This guy cannot be serious.
Contrary to what many pundits claim, the Obama administration’s approach to the auto industry is not anticapitalist.
Without a drastic restructuring neither Chrysler nor GM would have a chance for long-term success. Not only would thousands of workers lose their jobs, but the government would lose tens of billions of taxpayers’ dollars. So rather than simply writing a check to the auto industry — the policy of the previous administration — the Obama team is focused on fundamentally restructuring these two businesses.
So far, the auto task force has done an admirable job of refusing to rubber stamp the industry’s proposals. It’s used rigorous analysis to make tough decisions. These decisions include “right sizing” industry capacity by cutting many union and white-collar jobs and closing numerous manufacturing plants and dealerships; making the unions accept lower wages and benefits so that these companies can compete; and cutting the debt crushing these companies by forcing many of the stakeholders — workers, retirees and creditors (including the government) — to take equity rather than cash for their obligations.
Capitalism is anything but this. Capitalism specifically entails that those companies that can not produce goods and services that are desired must fail.
Chrysler has already stopped production (free subscription required) and it doesn’t appear the auto industry has collapsed. The other manufacturers will pick up the production, or they won’t. And those resources will be diverted elsewhere. If we aren’t demanding Chrysler cars, why are we building them?
Monthly unit production at Ford and Toyota Motor Sales U.S.A. will surpass last year’s numbers as soon as August, IHS analysts Haig Stoddard and Tracy Handler said. But that will not mean stable U.S. production, they said.
“Other manufacturers can make up some of the extra demand from inventory,” they said last week. “We’ve increased production for most other manufacturers, just not enough to make up for declines at GM and Chrysler.”
So, we’re supposed to throw tax dollars at a bad company and be forced to buy or at least subsidize products we don’t want. And it should be obvious that producing Chryslers necessarily limits Ford and Toyota from producing.
Hope and change!!!
As Mises wrote in Economic Freedom and Interventionism
There is today practically no limit to the peoples’ and their rulers’ pro-statist or, as one says today, pro-socialist enthusiasm. Hardly anybody is courageous enough to raise objections if some expansion of state power?popularly styled the “public sector of the economy”?is suggested. What slows down and in most fields almost stops the progress toward more socialization of business enterprises is the manifest financial failure of almost all nationalization and municipalization ventures.
The social and political ideal of our age is planning. No longer should the individuals have the right and the opportunity of choosing the mode of their integration into the system of social cooperation. Everybody will have to comply with the orders issued by society’s, i.e., the state’s, the police-power’s, supreme office. From the cradle to the coffin everybody will be forced to behave precisely as he is ordered to behave by the makers of the “plan.” These orders will determine his training and the place and the kind of his work as well as the wages he will receive. He will not be in a position to raise any objections against the orders received; according to the philosophy underlying the system, the planning authority alone is in a position to know whether or not the order is or is not in accordance with its plan for the “socially” most desirable conduct of affairs.
Is anyone surprised by the author’s use of the word “force”? Is anyone surprised by the administrations actions: to the bondholders, to the creditors, to the public? The only question remaining is “who’s next?”.