Sunday, May 3, 2009

Psst...Wanna Buy Some Stock?

If I wanted to buy some stock in an auto company, I could have easily done it. However, my government has decided that they should do it on my behalf.
Where in the Constitution does it say that this is the role of government?
The US auto industry is composed of domestic and foreign controlled companies. All of the auto companies, whether foreign or domestic controlled, have public stockholders located all over the world. So what difference does it really make to the average citizen (who is not a member of the United Auto Workers union) whether Chrysler or GM survives in its pre-2009 form? As long as it is profitable, cars will be designed and manufactured in the US, employing US workers. Whether the paycheck comes from Toyota, GM or some new startup really is of little consequence.
This seems to be OK for other industries, but not the auto industry. I just don't get it.
I wrote some time ago (November, 2008 and December, 2008) that the solution for the ailing US car companies was a pre-packaged bankruptcy. This is exactly what is happening with Chrysler. The ironic upshot of the present plan is that the company is actually being kept alive by the government's infusion of billions of our dollars so that it can be taken over by Fiat. Didn't someone notice that the headquarters of Fiat was located in Italy?
By the way, it really irked me when I heard President Obama rail about the private entities that did not go along with the government's plan in which the private entities get pennies on the dollar for their secured Chrysler debt. It seems to me that they have every right under our system to plead their case in court if they think this will result in a better outcome.
The bottom line is that the government is not interested in the bottom line. It is a political institution that responds to political pressures. It should exit itself from this mess as quickly as it can.

1 comment:

Neverwrong said...

Which country is now more socialist? US or France?