Government Motors

I wanted to write this a few days ago, particularly after I read the comments regarding how the administration plans to deal with the automobile industry. Now many of you know my approach to economics as well as my position of this crisis. First I think that there needs to be a restructuring of our financial system, that we can’t keep on giving folks money to waste, that we need to produce something the rest of the world will purchase and that we should let the free markets deal with this – let businesses fail.


Now if you have not read his remarks, I suggest you do so with the quickness. From what I have discerned, after several readings is frightening. It seems that what his auto task force is undertaking is in direct conflict with the constitution of the United States, specifically the Taking Clause of the Fifth Amendment. Now I know that many of us dumb Americans aint read and don’t know the constitution, and likely couldn’t tell the difference between the fifth or sixth amendment if asked. The Fifth Amendment provides that private property shall not be taken without just compensation and includes a provision known as the Takings Clause, which states that "private property [shall not] be taken for public use, without just compensation." This only applies to actions by the federal government. The Takings Clause imposes two requirements on government in order to exercise this power. The first being that the property to be acquired must be "for public use," and second, that the government must pay "just compensation" to the owner of the property that is seized.


It sounds to me that the government is getting in the automobile industry. I mean the programs of the government have never worked better than those in a free market. This is something that I would expect from a communist country like China or a socialist country like France – but not here. First, there is the issue with Chrysler, in which we are about to PAY a foreign company $6 billion plus (not an American company) Fiat “ to transfer its cutting-edge technology to Chrysler and, after working closely with my team, has committed to building new fuel-efficient cars and engines here in America.” In addition, there is the statement “the United States government will stand behind your warrantee". And check this, like an investment bank, the Federal government announced it will now begin to practice automobile financing via the “the Treasury Department's Consumer and Business Lending Initiative”...and “auto finance companies to increase the flow of credit to both consumers and dealers.”

Then there is the statement that my tax money (recovery act funds) will be used “to purchase government cars” and go out as “other federal fleet purchases as well.” How can the government get new cars with my money when I can’t afford to do such? Why not save our money so we don’t have to borrow anymore from Asia. This is not tightening ones belt buckle. Add to that that the IRS, as if it doesn’t have enough stuff to do regulating our tax dollars will become the governments automobile marketing firm. In his own words the President stated: “Third, the IRS is today launching a campaign to alert consumers of a new tax benefit for auto purchases made between Feb 16 and the end of this year -- if you buy a car anytime this year, you may be able to deduct the cost of any sales and excise taxes. This provision could save families hundreds of dollars and lead to as many as 100,000 new car sales". The current Secretary of the Treasury can’t even get Deputy’s in house to support his efforts, but we can create another wasted job at the federal level for a Director of Recovery for Auto Communities and Workers.


I do not know about you, but this is a very slippery slope. First no one in the administration is brave enough to tell us how many more bailout they are going to provide to big business or how much money they will continue to give and borrow abroad. Not to mention it will only be a matter of time before a couple of the corporations getting bailout loot will fail anyway.The sad thing is that I always her “now let me say this clearly” and “we have to do this”. We do not have to do jack. What happened to bankruptcy, at least that way nobody will have to loose their jobs while undergoing restructuring. I believe that business owners should either work their way out of their economic problems or fail for that equals a free market to me. But then again what do I know, it sounds live General motors’ don’t exist no more and has now become Government Motors.