Gains are Private, Debt is Public

As if I needed an economic crisis to fuel my disinterest in, and dislike of, American cars, GM and Ford's new payment protection plan, a la not having to pay for your car if you lose your job, makes me vomity sick. So, the products that the free market have shown to be mechanically inferior and overall unappealing are being subsidized by the taxpayer. I think the initial negotiation for the bailout was arcane enough that, although it was generally distasteful, didn't really resonate with the average taxpayer in a transparent way. Like most people, I just thought, "oh, that is pretty bogus, but I drive a Toyota." Well, this load of political and corporate smoke and mirrors is now shedding its disguise and is having a coming out party in the form of our tax dollars paying for some one's piece of crap Chevy Malibu. No, this is not intended as a personal diatribe against American cars, but as invective against nonsensical policies that engender morally hazardous human behavior. I don't see why American cars can't be great. They were once. Why can't they be again? Why, can these federally subsidized companies offer $500 for up to 9 payments in the case of GM, and $700/month for a year after purchase of a new vehicle in the case of Ford? The American taxpayer is going to be paying for quite a few new cars over the next couple of years, not to mention the mortgages that we will be paying for. (Subsidize is a very nice word I think. Paying is perhaps a bit more enlightening and direct.) 

I recently heard a man on NPR who bemoaned the current state of the American auto executives. The man hearkened back to a brighter day when Lee Iacocca was able to charm the American public back into buying good American cars. Well, newsflash, Iacocca's biggest accomplishment was probably when he marched onto an ethically loose Capitol Hill and boozed and schmoozed his way into a multi-billion dollar bailout for his effectively bankrupt company back in 1979. They have been benefiting from the vapors ever since. My point is two-fold: 1) if we want people to buy American cars, let's encourage them to buy them, and not subsidize, I mean pay for, them publically; and 2) in order for people to buy American cars, they have to want to buy American cars. Let's not just "restructure". Let's revamp. Rebuild. Rethink. etc. etc. etc. Gut the companies. Let them go bankrupt. Let people feel responsible. If companies that provide a needed service fold, that service will not be lost in the mess, it will simply be provided by a more innovative or efficient entity. If that is a restructured version of the original firm then that is fine. If it is a new firm, that is fine as well. It's not like we haven't been down this road before. How many times do we hear about JD Rockefeller's stellar timber and railroading companies, or Leland Stanford's trading empire? Things change. I am ok with that. Let's stop using private capital to publically pay off debt.