Quote:
Originally Posted by wind_magic
Here are the only theories I can come up with for why the administration and the Congress are currently trying to ride roughshod over bond holders in favor of GM's UAW workers.
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You are probably right on more than one score here.
I came to your point 4 and thought “that’s of course what the Swedes did to GM over Saab, only they didn’t bother to pretend and fart around first. The same day GM whined, “we need government help,” the minister came out and said “not on your nelly” (words to that effect), and the government has not wavered from the stance since.
Which is when I thought of something…
I wonder if Americans have come to misunderstand the system they have created? For all the talk, it seems to me that both Republicans and Democrats promote a system that is anti-market.
I am often surprised at the Democrats’ readiness to grant benefits without the necessary counterbalances to prevent abuse, and at the Republicans’ never-ending pork barreling for industry sectors. Over the years, we have observed subsidies or market protection for the steel industry, the vehicle industry, wheat, beef exports – the list is a whole lot longer. Even development aid is a local industry affair neatly disguised as “bilateral aid”: I recall the Tanzanian minister telling us how they took millions from the USA only on condition they spend it on Ford tractors, “which we have no facilities for repairing or fuelling, so they rust away.”
As for Democrats, they are even more protectionist. Common to both seems to be a view that American industry cannot compete without a leg-up.
So, it hardly surprises that GM is such a hornet’s nest. The government in this “free market” economy would still like to help the workers, the bond holders, the lenders, and of course the auto industry. Where in all this did “free market” enter the equation? Absent is the cut and dried view both you and PZbeer (and I) have of a failing company: that it ought to fail, it is meant to, and someone will suffer.
The one country in EU that attempted a protective measure during this crisis was France, wanting to give money to Peugot on condition it went only to factories in France. The French got a lot of pepper for it – this is simply not the accepted way of doing things. I see the current US administration toying with a concept of “Buy American” – and we don’t hear an awful lot of angry voices over that. Do you or don’t you want a free market?