Elkhorn Creek Lodge

GM; An Abortion Known As “Industrial Policy”

Posted in uncategorized by Eugene Podrazik on May 30, 2009

“What’s good for GM is good….”  You know the rest.  The irony, is that GM and the US government has been bound at the hip for nearly three quarters of a century.  It started with the Wagner National Labor Relations act.  And, ended there.  For this company, in particular, became the vehicle that has been the government-mandated honey pot for the UAW.  

Indeed, with governmental help, GM evolved into a Social Security agency and a Medicare agency; with three out of every four UAW members drawing down on retirement benefits.  It a wonder that GM had any time to make cars.  This charade led to GM’s current business model of manufacturing large cars, SUV’s and trucks to generate the profits needed to subsidize the lush benefits that the UAW now enjoys.  Moreover, the CAFE standards were originally conceived to keep small car production in the US, thereby guaranteeing more UAW jobs.  So, those same said large cars and trucks also had to subsidize small car production as well.

This delicate homeostasis succeeded until energy became politicized by the environmentalists.  The act of pumping gas became political statement.  And, scientific inquiry about global weather patterns became similarly politicized.  

An energy policy designed to create scarcity, to drive up the price of gas, succeeded with four dollar per gallon gas last summer.  And, GM’s balancing act collapsed.  Not that any of this ever had to happen.  Because, most Americans like large cars.  We are, generally, a country that has a very low population density.  Ours is under 100 persons per square mile as opposed to populations densities in the hundreds if not over a thousand persons per square foot in Europe or Asia.  We therefore, on average travel farther for a given trip.  And, given these longer trips will want to carry more.  Hence the need for a bigger car.

Energy policy that abandoned the flat-earth mythology of global-warming (sorry, climate change), could easily provide the necessary gas, well under two dollars per gallon, by off-shore drilling.  Extraction of shale-oil.  Nuclear power.  The energy densities of these sources outstrip all other sources.  It is only because of energy production politicization that “alternative” power sources are remotely economically viable. 

Yes, there are people who live in very congested inner-city areas who would want a very small car.  But, the free market is more than capable of providing such cars.  But, in America, we engage in gigantic carbon-footprint activities such as having, instead of aborting, children and that, with our low population density makes for a demand for larger vehicles–like Obama’s Tahoe.  But, how about letting individuals choose what they want to drive?  I guess not in Obama’s command economy.

So, welcome to the brave new world of econo-boxes.  Mandated by Obama’s acolytes in the EPA and department of transportation.  Actually, the brave-old world of econo-boxes.  Once again, thanks to Reagan and the prosperity his policies engendered, we have a whole generation of people who simply forgot or never experienced the world of the 70’s.  Remember the le Car?  Or, the Gremlin, Pinto or Maverick?  How about the incredibly sexy 1974 Mustang?  Or, a car so bad, it became the official wheels of Wayne’s World–the AMC Pacer.

And, so, the picture at the top of this post is supposed to represent the new, Obama controlled GM (h.t., Drudge).  What we have is a state controlled car company capable of being as innovative as the old Soviet block manufacturers that gave us the Lada or the Trabant.  GM is going to require permanent government subsidies to give away these cars.  Because, for those with some pocket change left after Obama’s systematic looting via taxes, you aren’t going to lay down one penny more on something out of GM.  We’ll also know when some lowly bureaucrat is out an about since they’ll be driving one of those ridiculous GM econo-boxes.  The GSA is going to become the official buyer of all products, GM.  How else to prop up the US Treasury’s investment in GM.

Since, Obama’s GM will keep the Cadillac nameplate, we’ll also be producing the Zil.  So, our solons will be able to look down upon all of us unwashed rubes as they are whisked to their oh so important governmental meetings.  We could even, like in the old Soviet Union, have special lanes reserved for the limousines of the high party big-shots.  

In a way, it’s fitting.  Keep  GM. Because GM has been the province of the government and the UAW since 1935.  Produce exactly the kind of cars that the enviro’s get wet dreams over.  And, keep the UAW as an object lesson, with three retirees for every worker on the line, for the future of Medicare and Social Security.

 

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