WASHINGTON -- I said the president who is inordinately fond of the first-person singular pronoun want to disabuse people of this notion that somehow we enjoy meddling in the private sector. He said that in March when the government already owned 80 percent of AIG Fannie Mae and Freddie Mac.
When a difficult decision has to be made on matters like where to open a new plant or what type of new car to make the new GM not the United States government will make that decision. But the government is GMs largest shareholder customer tax collector regulator partner in determining employees compensation protector of dealers and pension guarantor. GMs other large owner the United Auto Workers is increasingly a government dependant.
Yet Steve Rattner and Ron Bloom two of the presidents fixers of Detroit recently wrote in USA Today that government will play no role in running GM. They were not under oath.
What we are not doing -- what I have no interest in doing -- is running GM says the president who when not firing GMs CEO purging its board of directors and picking new members is designing new products (imposing fuel economy requirements that will control size weight passenger capacity and safety). The president overcoming his professed reluctance to run GM resembles the journalist Don Marquis when after a month on the wagon he ordered a double martini and exclaimed: Ive conquered my goddam willpower.
Washington mandates that Detroit must build cars for which there is much less demand than Washington demands that there be. Then Washington tries to manufacture demand with a $7500 tax credit for purchasers of the electric Chevrolet Volt supposedly GMs salvation. So GM is to be saved by a product people will not buy without a cash incentive larger than the income tax paid by 83.4 percent of Americas families.
It is reasonable to assume that GM will become profitable -- if you make unreasonable assumptions about annual vehicle sales and GMs share of the market. Besides the government that runs Amtrak (which has lost $23 billion in todays dollars just since 1990) vows to make GM efficient.
But one reason Amtrak runs on red ink is that legislators treat it as their toy train set preventing it from cutting egregiously unprofitable routes. Will Congress passively accept auto plant-closing decisions? Rattner says Washingtons demure vow is: No plant decisions no dealer decisions no color-of-the-car decisions. He is one-third right. Last week under the headline Senators Blast Automakers Over Dealer Closings The Washington Post reported Because the federal government is slated to own most of General Motors and 8 percent of Chrysler some of the senators said they have a responsibility as major shareholders do to review company decisions.
The pressure to politicize the economy is spreading. John Sweeney head of the AFL-CIO and Gerald McEntee head of the American Federation of State County and Municipal Employees -- which is government organized as an interest group to lobby itself -- have demanded the resignation of two directors of Citigroup. Their premise is that businesses receiving direct government subventions should conform to the wishes of the presidents allies.
GM is adopting new ways to lose money: Responsive to its UAW masters GM is moving from China to America the production of some components of one Chevrolet model. Says UAW President Ron Gettelfinger It should be built here if its going to be sold here. That principle now successfully asserted means economic autarky -- the end of international trade and of prosperity.
The governments $50 billion -- so far -- acquisition of the shadow of GM will injure with unfair financial advantages the surprisingly healthy U.S. auto company Ford. Of course the government does not intend that injury any more than it intended to cause protests in Mexico over the high price of corn tortillas a result of Washingtons mandate that Americans burn corn (ethanol) in their cars.
Washingtons rescue of GM began because GM is too big to fail and bankruptcy is (well was) unthinkable. Big? GMs market capitalization $375.8 million on Wednesday is about the size of California Pizza Kitchens ($340 million) -- is it too big to fail? -- and one-eleventh that of Harley-Davidson ($4.3 billion). Fail? If GM has not already failed New Coke was a success.
The administration is determined to prop up GM as a jobs program for the UAW and Midwestern states rich in electoral votes. This frenzy will intensify as the administrations decisions deepen the debacle.
George F. Will is a 1976 Pulitzer Prize winner whose columns are syndicated in more than 400 magazines and newspapers worldwide.
WASHINGTON -- I said the president who is inordinately fond of the first-person singular pronoun want to disabuse people of this notion that somehow we enjoy meddling in the private sector. He said that in March when the government already owned 80 percent of AIG Fannie Mae and Freddie Mac.
When a difficult decision has to be made on matters like where to open a new plant or what type of new car to make the new GM not the United States government will make that decision. But the government is GMs largest shareholder customer tax collector regulator partner in determining employees compensation protector of dealers and pension guarantor. GMs other large owner the United Auto Workers is increasingly a government dependant.
Yet Steve Rattner and Ron Bloom two of the presidents fixers of Detroit recently wrote in USA Today that government will play no role in running GM. They were not under oath.
What we are not doing -- what I have no interest in doing -- is running GM says the president who when not firing GMs CEO purging its board of directors and picking new members is designing new products (imposing fuel economy requirements that will control size weight passenger capacity and safety). The president overcoming his professed reluctance to run GM resembles the journalist Don Marquis when after a month on the wagon he ordered a double martini and exclaimed: Ive conquered my goddam willpower.
Washington mandates that Detroit must build cars for which there is much less demand than Washington demands that there be. Then Washington tries to manufacture demand with a $7500 tax credit for purchasers of the electric Chevrolet Volt supposedly GMs salvation. So GM is to be saved by a product people will not buy without a cash incentive larger than the income tax paid by 83.4 percent of Americas families.
It is reasonable to assume that GM will become profitable -- if you make unreasonable assumptions about annual vehicle sales and GMs share of the market. Besides the government that runs Amtrak (which has lost $23 billion in todays dollars just since 1990) vows to make GM efficient.
But one reason Amtrak runs on red ink is that legislators treat it as their toy train set preventing it from cutting egregiously unprofitable routes. Will Congress passively accept auto plant-closing decisions? Rattner says Washingtons demure vow is: No plant decisions no dealer decisions no color-of-the-car decisions. He is one-third right. Last week under the headline Senators Blast Automakers Over Dealer Closings The Washington Post reported Because the federal government is slated to own most of General Motors and 8 percent of Chrysler some of the senators said they have a responsibility as major shareholders do to review company decisions.
The pressure to politicize the economy is spreading. John Sweeney head of the AFL-CIO and Gerald McEntee head of the American Federation of State County and Municipal Employees -- which is government organized as an interest group to lobby itself -- have demanded the resignation of two directors of Citigroup. Their premise is that businesses receiving direct government subventions should conform to the wishes of the presidents allies.
GM is adopting new ways to lose money: Responsive to its UAW masters GM is moving from China to America the production of some components of one Chevrolet model. Says UAW President Ron Gettelfinger It should be built here if its going to be sold here. That principle now successfully asserted means economic autarky -- the end of international trade and of prosperity.
The governments $50 billion -- so far -- acquisition of the shadow of GM will injure with unfair financial advantages the surprisingly healthy U.S. auto company Ford. Of course the government does not intend that injury any more than it intended to cause protests in Mexico over the high price of corn tortillas a result of Washingtons mandate that Americans burn corn (ethanol) in their cars.
Washingtons rescue of GM began because GM is too big to fail and bankruptcy is (well was) unthinkable. Big? GMs market capitalization $375.8 million on Wednesday is about the size of California Pizza Kitchens ($340 million) -- is it too big to fail? -- and one-eleventh that of Harley-Davidson ($4.3 billion). Fail? If GM has not already failed New Coke was a success.
The administration is determined to prop up GM as a jobs program for the UAW and Midwestern states rich in electoral votes. This frenzy will intensify as the administrations decisions deepen the debacle.
George F. Will is a 1976 Pulitzer Prize winner whose columns are syndicated in more than 400 magazines and newspapers worldwide.
