Under the system formerly known as Capitalism, companies were allowed to go under when they failed to meet the needs of the marketplace. When GM and the other American automakers embarked upon the road of producing inferior products while allowing the powerful and politically connected unions to break their backs these companies should have been shed like so many dead cells.An example of Capitalism I use to explain to my children is the humble granola bar factory. If a granola bar factory can produce a better tasting product for cheaper than their rival then why would anyone have use for an overpriced granola bar tasting of sawdust? Such a factory would surely shut down in a free market. Decades of mismanagement has lead GM and the other automakers down this road. The axiom of capitalism is "let the market decide". By propping up the American car makers who have squandered their market share, we encourage irresponsible corporate behavior. American car manufacturers have lost to their (largely Japanese and Korean) counterparts. The market has spoken. Instead of investing in quality products that the market wants, American automakers continued to crank out inferior inventory that is not moving.
The Obama administration has propped up General Motors and is glad to do so. Who else could pull off ousting the president of GM all the while blustering that the US government has "no interest in running GM"? Obama and his thugs could not wait to get their hands on GM and has graciously announced that the federal government is backing the warranties of GM products. This is fantastic. We are going to use tax dollars to guarantee the pieces of shit that the failed American automakers have produced in their dying years. Anyone else feel as if this is perhaps not the smartest investment? Ostensibly this is to give consumers confidence in GM product warranties so consumers will buy GM products. Hello? Consumers are confident about the Hondas and Toyotas they purchase. Government backing of a crappy American product with tax dollars will inspire no one.
I had some personal experience with this when my family was shopping for our first new automobile purchase four years ago. We very much wanted to buy American, and spent quite a bit of time researching the best minivan for our family. It became quickly apparent that there were no minivan products with a five-star safety rating in both front and side impact manufactured in America. Allow me to extend a personal thank you to GM for making me choose between my family's safety and our patriotism.
In the case of Chrysler, the US government has decided that a merger with Fiat is just the thing to bring around this failed automaker and has made this merger (or an alternate plan for viability) the condition for further government aid. This is the pattern of the Obama administration. The government gets more power and the taxpayer gets less of their paycheck to make it happen. In an interview with "Face the Nation", Obama expressed his administration's belief that the U.S. can have a successful auto industry. One that is going to emerge "much more lean, mean and competitive than it currently is" Does anyone else see a contrast between what is being said and what is happening? On what planet does the government who is nationalizing whole industries (i.e. banking and auto) increase competition?
In less than three months, the Obama administration has bloated the United States government's role almost beyond recognition. And the U.S. government is going to assist the automakers to become "lean and mean"? Really? Really? Bloated government agencies intervening in the manufacturing sector of our economy is going to result in a leaner and more competitive industry? How?
Already, the Obama administration has made it clear that they will use this opportunity to ensure that the automakers produce the cars that the government (not the market) wants them to produce while eliminating profitable automotive products that are not in line with the leftist agenda. Eleven of the twenty most profitable products GM sells are the "pickups and SUVs" which GM has publicly apologized for producing. The two best selling vehicles in the U.S. are the Ford F-Series and the Chevy Silverado.
Our federal lawmakers want to subsidize the Chevy Volt (ten years too late to market) with a $7500 tax rebate. To be fair, the government was handing out tax breaks for SUVs not too long ago, but the government has no business regulating the free market. Government has proven itself competent at waste, fraud and mismanagement of funds.
A significant portion of the blame for the mortgage meltdown was a direct result of the U.S. government telling the banks to loan money to unqualified applicants and then "guaranteeing" these crappy loans with tax dollars. As a final straw, the bankrupt automakers are now promising to make the auto payments of those individuals who lose their jobs "through no fault of their own". How are these bankrupt organizations going to make these auto payments? Ahh yes, by paying for people's new cars with tax dollars.
I am driving a 1998 compact with over one hundred thousand miles on it, but I am going to subsidize new car purchases for Americans that would otherwise be unable to purchase a new car. When their employers take advantage of the economic downturn to shed the "dead cells" from their workforce, these incompetent consumers will reach into my pocket to pay for their new cars that they never should have purchased. By preventing the free market from functioning the way it should, I can proudly subsidize their family's meals, transportation and housing all on the federal teat.
American automakers should go the way of American television manufacturers, American buggy whip manufacturers and the newspaper. But thanks for the apology.
Posts
