As a rock-ribbed conservative, I seldom agree with the socialist
president of Venezuela. But it happened last week.
"Hey, Obama has just nationalized nothing more and nothing less
than General Motors. Comrade Obama!" Hugo Chavez declared during
one of his customary rants on state TV. He added that if he and
Cuba's Fidel Castro weren't "careful," they might "end up to
Chavez has nationalized most of his country's economy. That's
helped turn the country into a "Repressed" economy in Heritage's
annual Index of Economic Freedom. Crime, corruption, inflation
and food scarcities prevail in Venezuela, even though the country
has taken in hundreds of billions in oil revenues in recent
That's because nationalization discourages private investment
and innovation. So Chavez's oil production is likely to plummet,
just as Mexico's has under a nationalist protection scheme.
Americans have reason to be concerned as they watch our
government go down a similar road with one of our critical
industries: automobile manufacturing. On June 1, the federal
government announced GM would enter bankruptcy protection. But not
Under a plan crafted by the Obama administration, Washington
will own some 70 percent of the new GM, while the United Auto
Workers union will own almost 20 percent. The federal government
will pour another $30 billion into GM on top of the $20 billion
taxpayers have already shelled out.
Still, "What I have no interest in doing is running GM,"
President Obama announced on June 1. "GM will be run by a private
board of directors and management team with a track record in
American manufacturing that reflects a commitment to innovation and
Sounds good. But it's difficult to believe, especially when
Obama recently fired GM's CEO and hand-picked his successor.
Obama has also put 31-year-old Brian Deese, a "a not-quite
graduate of Yale Law School," as The New York Times puts it, in
charge of restructuring GM. Deese "had never set foot in an
automotive assembly plant until he took on his nearly unseen role
in remaking the American automotive industry," the newspaper
Meanwhile, the new mayor of Detroit recently spoke with Obama
and told reporters afterward that the president supports keeping GM
headquarters in that city. If Obama insists he has "no interest" in
running GM, why is he so involved in the day-to-day operations of
Obama also says, "The federal government will refrain from
exercising its rights as a shareholder in all but the most
fundamental corporate decisions." That's a tough sell, too. Even
before the government owned most of GM and much of Chrysler (the
second Big Three automaker Washington recently guided through a
special bankruptcy), it was involved in designing cars.
Last month Obama declared that automakers must reach a fleet
average 35.5 miles per gallon by 2016. To accomplish that would
require a comprehensive makeover of the entire automotive industry
-- both domestic and foreign. After all, as USA Today pointed out,
only 11 cars manufactured today meet that standard.
But the federal government, as always, has a plan. EPA
Administrator Lisa Jackson has declared that, "What this country
needs is one single national road map that tells automakers ...
what kind of car it is they need to be designing and building."
In days gone by, that "road map" was the free market -- you and
me. Automakers built cars they thought people would want to buy. If
they were correct, sales were good. If they were incorrect, they
had to cancel product lines and return to the drawing board. It's
why Ford has made Mustangs for decades, but mothballed the Edsel
after only three years.
Government ownership has never worked overseas, and it won't
work here. Washington should get out of the automotive business as
swiftly as possible.
The recent European elections show the rest of the world is
edging away from statism. This is no time for America to lurch left
so it can keep company with outcasts like Cuba and Venezuela.
Feulner is president of The Heritage
First Appeared in the Indianapolis Star
As a rock-ribbed conservative, I seldom agree with the socialist president of Venezuela. But it happened last week.
Enterprise & Free Markets Initiative of the Leadership for America Campaign
Edwin J. Feulner, Ph.D.
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