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Source link: http://archive.mises.org/10003/obama-to-government-motors-lets-roll/

Obama to Government Motors: “Let’s Roll”

May 22, 2009 by

The last remnants of the American free-market system are experiencing a quick death by strangulation. Perhaps the most disturbing casualties of government intervention are General Motors and Chrysler, two disgraced automakers that have gone from private ownership to the public trough virtually overnight. FULL ARTICLE

{ 36 comments }

Don Lloyd May 22, 2009 at 8:12 am

“FULL ARTICLE ” not linked to anything.

Regards, Don

Dick Fox May 22, 2009 at 8:35 am

Don,

The link on the home page is not broken.

Imagine, In less than 6 months the Obama administration has virtually natioanalized the banks and the auto industry and expectations are that the health care industry will be nationalized this summer. You could make the case that this is a total nationalization along the Fascist model.

Michael Vogt May 22, 2009 at 9:14 am

I’m sure they’ll fix it soon, but here’s the link to the full article for your convenience:
http://mises.org/daily/3484

Enjoy Every Sandwich May 22, 2009 at 9:25 am

I’m getting the ugly feeling that it won’t be long now before the Yugo is considered a “luxury car”.

Walt D. May 22, 2009 at 10:28 am
Alex Fabijanic May 22, 2009 at 10:35 am

O ye of little faith, don’t you believe that Mr President knows what he’s doing. He has a perfect plan for the auto industry. Yes he can:

“Consumers pay less for fuel, which means less money going overseas and more money to save or spend here at home. The economy as a whole runs more efficiently by using less oil and producing less pollution,” he said. “And companies like those here today have new incentives to create the technologies and the jobs that will provide smarter ways to power our vehicles.”

Read more at

http://www.guardian.co.uk/world/feedarticle/8516003

greg May 22, 2009 at 12:10 pm

Capitalism died when the government allowed unions to operate under closed shops. And the US auto companies began a slow death the day the UAW took over.

The unions are protected by politicians and Democrats are quick to hand tax dollars over to them and the majority of GM.

So this isn’t a lesson in auto manufacturing in the US, this is a lesson on the cycle of unionization which will end with no jobs at all.

Enjoy Every Sandwich May 22, 2009 at 12:23 pm

I wonder if this shafting of the bondholders will have an impact on investment as a whole. I would certainly be afraid to invest in any business; at any moment the fedgov can swoop in and steal my investment, and expect me to thank them for it.

Horst Muhlmann May 22, 2009 at 12:55 pm

As a result of these UAW deals, I consider every bond in the US, public or “private”, to be junk.

I also do not own stock in any US company. I urge others to do the same.

waywardwayfarer May 22, 2009 at 1:09 pm

So Big Brother is going to be manufacturing “green” cars. Undoubtedly the next step will be massive taxes and trade barriers to force people to buy those instead of cars made by foreign companies who can still actually produce what consumers want.

Flip on the turn signal; we’re moving into the fast lane on the Road to Serfdom and putting the pedal to the metal!

Steven May 22, 2009 at 1:29 pm

It’ll be funny and sad at the same time to witness the birth of government controlled car companies. It’ll probably end up being like Lada, USSR’s former government owned automobile company. What a piece of junk!

J Cortez May 22, 2009 at 1:53 pm

I second waywardwayfarer’s sentiment.

We will now have the cars to travel on the Road to Serfdom.

(8?» May 22, 2009 at 2:20 pm

Government Motors

“Unsafe at Any Speed”

John Brock May 22, 2009 at 3:34 pm

First let me say that I would have let the car companies collapse. Period.

In response to “When the executive branch intervenes in a private business and ousts management, bailout or not, it is a staggering violation of the American ideal of free enterprise.”

Wasn’t it they who went to the government for money? Wasn’t it they who flew in on corporate jets to tap into tax payer money? Wasn’t Ford the only company who didn’t take the money of which the government now has no control over?

The blame is not on the government. The blame is on American auto makers running their businesses poorly.

If a private enterprise asks the government for this much financial assistance, then that enterprise should forfeit its right to full ownership or even ownership at all, until such a time as it can pay back what it borrowed and prove that it will remain viable once it’s asked to fly on its own again.

If executives were to come to me and ask me for a sum of money equal to or greater than their company is worth because they, for many years, gave into unions and ran the company into the ground, the first thing I would say to the executive staff after due diligence is…O.K., now you’re fired. I would be looking to protect my investment. I would be looking to take control so that the company could be made viable again.

One can blame the government for getting involved. It should not have. But one can not blame the government for wanting control once it did get involved. It is acting as any other smart, prudent investor would.

Tim May 22, 2009 at 4:03 pm

http://upload.wikimedia.org/wikipedia/commons/1/18/ZAZ-968_front.jpg

I can’t wait until I get to ride one of these!

Tim Kern May 22, 2009 at 4:12 pm

Ms DeCoster writes, “The apparatchiks on the Potomac have the authority to coordinate production in a manner that compliments their political and social agenda.”

THE HELL THEY DO!

Unless the American people, and fast, wake up to this wholesale fascist state (rightly identified by the author), we’ll be in chains well before the next election.

Whatever happened to the men and women who took an oath to “protect and defend the Constitution of the United States, from all enemies, foreign and domestic?” Greatest generation? Korean / Viet Nam / Oil Field / Afghanistan Heroes?
Note: That oath isn’t about voting.

Wusses. They’re protecting their pensions.
With all due respect to Pogo, “We have met the enemy, and we won’t recognize him for what he is.”

I miss our Constitution…

Franklin May 22, 2009 at 5:00 pm

Perhaps I’ve not paid enough attention, or I am naive to ignore the purpose of talking head TV debates, which is to oftentimes simply demonstrate how clever the interviewer/interviewee is.

How come when the CEOs of a government-supported corporation lobby for “investment” (self-serving interests) in the name of what’s better for the country, be it green technology, new manufacturing processes, a new kind of vehicle, a new plant…. we get into jargon jousting? Cap and trade… Bond ratings…. public-private partnerships…. debt ratios .. asset allocation mumbo jumbo…. Why won’t the interviewer just simply say, “You’re the CEO of a business. If you think it’s a good idea, then why don’t you just go do it? Why aren’t you raising venture capital? Why are you playing crony corporatism with the government rather than ask your shareholders and bondholders and colleagues to ante-up? Why won’t you just go do it, if it’s so important?!”

Ron May 22, 2009 at 5:05 pm

I used to have patience waiting for America to wake up. It’s over. The unions and Obama are strangling the economy and now will gut health care.

I won’t buy a Chevy or a Chrysler ever again.I don’t even like Fords for their silly faults perpetuated year after year, but I’d rather buy a Ford than buy a communists car!

Any one who sides with these fascists deserves no money from the hard working ethical toiling masses.

The ways of extortion are upon us, all hail Obama.

damocles May 22, 2009 at 5:32 pm

The only real question here is whether Obama’s plan is a communist dictatorship or a fascist dictatorship. It probably won’t matter to the slaves…er citizens.

Jed Green May 22, 2009 at 6:01 pm

“The last remnants of the American free-market system are experiencing a quick death by strangulation.”
I think statements like this are damaging and inaccurate. Not to suggest that I support what the Federal Government is doing in the case of GM but to suggest that the free-market is almost dead is a huge over generalization of the facts. The free-market is much larger than a couple of auto manufacturers and banks. While these actions do serve to limit the free-market there are many businesses and markets that the government has not interfered with. It is a great opening statement in that it attracts the interest of the reader but it also servers to discredit the points and opinions following as an extreme, highly politicized view.
If the debate is to be taken seriously people need to be careful of avoiding such statements of broad generalization. Stick to the facts and keep the arguments in scope with the issues. One of the biggest attractions for libertarianism in my view is that they don’t politicize issues to the degree the the Dem and GOP do. Callous rhetoric has its place but for a sober and serious debate we must maintain a grip on reality.

2nd Amendment May 22, 2009 at 6:25 pm

Jed Green,

What free market ?

You have to pay taxes on your wages, profits, property. There is an astronomical number of rules and regulations prohibiting sales or making it difficult to sell certain products like drugs, medications, day care etc.

This is pretty much a controlled economy. Try starting a business in California and see for yourself if this is a free market !

Bruce Koerber May 22, 2009 at 9:50 pm

This is one more reason why you should heed the advice of Peter Schiff and Jim Rogers and get out of American stocks and bonds. The contractual foundation of these stocks and bonds is now counterfeit like the dollar. None of these can protect your wealth, rather they make your wealth easy pickings for the unConstitutional coup.

Gil May 23, 2009 at 12:32 am

“This is one more reason why you should heed the advice of Peter Schiff and Jim Rogers and get out of American stocks and bonds.”

You’d think those over the LewRockwell site are tickled pink with the thought that the U.S.A. might collapse what with their articles on survivalism (“autarky is good when we advocate it”, apparently) and ‘dead’ shopping malls, and so on. But then the good thing about such a collapse is the way it would allow Americans to start again from first priciples (working from sunrise to sunset trying to grow food, no government to obey or pay taxes to, etc.).

John May 23, 2009 at 3:37 am

Gil, a couple of responses:
1) I don’t think it’s necessarily autarky that they’re advocating – autoarky implies that a very large group should strive to be completely self-contained and self-supporting, a notion that most libertarians find undesirable for a number of reasons.

2) I also don’t think it’s so much eagerly anticipating the collapse as much as it is eagerly anticipating being proven right. The Austrians who believe that Keynes’ ideas were wrongheaded and counter-productive see this collapse as the product of bad ideas. If the intellectual battle is between Keynes’ ideas and Austrian ideas, as they see it, a gigantic depression being caused by Keynesian theory proves that their criticism was well-founded – an enormous intellectual victory for a school of thought that has been historically disrespected.

Brian Macker May 23, 2009 at 9:58 am

It’s disgusting.

Bruce Koerber May 23, 2009 at 10:59 am

There will be suffering because of the injustices of the ego-driven interpreters and the ego-driven interventionists. Information about how to alleviate some of the suffering is valuable. Since the market economy is really where information flows LewRockwell.com is functioning as an accessible and valuable portal of the market process.

Kendall May 23, 2009 at 12:46 pm

One of the beneficial aspects of the free market is that it rewards thiose who provide a good product at a reasonable price and punishes those who do not. GM and Chrysler, in collision with the UAW, have destroyed these once profitable companies through a combination of business malfeasance and the nefarious and corrupt influence of organized labor. Both should have been allowed to die a merciful death. But corrupt politics in the form of the Obama administration has intruded to save its favored labor union from the just consequences of its own greed and thuggery. Now the taxpayers are on the hook for their mistakes. This is an outrage which must not be allowed to stand. No right-thinking person should consider buying a GM or Chrysler product. Only in this way, can we bring about the just result that the free marketplace would have imposed had the government stayed out of it. Boycott GM and Chrysler. And vote the corrupt Democrats, and any like-minded Republicans, out of office.

Walt D. May 23, 2009 at 2:24 pm
Mike D. May 23, 2009 at 2:47 pm

I know everybody here hates unions and would like to blame the UAW for the demise of GM and Chrysler. However, I think we overlook the basic problem. In 1989 you could buy a 560S Mercedes for about $80,000. Today a S55 is about the same price. However, the price of an entry level vehicle has doubled. A Prius costs over $20,000. Why are the entry level vehicles so expensive? OK we have government “safety” requirements. Peter Schiff’s explanation of why College is so expensive also explains why cars are so expensive. Cheap financing allows people to buy cars they would otherwise be unable to afford. Now that credit has dried up, how is the average person supposed to come up with the $25,000 out the door price of an entry level vehicle?
The problem with “Government Motors” is that the eco-friendly (?) cars that they produce will be very expensive. People will not be able to afford them without a subsidy in one form or another. However, since the subsidy is coming from government, who is going to pay for this subsidy? The Chinese? The net result will be that they build the cars and nobody will be able to afford to buy them except for those forced to buy by government regulation.
It is no coincidence that under socialism the USSR, very few people owned cars.

Kakugo May 23, 2009 at 4:11 pm

It’s astonishing that people are failing to see that this is the whole British Leyland fiasco all over again but worse. The British destroyed their car industry, one of the most innovative in the world, in less than twenty years and it wasn’t just the government to blame. The management, the unions, the banks, the local politicians trying to get a quick vote by keeping the local factory open, even the people who kept buying atrocious cars to “help the economy” out of a misguided sense of patriotism instead of heading to the nearest Daihatsu or Volkswagen dealership were to blame. But at least the British proved unwilling (or more likely unable) to increase tariffs on imported vehicles to force people into buying their own unpalatable products: expect Government Motors to lobby to have tariffs on imports increased and to make life miserable for foreign companies bulding cars in the US. When tariffs will hit hybrids made in Japan I’ll be laughing my head off reading the motivation…

Mike N. May 23, 2009 at 11:59 pm

Jed Green,

You asserted that remark such as “the American free-market system is experiencing a quick death by strangulation.” Was somehow damaging and inaccurate?
With all do respect sir Obama has only been president for six months and look what he’s accomplished in this brief honeymoon period. We are witnessing the beginning of the end for the America that we grew up in and have worked hard for our high standard of living only to be told that we didn’t deserve it and that my wealth would be returned to its rightful owner?

You say we need to maintain a grip on reality, well the reality of the situation is that we have powerful people disregarding their oath of office to the Constitution and the rule of law sitting back to let activist courts conduct social change legislating from the bench while the politicians hide behind their robes claiming it’s out of their hands.

No Mr. Green we’ve been doing it your way and how’s it been working out for us? You think these things are happening just by chance? There is a time for reasoned words and there is also a time for action and we are fast approaching the latter, the Supreme Court upheld the 2nd Amendment by one vote, all freedom loving Americans should think about that!

“In the beginning of a change, the Patriot is a scarce man, Brave, Hated, and Scorned. When his cause succeeds however, the timid join him, for then it costs nothing to be a Patriot.” ~Mark Twain

Yancey Ward May 24, 2009 at 12:49 pm

In Soviet Amerika, the cars drive you.

Vanmind May 24, 2009 at 4:17 pm

Yes, I now have little incentive to invest in American businesses.

Ralph Fucetola JD May 24, 2009 at 10:36 pm

Il Duce e sempre dritto.
Il Duce e sempre dritto.
Il Duce e sempre dritto.

See how easy it is to believe in the new America.

See how easy it is to forget history.

What did Murray Rothbard say at the end of For a New Liberty? Something about the ethical choice between Freedom (market, peace, prosperity) and State (dictatorship, war, death).

Better forget that too.

Il Duce e sempre dritto.
Il Duce e sempre dritto.
Il Duce e sempre dritto.

Seregon May 27, 2009 at 11:04 pm

The only good thing, if it can be called good…. the left is showing it’s true face, no holds barred. At least now the whole world can see American Socialists at work.
They no longer have deniability. We just can’t wait until Obama has people to man the barricades, and run the camps.

Jed Green May 30, 2009 at 10:14 pm

Re: 2nd Amendment:

“What free market?” Our free market. The one where we still have a choice about where we spend our money. The one where we can choose not to give business to BoA, GM or any other government controlled entity. The one where non-government controlled businesses still operate in EVERY market.
“This is pretty much a controlled economy.” Is it? For certain a number of high profile business are now under government control. For certain the money supply is mismanaged. But do they control the WHOLE economy? No, I don’t think so. Not even close. New businesses are still opening every day. Some areas of this nation have not felt the recession like others. The town I live in has had new restaurants, hotels, spas, retail shops and assorted services open for the duration of this recession.

P.S. California is not the whole economy, not even close. Can’t open a new business? Well at least you can save seals.

My point was more to the sensationalist nature of the statement. “The last remnants of the American free-market system are experiencing a quick death by strangulation.”

Mike N.
1. Obama is not the beginning of the end, though he may have made strides towards bring the end nearer. It began at least 70 years ago.
2. We have had “powerful people disregarding their oath of office to the Constitution and the rule of law sitting back to let activist courts conduct social change” for at least 70 years.
3. Our high standard of living has a cost, and we are now paying it. You and I are just as responsible for this through our participation. One cannot escape responsibility with sensational speech, unless you are a powerful person disregarding your oath of office to the Constitution and the rule of law. In which case, perception is reality and you are clear to rape all you wish so long as you make it sound good.
4. “No Mr. Green we’ve been doing it your way and how’s it been working out for us?” When? At point in America’s history have we had sober, rational discussion of the problems? At what point in America’s history has crisis been met with clear minded, objective and rational decision making? At what point in America’s history has the problem not been met with sensationalized, over generalized, political rhetoric that serves only to shape perception? Reality is not slave to perception as we have been lead to believe. That is the lesson that is being taught to us now. That is the lesson we need to be learning. And that is the last thing anyone will be talking about.

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