Ask the Best and Brightest: Have the Feds Done Too Much or Too Little for Detroit?

Robert Farago
by Robert Farago

Diners at the Motown bailout banquet are back at their tables, their plates groaning under the weight of federal “investment.” They’re just now beginning to tuck in, spending your hard-earned money on various plans to achieve what Oliver called “that full-up feeling.” The reluctant chefs (70 percent of American opposed GM and Chrysler’s second bailout) are showing signs of nausea. While the anti-GM/Chrysler bailout backlash has not been statistically analyzed (I wonder why), anecdotal evidence suggests that at least a small percentage of car buyers are shunning the welfare queens’ products as a protest against their government “affiliation.” Meanwhile, political analysts on both sides of the spectrum continue to debate the elections in Maryland and New Jersey, wondering if voters are rejecting the Obama administration’s heavy-handed economic intervention in the U.S. economy. Did I say “heavy-handed?” Plenty of pundits believe that not only did Uncle Sam have every right to nationalize GM and Chrysler, but they didn’t go far enough. What’s that all about?

There is a line of thought that says the twenty-five (now four) member Presidential Task Force on Automobiles should have laid waste to GM’s entire management structure—not just its failed CEO—and then rolled-up its sleeves and taken charge of GM. Process, products, marketing, everything. They consider the GM bailout, and the “assistance” provided broke-ass banks, timid half measures. Government Motors should BE government motors. For a while, anyway.

[Chrysler gets a pass on this hands-on meme, thanks to blind faith in its new Italian overlord, the charismatic Fiat boss Sergio Marchionne.]

Here’s what New York Times columnist Paul Krugman had to say on the meta-level:

The World War II battle of Anzio was a classic example of the perils of being too cautious. Allied forces landed far behind enemy lines, catching their opponents by surprise. Instead of following up on this advantage, however, the American commander hunkered down in his beachhead — and soon found himself penned in by German forces on the surrounding hills, suffering heavy casualties.

The parallel with current economic policy runs as follows: early this year, President Obama came into office with a strong mandate and proclaimed the need to take bold action on the economy. His actual actions, however, were cautious rather than bold. They were enough to pull the economy back from the brink, but not enough to bring unemployment down.

Thus the stimulus bill fell far short of what many economists — including some in the administration itself — considered appropriate. According to The New Yorker, Christina Romer, the chairwoman of the president’s Council of Economic Advisers, estimated that a package of more than $1.2 trillion was justified.

Meanwhile, the administration balked at proposals to put large amounts of additional capital into banks, which would probably have required temporary nationalization of the weakest institutions. Instead, it turned to a strategy of benign neglect — basically, hoping that the banks could earn their way back to financial health.

For me, this is some scary-ass shit. The glass isn’t half full; it isn’t even a quarter full. It’s virtually empty! And fill it we must! Failure isn’t a sign that we were misguided. It’s a sign that we were too timid! We must re-double our efforts and INCREASE federal intrusion.

Do you agree? Should the feds have taken full control of GM and Chrysler? If the automakers face cash starvation yet again, should we up our “investment”? And if not, at what point do you kick them out of the cafe?

As for the Battle of Anzio, commanders who fail to achieve an objective tend to blame limited resources rather than their own lack of skill and resolve. Winston Churchill (and military historian John Keegan) laid the blame for Anzio’s failure on the timidity of Major General John P. Lucas. The larger question remains: should the allies have attacked there in the first place?

Robert Farago
Robert Farago

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  • Rpn453 Rpn453 on Nov 09, 2009
    geeber : First, because their nationalized plans are less likely to spend lots of money on end-of-life care than the U.S. does. You need to take that up with the AARP, as any plan that will truly reduce costs must redistribute care from the elderly to the young. Good luck getting the AARP to sign off on that one. The simple fact is that we spend a ton of money on people during the last six months of their lives without really extending their life span. Interesting. Do you have any numbers on that? I ask because, here in Canada, pretty much every elderly person I've known who has passed away was kept alive longer than I believe they should have. Maybe we do it cheaper, but we're still spending the money for medical treatment of people who will never recover.
  • Geeber Geeber on Nov 09, 2009
    PeteMoran: I respectfully suggest that exposes you as arguing from a prejudice; “It’s pointless, just let those people rot”. I respectfully suggest that you are dismissing my example because of your own prejudices - which, let's face it, people on both sides of the ideological spectrum do. I bring up this example to show that problems go much deeper than the lack of availability of health care. Here, the health care (in the form of dental check-ups and needed work) was being provided for free. The families could not say that they skipped the appointments because they couldn't afford to keep them. The problem here was families not placing a priority on getting the child to the dentist. Nationalizing health care isn't going to change these attitudes. What's needed is educational efforts that will change people's attitudes towards their health. Step one is making them realize that it is THEIR RESPONSIBILITY to develop good health habits for both themselves and their children. While government can have a role in this effort, simply nationalizing health care and providing it at no cost to citizens won't solve the problem. The care here was ALREADY provided for free. Providing care at no cost, or bashing insurance companies, or calling Rush Limbaugh a right-wing gasbag, isn't going to solve this problem. If you want to say that certain segments of American society maintain bad health habits and then expect someone else to pick up the costs resulting from said habits (and these bad habits also make our health statistics look worse), you will get no argument from me. Resolving this, however, will require one to move beyond blaming this all on Rush Limbaugh, insurance carriers, the Republican party, George W. Bush, etc. rpn453: If I recall correctly, for large numbers of people in the U.S., around 80 percent of the total amount of health care expenses for their ENTIRE LIVES is spent during their last six weeks on earth. The care doesn't result in an extended life span, but doctors are afraid to risk a malpractice suit, so they do everything possible to keep the patient alive. I also know that my 90-year-old German aunt was being charged a co-payment by the German national system for her care up until she died in 2004; meanwhile, my 96-year-old American grandmother is covered by private insurance, and the carrier was willing to pay for a knee replacement for her at virtually no cost to her! She decided that she didn't want it. One way to scare the elderly, of course, is to start suggesting that we take a hard look at these costs (which gives the Sarah Palins of the world the opening to screech about "death panels"). Of course, the response from the other side is to say that nothing with change (as President Obama quickly did), so we get the worst of both worlds.
  • 3-On-The-Tree Aja8888 I expected that issue with my F150 starting at 52,000mi. luckily I had an extended warranty and it saved me almost $8,000. No more Fords for me, only Toyota.
  • Lou_BC I saw a news article on this got a different read on it. Ford wants to increase production of HD trucks AND develop hybrid and EV variants of the SuperDuty. They aren't scaling back EV production. Just building more HD's and EV variants of HD's .
  • Lou_BC Backing up accidents are one of the most common causes of low speed accidents. You'd think sensors and cameras would help.
  • Jpolicke Jaguar started making cars that were dead ringers for Kia Optimas, but less reliable. They now look like everything and nothing; certainly nothing to aspire to.
  • ToolGuy I would answer, but the question might change again, and then where would we be? Also, bran... wheat bran? Bran Castle? The coliva served at Bran Castle is made with wheat, I checked. (Some places use rice, because collectivism does not work.)