Tuesday, March 31, 2009

Government Motors?

With our President Barack Obama as car czar in chief will we end up with a useless Yugo that inspires endless jokes, or a green Zil so expensive only government bigshots can afford to drive one? And we're going to throw more precious taxpayer good money after bad so that an Italian car company FIAT Fix It Again Tony can take over Chrysler--having just taken over Yugo?!!!:
Two car workers, Radoslav Simovic and Zarko Niciforovic, grew sentimental as they helped assemble the very last Yugo to leave the production line.

"For us it's hard to part with the Yugo, but I hope that we will start producing some nicer and more comfortable cars. We all have our hopes, but we will have to see what emerges as reality," Simovic said. [snip]

...its faults were reputed to be many. Owners complained of premature engine failure, an unreliable gear box, and doors coming loose, among other things.
In my youthful folly, I bought a FIAT for my first car--big mistake. It huffed and puffed climbing Wisconsin's tame hills and the engine would overheat so that to relieve that you'd have to turn on the heat instead of the AC in the middle of summer--and yes, a door came open suddenly on Green Bay Road. Fortunately it was pre-kids and my friend was wearing a seat belt

Government Motors? A very bad idea, a throwback to an era where the cars they make are their choice, not yours, but you will still pay for it one way or another. 

Ramirez cartoon.

More: Larry Kudlow on the government's power grab and its apparent relish for its uber-regulator role whether it makes sense or not:
As for Detroit, the carmakers should have been in bankruptcy months ago. And it is a bankruptcy court that should have fired GM's Wagoner and his board. Along with some serious pain for bondholders, bankruptcy would have broken the high-cost labor contracts with the UAW as well as carmaker contracts with dealers across the country. That's what bankruptcy courts are for. They're part of the free-market capitalist system.

Former SEC chair Richard Breeden is arguing against a systemic uber-regulator for banks, and in favor of special financial bankruptcy courts. Once again, the story is court-ordered restructuring, not government control by political bureaucrats who like their power so much they want to keep running the various companies in question.

And why isn't Obama's special auto task force ordering a replacement for Ron Gettelfinger, the UAW's president? Weren't their oversized pay and benefit packages a big part of the problem? Well, that's never gonna happen. The election power of the union is too strong. But this does reveal the political nature of these government bailout operations.
Yes, and at our expense. Politico:
But Obama’s move, particularly his dramatic ultimatum to Detroit, puts government in a role better performed by the private sector.

Said David Boaz of the Cato Institute in The Arena: “Rick Wagoner may be a bad CEO, or he may be a victim of difficult conditions facing the legacy auto industry. In either case, board members and investors are the right people to make that decision. I don’t know who should run GM, and neither does President Obama.”

Behind the scenes, Obama seems increasingly comfortable with his assertive role, according to Democratic officials. This mentality pervades the entire White House team — and it was on full display at Friday’s meeting with big bank CEOs. A source familiar with the meeting said that when one of them questioned the price buyers would be able to get for the bad loans known as toxic assets, White House chief of staff Rahm Emanuel jumped in to say: “Let’s do the deal right here.

Obama, who entered the White House with notably little business experience, is trying to position himself as a common-sense centrist when it comes to bailouts, aides said.
Laughable, given his actions.

More: WSJ, "Barack Obama's Industrial Policy Is Now Too Big to Fail. And Bloomberg, Financial Rescue Approaches GDP as U.S. Pledges $12.8 Trillion. 

We can't afford any more big government spending. We have got to stop this next budget disaster now.

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