Cash for Clunkers

June 12, 2009

I’m curious about how this bill is going to save the US auto industry–The Big Three that is.   After all, it is foreign owned companies that are producing the most fuel efficient cars–Honda, Toyota, etc.

Additionally, the bill does not allow people to trade in cars that are older than 25 years, cars which use the most fuel.

The fact that “efficiency” must be subsidized through the government ominously indicates that the fuel-efficiency is not a driving factor in new car purchases.  Products should not need government subsidies; the quality of a product should speak for itself.


Political Cronyism at Government Motors (GM)

June 5, 2009

Something to chew on:

The UAW  openly supported the Obama election campaign.

The United Auto Workers Union was given 17.5% of GM by the Obama administration.

When Haliburton–former employer of Dick Cheney–was awarded contracts in Iraq, liberal critics were quick to demonize him and his administration, criticizing them of political cronyism.

This is a huge political hand out!

First, the Obama administration is rewarding the UAW for its generous support by pumping BILLIONS of tax-payer dollars into GM. Will these billions be spent supporting more Democratic election campaigns?  Second, the Obama administration is rewarding the very group that helped bring GM down through its inflexibility.  When Obama says that he does not want the American auto industry to disappear, it becomes obvious that he means he doesnt want his cozy relationship and revolving-door funding scheme to disappear.

It’s time for America to wake up. By meddling in the private sector, the Democratic party is attempting to solidfy its power with tax-payer money. Get the government out of GM and put the UAW out of business!

Quick and Clean

June 4, 2009

Monday marked a monumental event in American economics.  GM went bankrupt, the US and Canadian Governments bought in in a big way, and the Obama administration indicated its strategy to revive the company and reprivatize it quickly and cleanly.

Now, if I were Obama and if I were serious about getting GM back on its feet quickly, I would be reassuring the country that privatization is my first priority.  Instead, Obama takes a massively expensive trip to NYC with Michelle, and then leaves for the Middle-East.

Without a an “exit-strategy”, when will the government leave GM?

What are you thoughts?

Let GM Fail!

June 1, 2009

GM has long been hampered by laws, unions, and management trouble.

In the face of impending crisis, the current administration embarked on a plan to save the auto giant, which coincidentally  allows the company to quickly downsize; shedding debt, renegotiating contracts, and closing plants.

If the way to making a leaner, more manageable company is to allow it to bypass the constraints that have hampered it, it would seem that this should be the first available option to the company.  In other words, if it is laws, unions, and bureaucratic meddling which hamper the success of a company, why not rid the industry of these problematic interferences?

Many in America believe the free market has failed.  They point to the current recession and global credit crunch as examples.  However, it is impossible to say the free-market has failed when in reality, the market is not free.

Various actors influence and prohibit the market from being truly independent and dynamic.  Take the current GM situation as an example.  Instead of allowing a poorly performing company to succumb to its own poor performance and fail, billions of tax dollars are being pumped into a company that cannot guarantee it will be better off after the government bailout than before.

Government intervention is not the answer.  A corporation like GM is run by its board of directors and its stock holders.  They should be the controlling forces behind a restructuring, not the Federal Government.  By taking over GM the government enters uncharted territory.  As citizens we have no promise–other than Obama’s word–that the government will revive GM and leave the scene.

Tragically, I can see no quick exit for GM.  Congressional representatives will find it all too easy to continue their involvement in GM to ensure jobs, money, and commerce flow to their districts.  If GM does not quickly right itself, more money will be pumped into it because the current administration will not want to fail to keep GM viable.

Today should have been the end of an automotive giant; instead GM has entered a coma.  The doctors will keep GM breathing, pumping money into its lungs, checking its pulse, and giving transfusions of new leaders.   When will GM die? Maybe soon, but it will consume billions of dollars in resources before its final collapse.