Yesterday’s National Review posted an article by Larry Kudlow about what has happened to General Motors. He points out that the taxpayers now own General Motors, but that we will never get our money back. Mr. Kudlow points out:
“Instead of putting the failed car enterprise into
bankruptcysix months ago — where Carl Icahn or Wilbur Ross could have bought it — the Bush administration chose Bailout Nation. Under Team Obama, that bailout has morphed into full-scale government ownership. Twenty billion dollars of TARP money is already invested in GM, with another $50 billion on the way. And that number could easily double unless GM car sales miraculously climb back to 14 million this year. That’s highly unlikely, with car sales now hovering around 9 million a year.”
The article points out that with the government running General Motors (the government has had no experience running a car company), the extreme environmentalists will pressure the company to make ‘green’ cars which most Americans won’t buy. However, if you enact energy policies that bring the price of gasoline back up to nearly $5 a gallon, people may buy these cars. That is what I see the Obama Administration moving toward. They have blocked all drilling of domestic oil, and they really don’t have a solid alternative energy to fuel our cars and industries. We are heading into a period of severe lifestyle changes for the average American–and they will not be positive changes.
Larry Kudlow also points out some things from an interview he did with Dick Cheney::
“Cheney was very critical of Obama’s big-government spending-and-borrowing policies, too, telling me that there are only two ways out: inflating the money supply or big tax increases. He doesn’t like either. Yes, Cheney believes Obama has taken Bailout Nation and government stimulus way beyond anything the Bushies ever contemplated. Nevertheless, the damage is done.
“Cheney recalled Bush’s having said that “we have to suspend free-market capitalism in order to save free-market capitalism.” So the big question is this: How long before we resurrect free-market capitalism, and how much damage will current policies do in the meantime?
“I won’t lose my faith in this country’s long-term future. But the issue of how much damage we sustain before returning to the policies of free-market economic growth is very much on my mind.”
I totally agree.