President Obama annouces the bankruptcy filing of General Motors today at the White House. The restructuring plan for the auto giant includes a 60% stake in the company by the government of the United States.
Barack Obama, a man who’s never held an executive position, has essentially become the Chief Executive Office of the world’s largest bank/mortgage lender/automaker.
The question now, besides the location of the section of the Constitution that gives the federal government the power to take ownership interests in private enterprises, is how far the government will go to keep GM afloat if the $50 billion already committed isn’t enough. Making cars is one thing; selling 10 million a year to stay profitable is another.
And not to unfairly criticize hard-working government employees, but the simple fact is that the government is not bound by the same rules of profit and loss as the rest of us. Inefficiency does not hold the same consequences for government — or for GSEs like Fannie Mae, Freddie Mac, and now Chrysler and GM — as it does for the local small business.
This is a bad idea, an albatross that’s going to be around our necks for a long time.