Hugh Hewitt
Just say no to Government Motors and Obamacars
By: Hugh Hewitt
Examiner Columnist
June 1, 2009
I won't buy a socialist car, which means I won't be buying a GM or Chrysler car for as long as the U.S. government owns huge blocks of the companies.
Today's bankruptcy filing by GM will see the end of a once-great car company and the birth of a federal government-union partnership dressed up as a business. It won't work, even with the $50 billion federal tax dollars plowed into the new entity past and present, and not even with the UAW's "concessions."
Governments can do very few things well and almost nothing efficiently.
Yes, it can build amazing armies and the weapons and technologies to support them, but only at extraordinary cost and only with often dismaying waste. We pay these prices because we absolutely need the incredible effectiveness of our military that results from the enormous investment of resources. We also recognize the sacrificial spirit of the men and women in uniform who serve in the military. They aren't in it for their jobs or the health benefits.
But a government -run car company is a very unnecessary, indeed a deeply dismaying prospect. And not primarily because it won't make good cars at competitive prices, though almost certainly neither the new GM or the new Chrysler will do so. History tells us these ventures are highly unlikely to succeed.
Rolls Royce and British Leyland Motor Corporation were nationalized by the British government, the former in 1971, the latter four years later. Neither intervention succeeded in making either company profitable.
Six months ago the New York Times ran an article that reminded readers that British Leyland "went through £11 billion of inflation-adjusted British taxpayer money, or $16.5 billion, in the ’70s and ’80s before going out of business."
"All that is left of the company now are memories of cars like the Triumph," the story continued "and a painful lesson in the limited effectiveness of bailouts."
So a year and two and five from now we will see the brave new car world of the U.S. looking increasingly like the very familiar failures of the past. If Congress remains in the hands of democrats, the tax subsidies will continue to flow until finally, under some American Thatcher down the road (may it be 2013), the game is called and the very expensive ghost given up.
Even if these massive subsidies for a time present appealing products at subsidized prices, however, I won't be visiting a GM or Chrysler lot no matter the product offered. The very idea of a socialized American car company ought to cause millions of Americans to reject the idea of doing their car shopping at those venues.
The DNA of America is coded with private enterprise and individual risk-taking and reward. The idea of the government owning businesses of any sort is not merely bad economics, it is terrible government. Buying a GM or a Chrysler is consenting to a massive leftward lurch in the American form of government, a "buying-into" a bought up company, and one gobbled up in a series of transactions which pummeled the private investor while protecting the pols and their union supporters.
Any American who values their traditions of free enterprise and political freedom will urge the federal government to disinvest itself from these companies immediately. The federal government can quickly put its controlling stake in the companies on the market and do so at whatever price makes the market.
New, private sector leadership can then decide how best to proceed in the new world of rising government mandates on gas mileage and hybrid design. The billions sunk into these companies will only be partially recovered by a quick reconversion of the government's ownership into private stock, but so, too, will the bleeding of tax dollars end and, more important, so will the experiment with American socialism.
Buy Ford. Buy Toyota. Buy anything that isn't owned and operated by the federal government. There are plenty of great cars out there. You don't have to buy one that costs not just your cash, but also your commitment to free enterprise and all the benefits that flow from it.
Examiner columnist Hugh Hewitt is a law professor at Chapman University Law School and a nationally syndicated radio talk show host who blogs daily at HughHewitt.com.
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