Wednesday, November 19, 2008

Nationalize the Auto Industry

I have been watching the to and fro arguments on why or why not to bail out the Big 3 auto industry: General Motors, Ford and Chrysler. The arguments are shrill on both sides.

Conservatives of both parties are arguing that these companies are “dinosaurs” and the only thing that has occurred that threatens their existence is fatal mismanagement by their own obscenely overpaid management. They don’t build what Americans want and have ignored market trends. Their workers, union workers mind you, are overpaid and lazy.

Sure, they argue, let them file Chapter 11 and let them reorganize. This has happened before and it is what makes our capitalist system the resilient system that it is.

Liberals, Democrats for the most part, argue that this is the premier manufacturing industry in America. To let it die on the vine would be tantamount to inviting a full depression with the 3 million jobs that the auto industry directly or indirectly supports.

Some argue that letting GM go under would be a blow to our national security because of the many defense industry products that it produces.

And that got me to scratch my head.

Defense industry? GM?

Well, yes, in the past. In years past GM had a military division that produced all manner of weapons and things that promoted the killing of our fellow man. GM Defense it was called. But to my recollection, that division was sold off to General Dynamics in 2003.

Another model decision from GM’s management, selling off a military war materiel manufacturing division right in the middle of two shooting wars.

But they still retain a corner in the market of military trucks. They still make and sell the LSSV (Light Service Support Vehicle) also known as a pick-up truck. There is also their
EMP (Enhanced Mobility Package) – God knows what that is. Maybe it’s an automobile.

I can see both sides points here. That is a fatal flaw in my character. Both sides make good points.

So here’s the thing. Are the three companies that dominate America’s largest industry being led by incompetent jerks who are now engaged in begging for corporate welfare? Absolutely. Do I trust them with $25 billion of public money? No way. Is this industry so important that the collapse of it will have a domino effect that will doom our country to an unrecoverable depression? Alas, that is also true.

So what is the answer? Are we going to fork over these sums to these incompetents anyway? No way.

The answer is clear, and I never thought I would hear myself saying this, but the answer is for the Feds to buy up the auto industry.

Nationalize it.

Think of it. If this is the premier industry of our nation, and its collapse will drive the rest of us into economic ruin, this industry is a threat to our national security.

Letting the private sector mismanage this uber-industry when it is so key to keeping us economically sound makes no sense at all. It makes as much sense as privatizing our military services. Letting GM management take over at the Pentagon.

So see? There are not two alternatives that may or may not work. There is a third alternative that eliminates all of the minuses of having a critical industry managed by idiots whose solution to the gas price crisis was not to engineer lower mileage autos, but to guarantee $1.99 gasoline to SUV customers.

And it eliminates the feeling of throwing good money into a garbage disposal. If we, the people make the investment in buying out the Big 3, we the people get to share in the profits. Right?

After all, we’re not Communists.


Anonymous said...

And which government body do you suggest run this nationalized company? Can you give me an example or two of efficiently run government programs?

Hal said...

Oh I was hoping someone would ask me that question. Let me answer it this way.

What is it about the private sector that tells you that they cab run the auto industry better than a government agency? Clearly, very clearly this is just not true. Management has run the auto industry into the ground. That they did it so completely, and that the auto industry is now being described as an industry that is critical to our national economic health only says to me that these guys should be arrested and tried as traitors.

I don't know, what about Homeland Security managing the auto industry? They did OK after Hurricanes Gustav and Ike, didn't they?

Or what about a new cabinet position? Secretary of Essential Industries.

If the private sector can't do the job, and you claim that the public sector is equally inept, who does that leave?

Anonymous said...

I expected that answer as well.

If it can't be run by anyone in the private sector, will get our cars imported (like we do electronics).

Don't fall for the trap that the automobile industry is critical for national security. It's BS intended to scare you.

Anonymous said...

Here's another novel idea.

How about forcing them to hire someone that has a track record of running a successful automobile busienss (maybe someone from Honda or Toyota's North American operation).

Hal said...

"Forcing them?" Now that sounds a little despotic and I thought we were finally putting an end to all of that.

Well soon anyway.

No, it's better to buy them out. But let's wait until their stock really goes down to rock bottom prices.