Diary

How About A Tea Party About The Auto Industry?

From time to time I come up with a good idea, and when I do I like to share them with people. That’s one reason I started this blog.

Last week I had a pretty good one – namely, that the Republican Party ought to raise the $15 million to keep the DC voucher program going with private funds until such time that they can resurrect the public funding for it. That idea landed this site on RealClearPolitics.com’s Best Of The Blogs on Friday, which for a blog less than a week old at the time was, I thought, pretty cool.

This idea is a good bit less warm and fuzzy than the DC voucher program, but I think it could have a great deal of power in any event and it could send a message to Washington which needs to be sent if we’re going to preserve any semblance of free-market capitalism or international competitiveness in this country.

Namely, this – as you may have noticed, GM is about to become Government Motors. Following the administration’s sacking of CEO Rick Wagoner last month, GM’s latest proposal to avoid the bankruptcy it so richly needs and deserves is to give the federal government a 50 percent ownership stake and the United Auto Workers a 39 percent share of its company. The new program would absolutely slaughter the company’s bondholders, who in a proper bankruptcy would have first priority in being made whole or at least a say in what’s to be done, and they’re naturally crying foul – but a good many of those bondholders made the mistake of accepting TARP funds, and as such they are in the position of having the arm put on them by Big Brother.

If you deduce from all this that GM is now an abjectly horrible mess, we agree. Nothing can save this company short of a good, hard reorganization in bankruptcy which eliminates costs it simply cannot further sustain, but despite Obama’s pleas to the effect that he’s not interested in running that company it’s obvious he has designs otherwise.

In other words, this company is no longer a private-sector entity in any honest definition of the term.

We all know how this will end. GM will make the cars the Beltway dorks – rather than the American people – want made, and short of jury-rigging the tax code so as to force the American people to buy them this will result in a moribund, rancid failed enterprise unable to market its products and inevitably drinking deeply from an increasingly empty public trough.

We know how this will end, but the politicians who are driving us to it are blind to economic reality. What they do understand is votes. So let’s speak to them in language they do understand.

It’s probably not logistically possible to stage a new round of tea parties to protest the government takeover of GM (I’m not even going to discuss the Chrysler situation, but we all know at this point that if it survives it will likely be forced into some sort of government serfdom as well), but it’s not too late to send another message.

Why not a petition for all to see, in which the undersigned pledge that we will NEVER buy a car made by a company the federal government owns? What effect would it have if the American people spoke in no uncertain terms to deny a profitable market share to such an enterprise? Could such a takeover proceed under such circumstances?

(cross-posted at www.thehayride.com)