 GM, Amtrak
and an Increasingly Fascist America
Rep. Ron Paul
Texas Straight Talk
Jun 8, 2009
Last week, General Motors finally
declared bankruptcy. Many in government thought $20 billion in
taxpayer dollars would save the company, but as predicted, it
only postponed the inevitable. The government will dump another
$30 billion into GM and take a 60 percent controlling interest
for it. Public officials are now involving themselves in tactical
business decisions such as where GM's headquarters should move
and what kind of cars it will build.
The promise that this is temporary
and will eventually be profitable is supposed to ease the American
people into accepting this arrangement, but it is of little comfort
to those who remember similar promises when the American taxpayers
bought Amtrak. After three years, government was supposed to
be out of the passenger rail business. 40 years and billions
of dollars later, the government is still operating Amtrak at
a loss, despite the fact that they have created a monopoly by
making it illegal to compete with Amtrak. Imagine what they can
now do to what is left of the great American auto industry!
In a truly free market, GM
would get your money one way and one way only - by selling you
a car you want, at a price you are willing to pay. Instead, the
government is giving public money to a private company in spite
of the market signals it has been sending. Throwing money at
GM does not stop it from being an engine of wealth destruction;
on the contrary, it simply gives it more wealth to destroy.
Had it been allowed to fail
naturally, the profitable pieces of GM would have been bought
up and put to good use by now. The laid off employees would likely
have found new jobs and all that capital would be in private
hands, reinvested in companies that produce products demanded
by consumers. Instead, we are all poorer now.
Political pressure, rather
than the rule of law, is deciding how to divide up the remains
of GM. The bondholders had billions in retirement savings invested
in the company, and though they were entitled to nearly three
times as much as the United Auto Workers, the bondholders were
left with just a 10 percent stake compared to the union's 17.5
percent stake. For their 60 percent stake, taxpayers have a future
of constant bailouts to look forward to.
Comingling public control of
private business is known as fascism. While today's politicians
may feel emboldened with all their new power, history will only
repeat itself as all this collapses on itself. It is the height
of hubris for bureaucrats and politicians to attempt to control
the market and the freewill of the American people. In the end,
the market always wins out. Maybe one day future generations
will wise up and allow free markets to function and thrive without
the albatross of government around its neck. For now, it looks
like those in charge have not learned the lessons of the past,
and have doomed us to repeat those mistakes once again.
Jun 8, 2009
Rep. Ron Paul
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