable truth: “[T]he measures being bruited about as preconditions for a bailout — firing GM’s top management; forcing a bankruptcy-like renegotiation of contracts with the UAW, suppliers and dealers (it has too many); and creating a czar of product development to force the building of green cars — are nationalization in all but name.”

Actually, it’s the bail-out itself, not any preconditions–such as the insulting “concessions” offerred yesterday by the United Auto Whiners–that constitutes “nationalization in all but name”.

And that, of course, boils down to what’s wrong with the Big-Three bail-out. Saddling the taxpayers, through the mediator of an irresponsible, unaccountable, short-sighted, generally inept federal government, with ill-managed companies is hazardous–morally and economically.

When the CEOs of three of America’s biggest companies roll into Washington expecting to cannibalize the earnings of American taxpayers, including children yet unborn, entitlement-mentality reliance on Big Brother has itself reached the point of self-parody. And it would be laughable, if it weren’t so close to Mr. Neil’s source essay.

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1 thought on “A Modest Proposal for Making GM a Burden on Middle-Class Children

  1. Leslie,
    I agree that the bailout is an absolutely awful idea–it should not happen. But to lay blame for the plight of the Big Three only on the Big Three ignores two major realities.

    One–government has influenced much of the institutional problems at the Big Three–interrupting and intervening in the workings of the free market through over-regulation.

    Two–the financial mess we are in currently is directly attributable to government ineptitude (Fannie, Freddie, the CRA, pushing sub-prime lending, etc). The after effects of this (specifically less credit and much lower consumer spending) cause much pain to an industry which is volume sensitive and needs a strong credit market (since autos are the 2nd largest purchase made by consumers–first largest if one is not a homeowner).

    That said, there is a solution–let the market work! If that means bankruptcy, so be it. That would actually be more beneficial for the companies as it would put all contracts (including some of the horrific union contracts) back on the table.

    I do find it funny, however, that many choose to draw the line here at the auto industry but did not/are not for the financial industry, the housing industry, the States and cities, the construction industry, etc., etc. My favorite question now is: Why draw the line here? Most answers can ususually be used against their support for prior bailouts.

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