Dan Neil Is Insane
When Jonathan Swift’s “A Modest Proposal” was first published, its sustained and unyielding irony lead more than a few to believe that the Irish scribe was actually advocating for cannibalism and infanticide. With the benefit of nearly 300 years, we can now recognize Swift’s detailed plan to serve the children of Ireland’s poor to their landlords as biting satire. Reading the LA Times‘ Dan Neil’s own “modest proposal,” one can’t help but go back and check for signs of self-aware irony (a far less scarce resource than it was in 1729). Sadly, there’s no much to go on, leading me to believe that Dan Neil actually wants the United States federal government to purchase General Motors. Or is there? After the usual litany of Big 3 woes, Neil “modestly proposes” as US takeover of GM. He then correctly anticipates the “gall of free-market ideology rising” in his readers, and he breaks down the case. And it’s off to irony no-mans land.
“Here are the benefits of nationalization,” as Neil sees them. First, GM is too big to fix with just $15b, and believe GM can “magically right-size in Chapter 11 is foolhardy.” In other words, it’s gonna cost a lot and it can’t be easily “right-sized.” Using these facts as arguments for nationalization gets my irony alarm ringing like it’s a Monday, but Neil keeps pushing. “Time is of the essence. Congress, writing a GM law and using federal power to abrogate contracts, could achieve at least some of these goals at a stroke.” Ah, so let’s open a huge can of federalism worms then, shall we. After all, the federal government can do whatever it wants, right?
After a brief recounting of GM’s alleged strong points (overseas ops, Volt, ‘vette), Neil then makes the bold claim that GM is competing with “quasi-nationalized” firms. Meaning? “If you consider the advantages the government of Japan has bestowed on Toyota, Nissan and Honda — in terms of healthcare and retirement benefits for its employees — the unevenness of the field is clear. The same goes for most European companies, and the rising rivals in China will enjoy similar state-subsidized advantages.” And though Neil is approaching a solid argument here, he fails to consider what it would be like for (say) Ford to compete with “GM-USA” as Neil terms his proposal. Word to Neil: if this is satire, go the whole nine yards and back the American Leyland line. It’s what Swift would have done.
The hardest part of analyzing Jonathan Swift’s satire is discovering exactly who and what he’s making fun of. Neil, on the other hand, is clearly motivated by green. Energy independence, that is. “Let’s avoid the euphemisms and have the courage of our supercharged Keynesian convictions,” writes Neil, once again stimulating the flow of “free maket ideology gall.” “By nationalizing GM, we can aim the company’s astonishing resources at one of the biggest public-policy problems we have: oil. Restructured and refocused, GM could build green vehicles by the millions in a few years and still have the capacity to build gasoline- and diesel-powered pickups (which we’ll still need) … and maybe even some Corvettes on the side.” Or, we could look into extracting alternative fuel from babies. Just sayin’
More by Edward Niedermeyer
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@Lumburgh21: One other thing to consider is that the government doesn't like competitors, and having the coercive power of the state it can write the rules any way it wants to. They could subsidize purchases of their own cars by offering tax incentives for buying them, or even more directly by using tax money to pay for some or all of the production costs (lowering the cost and thus the purchase price artificially). They could make it a requirement that all new models designed by non-government automakers must be approved by a "sanctioning body" (made up of government bureaucrats, of course) before they can be produced - American Leyland models would always be rubber-stamped, of course. Since GM is really only good at making trucks, they could make it illegal for anyone else to make trucks for sale in the US. Some may say I'm being ridiculous, but what people forget about government-run enterprises is that they are owned and operated by the same entity that makes the rules by which everyone plays the game, and can thus rewrite those rules at any time. Indonesia did something like this at one time - taxes on vehicles not manufactured by the Indonesian state effectively doubled the price. This was the only way they could get the public to buy their crappy cars. There are many companies that have, or could develop, the capacity to deliver mail in the United States (UPS, Fed Ex, etc), but yet no one has. Why? Because the government has declared itself as the only entity allowed to deliver mail. It doesn't matter to the end user - as long as they get their mail in a reliable and timely fashion, who cares who delivers it? It matters a great deal to the many thousands of government employees who have a stake in how the mail is delivered now. In a free market system, the players have to compete against each other. When the government is also a player, they don't need to compete with anyone. All this is a long way of saying that just because the government would suck at making cars doesn't mean that other car makers will be better off for it.