But one reason Amtrak runs on red ink is that legislators treat it as their toy train set, preventing it from cutting egregiously unprofitable routes. Will Congress passively accept auto plant-closing decisions? Rattner says Washington's demure vow is: "No plant decisions, no dealer decisions, no color-of-the-car decisions." He is one-third right. Last week, under the headline "Senators Blast Automakers Over Dealer Closings," The Washington Post reported, "Because the federal government is slated to own most of General Motors and 8 percent of Chrysler, some of the senators said they have a responsibility, as major shareholders do, to review company decisions."
The pressure to politicize the economy is spreading. John Sweeney, head of the AFL-CIO, and Gerald McEntee, head of the American Federation of State, County and Municipal Employees -- which is government organized as an interest group to lobby itself -- have demanded the resignation of two directors of Citigroup. Their premise is that businesses receiving direct government subventions should conform to the wishes of the president's allies.
GM is adopting new ways to lose money: Responsive to its UAW masters, GM is moving from China to America the production of some components of one Chevrolet model. Says UAW President Ron Gettelfinger, "It should be built here if it's going to be sold here." That principle, now successfully asserted, means economic autarky -- the end of international trade, and of prosperity.
The government's $50 billion -- so far -- acquisition of the shadow of GM will injure, with unfair financial advantages, the surprisingly healthy U.S. auto company, Ford. Of course, the government does not intend that injury, any more than it intended to cause protests in Mexico over the high price of corn tortillas, a result of Washington's mandate that Americans burn corn (ethanol) in their cars.
Washington's "rescue" of GM began because GM is "too big to fail," and bankruptcy is (well, was) "unthinkable." Big? GM's market capitalization, $375.8 million on Wednesday, is about the size of California Pizza Kitchen's ($340 million) -- is it too big to fail? -- and one-eleventh that of Harley-Davidson ($4.3 billion). Fail? If GM has not already failed, New Coke was a success.
The administration is determined to prop up GM as a jobs program for the UAW and Midwestern states rich in electoral votes. This frenzy will intensify as the administration's decisions deepen the debacle.
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