GM and Chrysler are back at the federal trough, this time hoping to extract billions more in “loans” from American taxpayers. This is not a surprise. David Z asks the right questions at no third solution:
What happens when April comes around, and General Motors still doesn’t have a viable future? Do they get more money? At what point does the nonsense end? At what point do the politicians recognize and accept the fact that continually taking money from the taxpayers and giving it to companies like General Motors in massive corporate welfare schemes can’t ever work? …
Giving money to Detroit auto makers is nothing more than a lesson in how to destroy wealth. First, we destroyed $17.4 billion. Next we’ll destroy at least $14 and probably $21.6 billion, as the article states. At some point we (i.e. Congress) need to realize that these companies are dead. Walking dead, but they’re dead. Treat the original “loans” as a sunk cost, hope to recover something in bankruptcy, and move on with a commitment to never make that mistake again with someone else’s money.
That won’t happen, as suggested by the Obama administration yesterday.
“The president of the United States wants to see a strong and vibrant auto industry that’s employing tens of thousands of hardworking Americans and building the cars of tomorrow for Americans right now. That’s what this president wants to see,” Obama spokesman Robert Gibbs told reporters aboard Air Force One.
President Obama apparently believes that wishing makes it so. It doesn’t. The rational economic perspective would remove obstacles to a strong and vibrant free market that deploys – and redeploys – its finite resources in the most productive manner possible. Employment of hardworking Americans (and Chinese and Germans and Brazilians and …) would follow.
But the president isn’t interested in a rational economic perspective because the president, like all the politicians in Congress, is interested only in political games. Watching as winners and losers emerge based on merit is too risky. Picking the winners and losers himself better enhances his power. That’s what this president wants to see. A free market without centrally-planned allocation of resources won’t provide that, so it mustn’t be allowed.