Watching the NBA finals, you couldn’t help but notice the new GM commercial. What has American business come to? We have a company that owes people and companies billions of dollars and is now in bankruptcy. The majority of this company is now owned by us the taxpayers. Does anyone find it ironic that of the billions of dollars owed to their creditors over 160 million is owed to ad agencies? I wonder what ad agency is now doing these commercials and getting paid while the other ones are likely never going to get paid. That’s right; it’s the White House doing these commercials with their own camera crew. My frustration does not lie in the fact that GM is in bankruptcy but the fact that this answer could have been arrived at much sooner. The government should not be in the business of running companies. When the government decides to run a business they always have constituencies to look after, which is the antithesis to capitalism. Remember the definition of capitalism according to Webster is, “an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.”
In this case, the union workers and retirees were taken care of at the expense of the bondholders (some of whom were other retirees). All though the government says that it does not want to have their hands in the day to day operations of GM, we all know that will not happen. The US government is going to have a seat on the board. This tells me that the government will definitely be giving direction to what cars will be made. If this is the case, we will soon have cars that none of us want.
My impression of this administration was that it was going to seek to be “fair”. Their actions with GM leave no impression of fairness. At the end of the day, the administration will seek to keep their constituents happy regardless of the business sense that these policies make. Just as sports reveal character, so does the current policy of the White House. I might add that this policy is lacking in character.