Trickly-Down Socialism

doug_thompson

Wake up, smell the coffee; GM ran itself into the ground

By Doug Thompson


President Obama forced the resignation of Rick Waggoner, president of General Motors. He also laid out some very tough conditions for the American-based auto industry.
Editorial page writers in Detroit reacted with a spat of temper. They defended Waggoner as a sacrificial victim to political expediency.
OK. Let me get this straight. Forcing out a man who presided over the utter collapse of his company was political.
Upon reflection, I guess the Detroit papers do have a point. The firing was political. In a capitalist country — one where a free market calls the shots — there would be no company for Waggoner to be president of. GM would have crashed and burned last year.
GM’s continued existence is nothing but a manifestation of American political will. Large gifts of public money keep this company alive.
GM could have filed for bankruptcy, but what is bankruptcy except another form of government intervention?
I don’t want to live in a Darwinian jungle of unbridled capitalism either, but let’s stop kidding ourselves here. The United States’ economy is far farther from capitalism than I ever expected to see.
Let’s not go nuts like the Detroit News. In a frenzy of homerism, its editorial board wrote:
“General Motors couldn’t possibly have imagined this outcome when it made the calculated decision last fall to ask for survival loans from the federal government instead of taking its chances on a bankruptcy filing. Now, GM may get the bankruptcy anyway, and its future will apparently be dictated by a White House whose vision for the company is driven more by ideology than the marketplace.”
“Calculated decision” my foot. GM asked for survival loans because the only other option was bankruptcy. If this was a “calculated decision,” the calculation didn’t take long.
What has GM done right in the past 20 years? How could a company go from a position of worldwide dominance to this mess if management had been merely competent?
“President Barack Obama tore up the turnaround plans of both automakers Monday and handed them plans of his own,” the paper raved on. “While the president said repeatedly that he ‘has no interest’ in running a car company, he appears to be very much running GM.
“The question of most concern to Detroit is: Will he run them into the ground?”
Step one: Wake up. Step two: Smell coffee. GM is already run into the ground — like a meteorite that digs its own crater.
It was GM’s unwillingness to change itself and the federal government’s refusal to stick by things like air quality and fuel emission standards to force the change that let things go this sour.
The argument goes that profitability for American car companies still lies in building guzzlers. That’s exactly the type of short-term thinking that got us in the mess we’re in.
“Obama has been harshly critical of the way Detroit’s automakers run their businesses. We’ll see now if he can run GM any better.”
Folks, he can’t do any worse.
President Obama isn’t killing capitalism. We are. We are insisting on keeping employers alive whether they succeed in the market or not.
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Thompson
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We’re not headed to European socialism. That’s a system where the government assures you of an income and health care directly. What we have here is American socialism. That is where your income and health care are provided through your employer. The government’s job is to prop up your employer by any means necessary. That way the facade of a free market economy can remain. Also, investors can profit, at least during good times. During good times, everybody is an investor.
Call it trickle-down socialism.
Waggoner’s dismissal was politically necessary. President Obama had to cut a slash into management first. Now he can turn his blade on labor. He will force the once-mighty United Auto Workers into concessions that are far more than they are willing to give.
UAW workers will suffer but will still have a job and insurance. They will also be trapped in their jobs because in this economy, there’s nowhere they can go even if they could sell their houses.

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