Washington prepares to nationalize the auto industry. The Wall Street Journal, demonstrating its keen ability for understating matters, says “The auto industry would undergo a restructuring process akin to bankruptcy reorganization, only with fewer rigors and with the government, not a judge, in control, and with many associated political complications.”
Political complications like bans on challenging new emission laws, no matter how onerous, or unions demands for board participation, etc. No one pretends that $15 billion will fix the the Big Three so we’re just beginning the process. Socialism failed to save the British steel mills, coal mines or auto industry and will fail here – but we’ll have ransomed our future before that reality sinks in.
Update: Well, perhaps I’m wrong – The New York Times seems to think it’s a lousy idea, too!
It all sounds perilously close to a word that no one in Mr. Obama’s camp wants to be caught uttering: nationalization.
Not since Harry Truman seized America’s steel mills in 1952 rather than allow a strike to imperil the conduct of the Korean War has Washington toyed with nationalization, or its functional equivalent, on this kind of scale. Mr. Obama may be thinking what Mr. Truman told his staff: “The president has the power to keep the country from going to hell.” (TheSupreme Court thought differently and forced Mr. Truman to relinquish control.)
The fact that there is so little protest in the air now — certainly less than Mr. Truman heard — reflects the desperation of the moment. But it is a strategy fraught with risks.
The first, of course, is the one the president-elect himself highlighted. Government’s record as a corporate manager is miserable, which is why the world has been on a three-decade-long privatization kick, turning national railroads, national airlines and national defense industries into private companies.
The second risk is that if the effort fails, and the American car companies collapse or are auctioned off in pieces to foreign competitors, taxpayers may lose the billions about to be spent.
And the third risk — one barely discussed so far — is that in trying to save the nation’s carmakers, the United States is violating at least the spirit of what it has preached around the world for two decades. The United States has demanded that nations treat American companies on their soil the same way they treat their home-grown industries, a concept called “national treatment.”
Of course, even a blind squirrel finds the occasional acorn ….