Government Motors

I believe everyone, including President Obama, would agree that it would be better if the United States government was not involved in the auto industry. The notion of 60% of General Motors being owned and perhaps operated by the federal government is not a particularly happy thought. Yet, I also believe there are a number of points that one should consider before attacking this acquisition as some unspeakable socialist plot.

Let us begin with the reality that General Motors and Chrysler were both companies that were in the process of failing. Additionally, General Motors in particular is not just any company. I must confess that when I think of General Motors I think of Dinah Shore back in the 1950's, singing every night that we should "see the USA in our Chevrolet". For those who need to ask the question 'Who is Dinah Shore', I can only say that there is and has been a special relationship with our American Car companies and the notion of letting them collapse is not easy to accept. Two Presidents with very different points of view on almost every issue were in agreement that everything possible had to be done to retain our American automotive industry.

The recession has been real, and doing nothing did not seem to be a reasonable option. It is not just sentimentality that demanded action on General Motors. Clearly bankruptcy was imminent. The ramifications were also pretty clear. Thousands of auto workers would be out of jobs. Thousands more retirees would have likely lost their pensions. Car dealerships would close and more jobs would be lost. Suppliers to General Motors and Chrysler would be forced to shut down adding to the domino effect that would intensify and deepen the economic recession, perhaps even resulting in a depression.

Those who advocated doing nothing may have been tough minded, but it still seems irresponsible to have sat idly by while so many were suffering and to continue to advocate letting the free market determine the future. Some might say that the government's efforts have been a waste of time and money as both companies have wound up in bankruptcy anyway. No one, of course knows what the ultimate result will be, but I believe we may already be seeing some potential bright spots.

Allowing these companies to fall into bankruptcy would almost certainly have produced the drastic results mentioned earlier. The structured bankruptcies we have seen in Chrysler and that is just underway with General Motors seem to represent a very different process. Many dislike the government's intervention, but that intervention has produced a structure that essentially laid out exactly what would happen while the company was in bankruptcy. Some complain that the Union was given preferential treatment in the process, but the reality is that the company was going under and everyone had to take a hit and they did. It appears that Chrysler is just about to come out of a brief bankruptcy with a chance over time to be successful again. General Motors has already had some success in selling off the Hummer and Saturn. We can hope that their bankruptcy period may also go smoothly and we will again have a viable auto industry.

Many things can still go wrong. The recession itself can still produce many pitfalls ahead. I believe, however, that the greatest danger we have in this country today as far as progress is concerned is adhering to a rigid ideology of either the right or the left. For example, government intervention of any kind is always wrong. Such an attitude results in such questionable actions as the Governor of South Carolina refusing stimulus money even though it means teachers and other employees of his own state will lose their jobs. Another example would be an inability to see that government is the only entity that can and will spend money during the recession to attempt to get the economy moving again. At the other end of the spectrum it has been shown that raising taxes during a recession can also do damage. The times demand a pragmatic approach rather than an ideological one. President Obama and his team will not always make the right decisions, but I for one am glad we have a team in charge that is trying to find out what will work to make things better for the American People and moving to implement those programs. A certain amount of trial and error is going to be necessary during these difficult times, but working together I believe we can make this nation hum again.