Tuesday, May 19, 2009
Government as car maker...
The moment we have all been waiting for has finally arrived. The United States government is officially in the car business. The same government that has given us the wildly successful post office; public education; American-Indian reservations; the War on Poverty, drugs and terrorism; public housing; forest management and many other highlights in the history of things that don't work, is now poised to give us our future automobiles.
Let's take a moment to review how we got here.
First, the 'Big Three' American companies failed miserably to compete with Japaneses car companies from the early 70's on. With the help of the economically illiterate United Autoworkers union, American companies saw declining market shares, rising costs and inferior quality come home to roost.
Facing bankruptcy, two of the three run to Washington, D.C. to beg for the plundered tax dollars of people who drive Toyotas, Hondas, Hyundais and other cars that are not made by GM or Chrysler. Our government proceeds to hand them billions of dollars and a threat to come up with a better model in a couple of months (to replace what took decades to doom them) or face the pressure of federal intrusions into how to get us from point A to B on the highway.
Of course the beggars from Detroit failed to deliver on this impossible task and the Obama Administration, a.k.a, the "Superior Ones" ostensibly nationalized GM by taking a 50% ownership stake and condemned Chrysler be the certain death of being largely run by that world-class company, Fiat.
Now that the federal government has huge ownership stakes in both companies, the feds get to tell the companies what to do. Naturally, this means the companies will be forced to do things that have not even one remote connection to anything that the laws of supply and demand would insist they do.
In a free market, absent bailouts and takeovers by government, GM and Chrysler would be wise to file for bankruptcy, close every plant in unproductive, union states and move to places like Texas, Florida and other places where you can hire workers for far less than the absurd amounts the UAW workers get. Then, as smaller, leaner companies, GM and Chrysler could go about competing with Toyota and Honda on a playing field that Adam Smith would love.
Instead, on May 18th, GM CEO, Barack Obama announced that he will be determining what course of action the car companies will now face. HE has decided that all cars should get 30% better fuel economy than they do now by the year 2016. HE has demanded that this take place so that we can all fight global warming in smaller, lighter, less roomy death traps on wheels.
Take a look at the data for yourself. When government forces our cars to get better mileage, highway deaths increase.
These cars will cost more (Obama predicts $600 more) and will not have the same power or capacity that our vehicles do at this time.
Our marketplace used to tell car companies very clearly that size and power is what we want most. Now tree huggers and "Save the Polar Bears" activists will tell us what to drive.
With any luck we will get to drive cars like the East German Trabant (see photo) This is the car that gave Communism a bad name. Powered by a two-stroke pollution generator that maxed out at an ear-splitting 18 hp, the Trabant was a hollow lie of a car constructed of recycled worthlessness (actually, the body was made of a fiberglass-like Duroplast, reinforced with recycled fibers like cotton and wood). A virtual antique when it was designed in the 1950s, the Trabant was East Germany's answer to the VW Beetle — a "people's car," as if the people didn't have enough to worry about. Trabants smoked like an Iraqi oil fire, when they ran at all, and often lacked even the most basic of amenities, like brake lights or turn signals.
Road trip anyone???