The LA Times comments:
Reporting from Washington — President Obama’s plan to save failing U.S. automakers — and make them the instruments for creating a cleaner, greener transportation system — marked a major step across the line that traditionally separates government from private industry.
His announcement Monday of a new position on bailing out Detroit went beyond a desire to be sure tax dollars were not wasted in bailing out struggling companies. It put the Obama administration squarely in the position of adopting a so-called industrial policy, in which government officials, not business executives or the free market, decided what kinds of products a company would make and how it would chart its future.
His automotive task force concluded, for example, that the Chevy Volt, the electric car being developed by General Motors Corp., would be too expensive to survive in the marketplace. It declared that GM was still relying too much on high-margin trucks and SUVs, and that Chrysler’s best hope was to merge with a foreign automaker, Fiat.
Judgments like those are usually rendered in corporate boardrooms or announced in quarterly reports. But this time they were coming directly from the White House.
President Obama says he doesn’t want to run GM, but apparently he means that only in the sense that he doesn’t want to manage its day-to-day operations. Choosing the CEO, dictating business plans, and passing judgement on products; all that he is willing to do.
Obama says he doesn’t want to waste the taxpayers’ money. That’s a load of crap. Every dollar we put into these failing companies is wasted. Soon these companies will be going into bankruptcy; everyone sees that now. We could have let them go into bankruptcy several billion dollars ago.
But apparently we now live in a country where the government runs businesses, and not merely in the old-fashioned way (“you’d better make more home loans to low-income buyers, or else”) either. We have a model of how government-run businesses work out, and it’s not pretty.