For those of you who carefully have avoided piddling away your hard-earned dollars on a General Motors vehicle, resistance is futile. You're a majority "investor" now. Rejoice.
Taxpayers, our president has decreed, are impelled to preserve a prehistoric, poorly run, unprofitable private corporation. Now the only question becomes: What does all this sacrifice mean?
Will GM be run as profitably and efficiently as Amtrak? Will GM be paid not to produce, like the agricultural sector? Will it feed into an economic bubble like Fannie Mae and Freddie Mac? Will it boast the negligible oversight and waste of the so-called "stimulus" package? Will it feature the fiscal irresponsibility of Social Security? Or will we see the runaway costs of Medicaid?
So many options.
President Barack Obama assures us that he has "no interest" in "running GM," going on to say, "When a difficult decision has to be made on matters like where to open a new plant or what type of new car to make, the new GM, not the United States government, will make that decision."
Judging from contemporary history, one would not be out of line if one were somewhat suspicious. Up to this point, government has taken to micromanaging GM and the entire auto industry.
You don't coronate a "car czar" for kicks.
If Obama has no interest in running GM or the car industry, why did he support onerous and expensive social engineering via fuel standards at the time when the auto industry and consumers were suffering most?If Obama has no interest in running GM, why did his administration bankroll and nationalize the company while perpetuating the myth that it could save it, after nearly every expert on the planet understood its fate was bankruptcy?
If the administration has no interest in making "difficult decisions," why did it push out GM's CEO, Rick Wagoner, and appoint yes man Fritz Henderson (who conveniently abandoned GM's long-standing opposition to economically destructive fuel-efficiency regulations)?
If Obama has no interest in running GM, why, as The Wall Street Journal pointed out, did the administration give assurance to the city of Detroit that GM would not move its headquarters?
And why did the Treasury Department strong-arm bondholders, wipe out all shareholders and magically erase almost all of the $172 billion of debt rather than allow these issues to be worked out impartially during a traditional bankruptcy?
If it's not about having the Obama administration run things, why did the president hand the United Auto Workers, a rock-ribbed political supporter, a sweetheart ownership deal for pennies on the dollar?
All of these shenanigans were justified to the public by the irrationally sentimental and flawed idea that taxpayers had a responsibility to save GM and that their saving it could shield the economy from job losses.
So in other words, we are exactly where we would have been had the government allowed the company to go bankrupt months ago (well, the same place sans state ownership). And for those who believe that affixing the word "new" in front of "GM" makes a difference, I've got a Yugo Cabrio for you to buy.
If a car made in this country is worthwhile, efficient, comfortable and safe, Americans will buy it. But the very presence of a nationalized GM undermines a truly competitive car market. Honda and Toyota, which have taken no taxpayer funding, no doubt will find it immensely problematic to compete against a company that can print money and take losses in perpetuity.
Or, I should say, we will be taking losses in perpetuity.