The American People Know More Than a “Task Force”
The L.A. Times reports on Obama’s continuing efforts to turn his administration into the next failed group of Soviet-style central economic planners:
[Obama’s] automotive task force concluded, for example, that the Chevy Volt, the electric car being developed by General Motors Corp., would be too expensive to survive in the marketplace. It declared that GM was still relying too much on high-margin trucks and SUVs, and that Chrysler’s best hope was to merge with a foreign automaker, Fiat.
Judgments like those are usually rendered in corporate boardrooms or announced in quarterly reports. But this time they were coming directly from the White House.
You see, Obama believes that he knows what the American people want — and that he knows far better than the American people themselves know:
Some participants in the deliberations, speaking on the condition of anonymity because of White House restrictions on allowing people to speak freely, said the task force operated from an underlying belief that consumers would ultimately be attracted to more fuel-efficient cars despite current data showing many such cars languishing on dealer lots.
The arrogance of this is breathtaking, for it assumes that a “task force” knows more about what Americans want than . . . well, Americans.
As I did earlier, I will turn to Thomas Sowell to explain the problem:
Under both capitalism and socialism, the scarcity of knowledge [regarding what consumers want] is the same, but the way these different economies deal with it can be quite different. The problem is not simply with the overall scarcity of knowledge, but also with the fact that this knowledge is often fragmented into tiny bits and pieces, the totality of which is not known to anybody.
Except maybe a task force!
Sowell explains how allocation of resources through pricing is a dynamic process that combines the information stemming from millions of individual pricing decisions. In other words, the market brings to bear the collective knowledge of an entire country. This information simply cannot possibly be tracked by a centralized authority with any accuracy. Accordingly, “[a] society in which only members of a hereditary aristocracy, a military junta, or a ruling party can make major decisions is a society that has thrown away much of the knowledge, insights, and talents of most of its people.”
Sowell makes clear that to rely on centralized planning is to place the arrogance of a few over the superior knowledge of many:
A society which can tap all kinds of talents from all kinds of sources has obvious advantages over societies in which only the talents of a preselected few are allowed to determine its destiny.
No economic system can depend on the continuing wisdom of its existing leaders.
Obama doesn’t understand this. He thinks he knows more than you do.
Just as my readers collectively know far more than I do, the American people as a collective know more than any one President, or any one task force. To substitute the “wisdom” of a small group of intelligentsia for the wisdom of the people as a whole is hubris on a cosmic scale — and is setting us up for a horrible and painful downfall.
By the way, consulting with an economist or two might have helped the L.A. Times convey these concepts to its readers. Instead, the issue is portrayed in a partisan fashion: Republicans say Obama’s actions are bad, and Democrats say they’re good.
But it’s not a partisan issue. It’s an American issue.
We’re watching our very way of life come crashing down around our heads.
Apparently some don’t realize this. We must sound the alarm.
…consumers would ultimately be attracted to more fuel-efficient cars…
The MSM and liberal know-it-alls have been spewing this line since the 1974 oil shock 35 years ago. Yes, “ultimately” never arrived despite the passage of 35 years, many business cycles and many oil price fluctuations.
Today, liberals could buy 100% of GM for $1.1 billion. Chump change for Soros and Hollywood liberals. Why don’t they buy GM and show conservatives how to run a international company, dominated by unions and build “fuel efficient” cars to their hearts delight? Why not? Because they would fall flat on their condescending asses. That’s why not.
Perfect Sense (0922fa) — 4/1/2009 @ 1:28 am“I have a dream” – Martin Luther King Jr.
“I have a task force” – Barack H. Obama
daleyrocks (5d22c0) — 4/1/2009 @ 4:11 amthey should just build the tata nano.
imdw (d868d2) — 4/1/2009 @ 5:11 am” . . .speaking on the condition of anonymity because of White House restrictions on allowing people to speak freely . . .”
Ah, the Obama Administration’s much-hyped transparency.
Brother Bradley J. Fikes, C.O.R. (0ea407) — 4/1/2009 @ 6:29 amThe arrogance of this is breathtaking, for it assumes that a “task force” knows more about what Americans want than . . . well, Americans.
Dude. Once again. Could you make some sort of effort to think clearly about this and not lapse into slogans when those slogans are empirically inaccurate?
Stay with me here. I think you can get this.
Question: How do large companies decide on corporate strategy?
Do they submit such strategies to a referendum voted on by the American People? Or, do they, say, open their strategy up to bidding? In an auction, or on a stock exchange? You know, let the “free market” decide their corporate strategy?
Answer: Of course not. See, Tom Sowell’s theories here are full of, essentially, voodoo ideology masquerading as knowledge. Truth is, if you let 100 million people vote on that kind of issue who had no real stake in it, they would be too lazy to do the research. They would vote based on all the BS and lazy info they had from the media. They would vote badly.
Question: So who makes decisions about GM’s corporate strategy?
Answer: Not “the people”. Actually such decisions are made by a small group of insiders. You know, the vice president in charge of strategy, his boss, the CEO. Maybe some outside consultants. A f*cking task force, pardon my french.
Question: Where does this “millions of people all making their own decisions magic” come in?
Answer: The decision to purchase the good, or not. And really, that’s the end of it.
Question Is that being touched here?
Answer: No.
We’ll have the chance to see whether this task force makes good recommendations over the next 10-20 years that help GM get fiscally stronger and grow, or not. But if you attempt to make empirical predictions that economic decisions made by “small groups” of people are consistently going to be dumber than those made by large groups, get ready to be frequently embarrassed.
Or is it not just any small group of people that are inherently incapable of making good economic decisions in your theory? Is it only a specific group, like addle-brained Democratic politicians?
glasnost (4ed100) — 4/1/2009 @ 6:37 amAgain, when you make predictions based on this ingrained bias, you open yourself up to getting pwned.
Here’s today’s learning opportunity on this topic:
http://mitiq.mit.edu/iciq/PDF/ASSESSING%20INFORMATION%20QUALITY%20USING%20PREDICTION%20MARKETS.pdf
Neat little primer on prediction market failure in action.
glasnost (4ed100) — 4/1/2009 @ 6:51 amHey, at least the task force got the bit about the Volt being too expensive right.
Soronel Haetir (a3f11b) — 4/1/2009 @ 6:52 amglasnost,
Wow. You really don’t understand what Sowell is saying, do you?
Patterico (cc3b34) — 4/1/2009 @ 7:12 amI caught a chunk of Rush’s show yesterday. His take is that TOTUS will help make the small cars more “attractive” by helping the gas prices to rise back to $4.00 a gallon.
Red County Pete (4b39c9) — 4/1/2009 @ 7:16 amRemember, last summer, TOTUS didn’t have a problem with $4.00 gasoline, but with how quickly it got there. With a bunch of lands now closed to oil exploration (covered in the Omnibus Lands bill) and the resistance to offshore drilling, we could see that price in the not too distant future.
Not sure how I’m supposed to get a half dozen 2 x 6 x 12′ boards the 40 home in a Tata Nano, though.
Dude. Once again. Could you make some sort of effort to think clearly about this and not lapse into slogans when those slogans are empirically inaccurate?
Anyone who starts a sentence with “Dude” should be immediately tuned out. Nevertheless, I will point out for the others here who ARE capable of understanding economics, companies try to determine what their customers want. Then they produce it and hope it sells. Those board members that the fool is so confident of will see their company stand or fail based on the accuracy of their predictions. They cannot force people to buy the cars they make.
Government operates in a completely different way. It didn’t always. Lincoln wanted to settle the west and the Homestead Act was passed. The rest was up to the homesteaders. Succeeding presidents wanted to connect the country from east to west and so railroad companies were given tracts of land along the right of way. They built the railroads and some of them went broke but the railroads are still there.
Now, Obama would insist that government do all this itself. The people don’t know their own best interests. Fool that he is, he will obligate the next two generations to pay for his failures.
Mike K (2cf494) — 4/1/2009 @ 7:20 amWe’ll have the chance to see whether this task force makes good recommendations over the next 10-20 years
Glasshead certainly sounds as if he’s never worked in the private sector, unless you count that job as fry cook.
Dmac (49b16c) — 4/1/2009 @ 7:25 amGlasshead, why don’t you give us ONE example of where a command – and – control economy has worked? What’s that? You don’t believe in sourcing your inanity with objective sourcing?
Dmac (49b16c) — 4/1/2009 @ 7:26 amThe market has decided that GM should be bankrupt. GM went to the government, cap in hand, and asked the government for a handout to help GM avoid bankruptcy – a bankruptcy which it brought on itself with its poor decisionmaking. The government has agreed to help, but for a price: the price is that the government gets to call the shots.
I don’t see this as a systemic threat; it’s not as if the government is running around telling companies which haven’t asked for help what to do. (OK, maybe in the financial industry it is, but it’s not as a general rule). It’s ordering around a company which sought government aid to avoid bankruptcy … and doesn’t the guy who is paying for that aid get to call the shots regarding how it is used?
aphrael (12fba5) — 4/1/2009 @ 7:46 amThe question is whether the government should be in the automotive business, Aphrael.
In my opinion, Doofus 43 answered it the wrong way, and McCain … a worn-out old man whom we should not have picked to run for President in the first place but we found that out too late.
nk (b0c40d) — 4/1/2009 @ 7:52 amNK: ok, I can see an argument by which the right answer was to tell the auto companies to go away, and to just let them go bankrupt.
I think the medium-term effects of that on some parts of the country would have been devastating, and I don’t think it’s unreasonable for the government to be concerned enough about those effects to ameliorate them.
But I don’t think this is the same thing as a Soviet (or Nazi, for that matter)-style command economy. It’s control *of specific companies which have asked for help*, not of the industrial sector in general.
aphrael (12fba5) — 4/1/2009 @ 7:55 amAphrael, let’s consider a hypothetical. Suppose The Los Angeles Times were on the verge of bankruptcy. And suppose it went to the government, hat in hand, for a handout to help it avoid bankruptcy. And now suppose that the government agreed, but under the condition that Uncle Sam gets to call the shots for the newspaper, fires the editorial board, and installs its own staff. That wouldn’t be at all dangerous, would it?
This may or may not be a systemic threat. But it is a VERY dangerous precedent when the government starts running what once were private enterprises.
Steverino (69d941) — 4/1/2009 @ 7:57 amI actually agree with Aphrael’s point about the reality of taxpayer monies coming with the appropriate strings attached – AIG had next to no preconditions with it’s aid, and here we stand with a firm that should’ve been allowed to fail immediately. However, I’m not comfortable with this gang being in charge, and their mewlings about what kind of cars GM “should” be making is quite telling.
Dmac (49b16c) — 4/1/2009 @ 7:59 amBut do you see where this could easily lead? Suppose the government, now running GM, decides that the way to turn a profit is to bankrupt its competitors…so it sells the cars at a huge loss and destroys the market for Ford and Chrysler.
Now Ford and Chrysler ask for help…and Uncle Sam takes them over.
Have you ever wondered why there isn’t a private company that handles delivery of first class mail?
Steverino (69d941) — 4/1/2009 @ 8:00 amI think the medium-term effects of that on some parts of the country would have been devastating, and I don’t think it’s unreasonable for the government to be concerned enough about those effects to ameliorate them.
I’m with you, there. We are not Bangladesh. But the government solution should be a government method. Extended unemployment benefits, a new Army base, a federal prison, a contract for purple Presidential limousines with gold-plated hub-spoke wheels …? 😉
nk (b0c40d) — 4/1/2009 @ 8:06 amThe government should have no say in deciding which companies succeed or fail.
This is why bailouts are problematic. They give governemnt control over things they have no business controlling.
Dr. K (eca563) — 4/1/2009 @ 8:12 amSadly, a lot of our countrymen just want to see some action. It doesn’t really matter what action that is. Doing nothing is the obvious choice, but these folks don’t want to see that, and the administration is more than happy to oblige.
Attila (Pillage Idiot) (b6cc49) — 4/1/2009 @ 8:37 amYou could make the case that the Chrysler bail – out in the 80’s set the precedent.
Dmac (49b16c) — 4/1/2009 @ 8:41 amthe task force operated from an underlying belief that consumers would ultimately be attracted to more fuel-efficient cars despite current data showing many such cars languishing on dealer lots.
There’s not a whole lot of reading comprehension there.
The “large group” you’re referring to is the market. If the market decides not to purchase the cars, then ipso facto the “small group” decision was dumb. The fact that people aren’t buying the small cars IS the economic decision of the “large group”. Are you really that stupid?
Also, what’s an “empirical prediction”?
Gerald A (adb85a) — 4/1/2009 @ 8:44 amWhat, and put their own money at risk? When they can have the same control and push off all the risk onto the taxpayers?
LarryD (243b3d) — 4/1/2009 @ 9:52 am“…the next 10-20 years that help GM…”
GM has survived for 100 years (est. 1908) dealing with various levels of governmental requirements, but will not survive another 10 years with governmental control.
AD - RtR/OS (5021d1) — 4/1/2009 @ 10:20 amSay Hello, to the American Leyland!
Anyone who truly understands Dr. Sowell’s views would not refer to them as “voodoo ideology masquerading as knowledge”.
Yes, a handful of people at GM make decisions on what they think people want, but in a truly free market, if they’re wrong, they lose money and either fail or learn their lesson the hard way. That’s the market’s way of filtering out things people don’t want. The government, on the other hand, isn’t letting that happen. When government screws up, they just get more funding.
Furthermore, a government is beholden to political and special interests. When the government announces what the people want in a car, it’s more likely to be what some environmentalists want or what some other industry lobbyists want.
As Dr. Sowell says, the worst thing to do is put decisions in the hands of those not accountable for the results of their decisions. If government officials are wrong about what people want, at least they’re still getting their support and contributions from unions, special interests, and industry lobbyists.
Chris M (b1110a) — 4/1/2009 @ 11:08 amMy understanding is that it is against the law. I’m not sure how the government was able to turn the power to estable post offices and post roads into a monopoly, but there you go. Lysander Spooner argued that the post monopoly is unconstitutional but I’m not aware of anyone actually litigating it.
There are however some 4th amendment benefits to having postal delivery be a government function.
Soronel Haetir (a3f11b) — 4/1/2009 @ 11:13 amI don’t know what the law is regarding delivery of mail but I do know it is against federal law to put something in someone’s mail box if you’re not an employee of USPS. As a “yoot” I delivered newspapers. I was warned never to put the newspaper into a mailbox, despite a customer’s wishes. As a young adult, I delivered door-to-door advertisement bags. I was told at that time placing them in mail boxes was a federal crime. The homeowner isn’t exactly the owner of the mailbox the homeowner bought. The fed owns it and the ability to use it, or somesuch thing.
John Hitchcock (fb941d) — 4/1/2009 @ 11:18 amThat was my point, that Uncle Sam made it illegal for any entity other that the Post Office to handle first-class mail. Just wait until it makes it illegal for any entity other than GM to make automobiles.
As far as post roads go, that’s actually in the Constitution.
Steverino (69d941) — 4/1/2009 @ 11:22 ammail boxes…
AD - RtR/OS (5021d1) — 4/1/2009 @ 11:34 amMy lawn-maintenance person habitually puts his monthly bill in the mail-box.
If the mail-person finds it, it is thrown on the ground.
Once, a local police officer delivered a regulatory license to me and left it in the mailbox,
which was discovered by me on the ground courtesy of the mail-person.
Rules are rules, in the world of the petty bureaucrat.
And now suppose that the government agreed, but under the condition that Uncle Sam gets to call the shots for the newspaper, fires the editorial board, and installs its own staff.
I’m torn on this. On the one hand, this is just like the government operating its own newspaper, which I don’t think is per se banned (imagine that it were the State of California doing this, to dispose of the fact that it’s hard to shove operating a newspaper into the commerce clause).
And yet there’s something problematic to me about the government telling me what to think; I don’t like government-sponsored propoganda in general so I’m unlikely to like it in this form.
But it is a VERY dangerous precedent when the government starts running what once were private enterprises.
Note, though, it’s been done before: the government effectively took over the railroads in 1917, for example. But previous exercises of such power have been in a national emergency, and I guess my questions would be: (a) is this a national emergency, or something which has the potential to develop into a national emergency? and (b) are the steps the government taking limited in scope so as to deal with the emergency, and not broad enough to suggest a desire to take over the economy?
I think the answer to (a) is that it has the potential to become an emergency, and I think the answer to (b) is “yes, so far” … so I find claims like “We’re watching our very way of life come crashing down around our heads” to be alarmist. Going too far down this road might have that effect; stepping to where we are now will not.
aphrael (e0cdc9) — 4/1/2009 @ 11:58 amGM has survived for 100 years (est. 1908) dealing with various levels of governmental requirements, but will not survive another 10 years with governmental control.
GM’s leadership is saying that it won’t survive until the end of this year without government assistance, that if it goes into bankruptcy it will be dismantled.
That’s not because of the government control that’s being imposed now; it’s because GM has consistently over the course of decades failed to get its house in financial order, while the market has continued to punish it for that failure.
aphrael (e0cdc9) — 4/1/2009 @ 12:01 pmAh, the old riddle.
There is a 4-way stop. At the intersection are:
1) A police car with lights and sirens.
2) A fire truck with lights and sirens.
3) An ambulance with lights and sirens.
4) A postal vehicle.
Which has the right of way?
Answer: The postal vehicle.
John Hitchcock (fb941d) — 4/1/2009 @ 12:04 pmBut do you see where this could easily lead? Suppose the government, now running GM, decides that the way to turn a profit is to bankrupt its competitors…so it sells the cars at a huge loss and destroys the market for Ford and Chrysler.
Now Ford and Chrysler ask for help…and Uncle Sam takes them over.
It could lead there. In general, I’d support rules against companies (in industries with high barriers to entry) selling product at a loss in order to bankrupt their competitors and then increase the price to levels beyond the market clearing price; I think that’s a fair use of antitrust law. And I see no reason why the government should be exempt from such rules.
But assuming that such rules aren’t in place, I agree that the potential is a problem, and that the government’s operation of the company should be watched carefully to make sure it’s not doing that. Ideally, if we’re going to control the company for any extended period of time, it should be run as an independent agency (like, say, the Fed) with Congress having control over the amount of government money extended, and with limited power to issue debt (because being able to issue debt in the government’s name binds the government too much).
Something I find interesting in this discussion, actually, is that on some level the issue here and the issue with the executive’s power to name people enemy combatants is the same — both are incredibly dangerous powers with the potential for horrible misuse. But for one, my instinctive reaction is to say something like “the state cannot be allowed to have this power without strict controls, because it could be misused” and the reaction of conservatives was something like “the state must have this power”; and for the other, it seems like my instinctive reaction and the reaction of conservatives has inverted.
From which I guess my next question should be: what kind of controls can be placed on this power to make it less dangerous and less susceptible to misuse?
aphrael (e0cdc9) — 4/1/2009 @ 12:08 pmAphrael, I view you as an honest debater so I hope you don’t take this response as a flippant response. I honestly believe much of the rank-and-file liberal opinion is based on a lack of understanding of the Constitution.
Enemies of the State and enemies of the Constitution are one and the same, and the executive branch must always protect against enemies of the Constitution. That is entirely different than taking over private industry, which is patently unconstitutional.
I suggest a reading of the Constitution and a reading of Congressman Davey Crocket, both of which can be found on viewing my blog (shameless plug, nonetheless) to get a firmer grasp on what made this country great.
John Hitchcock (fb941d) — 4/1/2009 @ 12:17 pmI thought glasnost’s assertion that the free market does not “vote” on GM’s strategies pretty hilarious actually. The free market votes on a corporation’s strategies every day that the stock market is open where that corporation’s stock is offered.
SPQR (72771e) — 4/1/2009 @ 12:18 pmJohn Hitchock, I get the point that enemies of the state and enemies of the constitution are the same, and that the executive branch must protect against enemies of the constitution; my objection has always been that a process which allows the executive to declare someone to be an enemy of the state, and provides no external review of that declaration, is incredibly dangerous. The good news is that the process we currently have provides external review.
As for taking over private industry being unconstitutional – that’s a debate which is as old as the Republic; I suspect that Alexander Hamilton would have had no problem with it.
aphrael (e0cdc9) — 4/1/2009 @ 12:20 pmSPQR, the free market “votes” on days the stock market is closed, as well. Every purchase is a “vote.” If nobody buys a certain product, the market voted to make that product vanish. And it happens every year. Hundreds of privately-owned companies go belly-up every year because the market “voted” not to support them. 😉
John Hitchcock (fb941d) — 4/1/2009 @ 12:26 pmI don’t think one auto maker going bankrupt is an emergency. People’s cars will still run, they’ll still need a source for spare parts, and other makers will be there to serve future market demands.
The problem isn’t that the government has gone too far as of right now; rather, the problem is that the government has taken a huge step in the wrong direction, and nobody is alarmed by it.
There’s a big problem with this. First, the government routinely exempts itself from the rules it creates. Second, there is absolutely nothing to stop it from changing the rules in the future.
I’ll take the absolutist’s position and state that this should never be allowed to happen. That way, the temptation for misuse won’t appear.
Steverino (69d941) — 4/1/2009 @ 12:34 pmDoes the Sherman Anti-Trust Act apply to GSE’s?
AD - RtR/OS (5021d1) — 4/1/2009 @ 12:37 pmI’m staggered by comments 5 and 6. Dude, put down the bong! Though for effot I’m going with a 10.
Question: If new consumer product launches are unsuccesful 9 out of 10 times, what is O’s target?
Answer: Dude, O’s team is going for 10 out of 10. Perfection.
EBJ (2fd7f7) — 4/1/2009 @ 2:04 pmI’m staggered by comments 5 and 6. Dude, put down the bong! Though for presentation I’m giving a 10.
Question: If new consumer product launches are unsuccesful 9 out of 10 times, what is O’s target?
Answer: Dude, O’s team is going for 10 out of 10. Perfection.
EBJ (2fd7f7) — 4/1/2009 @ 2:04 pmShould not the government bail them out? Why should only Chrysler and GM be bailed out?
Michael Ejercito (7c44bf) — 4/1/2009 @ 3:00 pmMichael Ejercito: I think the argument is that Chrysler and GM’s size make them a reasonable target, because the dislocation caused if they go under would be enormous.
aphrael (e0cdc9) — 4/1/2009 @ 3:20 pmWell, we heard similar reasoning behind the rescue of AIG, except insert “utilitarian” for “enormous size.”
Dmac (49b16c) — 4/1/2009 @ 3:27 pmActually, a better case can be made, and was, for AIG over GM because AIG and the banks encompass the entire economy, Detroit is just Detroit.
AD - RtR/OS (5021d1) — 4/1/2009 @ 4:46 pmJohn Hitchcock – Enemies of the State and enemies of the Constitution are one and the same, and the executive branch must always protect against enemies of the Constitution.
I am with Aphrael on this one regarding constitutional protections. I would simply ask:
What if the enemy of the Constitution becomes the Executive Branch?
Apogee (f4320c) — 4/1/2009 @ 5:00 pmSorry – invert that – What if the Executive Branch becomes an enemy of the Constitution.
Apogee (f4320c) — 4/1/2009 @ 5:01 pmSee: 19 April 1775!
AD - RtR/OS (5021d1) — 4/1/2009 @ 5:20 pmActually, a better case can be made, and was
I agree, but Paulson put in scant oversight of the bailout money, hence they flushed it all down the sinkhole.
Dmac (49b16c) — 4/1/2009 @ 5:30 pmAs usual the ObaM-ORONS are incapable of understanding simple concepts.
Here is where the private and government will differ. Obama has set himself up as GM and since he relies on the UAW he will never allow those people to be fired. His asinine environ-nut filled administration will launch a billion dollar “green” car which will cost a ton per unit to make and is completely out of the market in terms of cost and design. So first Obama will give special tax-payer paid incentives to buy these Obama-mobiles which will nevertheless not be able to compete in the market.(Taxpayers will be paying for a portion of everyone of these POS sold) Next Obama and his cronies will PASS LEGISLATION aimed at leveling the “unfair” advantage of the private sector. i.e. He will use the full-force of the government to promote his cars. On top of that will be requirements for states and municipalities to purchase these Obama-mobiles for car fleets, etc.
Obama knows nothing about running a auto company but he intends on using the force of government to make this “succeed”. What the consumer can expect is that the cost of a car will rise dramatically as Obama and his communists impose restrictions of every aspect of the manufacturing of a car. Uniformed payroll costs(every company will have to match what Obama is giving to his UAW supporters, limits on types and features in cars which might make competitors more attractive, and anything else that they can think of to cripple the private companies.
Only an idiot would consider buying an Obama-mobile.
LogicalSC (3dfff0) — 4/1/2009 @ 6:53 pm“Well, we heard similar reasoning behind the rescue of AIG, except insert “utilitarian” for “enormous size.””
With AIG, we’re really rescuing hte counterparties and people who have insurance policies with them.
imdw (017d51) — 4/1/2009 @ 7:16 pmThe height of all this absurdity and idiocy is that the guy now in the White House is in love with policies that will ratchet up the price of oil, which, in turn, will negatively impact the economy in general, the auto industry in particular. And so GM and Chrysler’s future looks even bleaker than its mismanaged present.
Thanks in part to big phonies like Obama — who has previously admitted to favoring SUVs (which is one big reason GM allowed itself in the first place to became far too dependent on a particular make and buyer of vehicle) — I see nothing but detours and roadblocks (along with a lot of flat tires) for the auto industry, foreign and certainly domestic, in the next several years.
Mark (411533) — 4/1/2009 @ 7:34 pmThanks to Obama Motors, we’ll all be singing this song.
Brother Bradley J. Fikes, C.O.R. (0ea407) — 4/1/2009 @ 7:38 pmBro, even the Serbs finally gave up on the Yugo.
But, we might be able to get in on the Lada gravytrain?
AD - RtR/OS (5021d1) — 4/1/2009 @ 7:44 pmTrabis.
Brother Bradley J. Fikes, C.O.R. (0ea407) — 4/1/2009 @ 7:50 pmPerfect for NY’s! They don’t like cars anyway.
AD - RtR/OS (5021d1) — 4/1/2009 @ 7:55 pmPersonally, I can’t wait for the announcement of which Chrysler plant will start assembling Alfa’s.
[…] by Wellsy on April 1, 2009 A piece in the L.A. Times today (heads up from Patterico) examined the greatly expanded control of the auto industry by Obama’s task force. As the […]
Obama’s auto task force grabs greater control over industry « Wellsy’s World (186bd9) — 4/1/2009 @ 8:01 pmThis is as close to a financial thread I could see going on this evening, so forgive me for dropping this heads up here. But my study hall reading tonight included this nice little explanation of the implications regarding switching the valuations of the infamous ‘toxic assets’ from market to model. So just in case anyone needs a wee primer on what this accounting change could produce…I know it helped me get a handle on what to expect should the FASB capitulate to the financial goliaths via congressional pressure.
mark-to-market switched to mark-to-model
allan (9c40e6) — 4/1/2009 @ 8:01 pmAllan, I think the issue about mark-to-market is the suspension of the rule for regulatory purposes. The banks have been smashed by the rule with respect to capital requirements. That’s why they are not lending. They are hoarding capital to eet the mark-to-market rules.
it’s because GM has consistently over the course of decades failed to get its house in financial order, while the market has continued to punish it for that failure.
Getting “its house in order” is the matter on union contracts. They cannot be broken except in BK. That’s why GM needs to go to BK and why Obama has been trying to avoid it. The UAW is killing GM and Chrysler. Their response is to elect Obama and EFCA.
We’ll see what happens and that may tell us how much of an ideologue Obama is.
This is what corporatism looks like. You know, like Mussolini ?
Mike K (2cf494) — 4/1/2009 @ 9:42 pmYes, but even AMTRAK is beyond the capabilities of Obamalini!
AD - RtR/OS (5021d1) — 4/1/2009 @ 10:22 pmThe government, on the other hand, isn’t letting that happen. When government screws up, they just get more funding.
They’re still letting it happen; no one passed a law requiring Americans to buy GM cars. If the task force is dumb, and their suggestions slash orders fail to make GM attractive, their cars will still not be bought, and they’ll run out of money again.
My beef with this post was Patterico’s “logic” that because a small group of government task force folks were making the recommendations, they were inherently worse than GM’s own processes. GM’s private processes have been empirically demonstrated to suck. Hard. The task force will be subject to the same feedback mechanisms, and the statement that its ideas are a priori stupid and wrong because it’s Teh Government is an ideologically inspired statement.
glasnost (4ed100) — 4/2/2009 @ 11:13 amGlasnost, can you defeat Davey Crockett?
John Hitchcock (fb941d) — 4/2/2009 @ 11:21 amJohn – Anything less flammable than a bale of dry straw soaked in gasoline is a bit too much competition for glasnost. Sometimes it struggles with the concept of the match, but eventually, it always managed to burn that strawperson to the ground.
JD (8918e5) — 4/2/2009 @ 11:41 amNonsense, JD, glasnost showed a very convincing defeat over the mound of straw he had built.
SPQR (72771e) — 4/2/2009 @ 11:52 amIn glas’ world, transparancy is insured by having no glazing in the window opening; and his moderation and open-mindedness is marked by his brains falling out of his head.
AD - RtR/OS (e0c6d9) — 4/2/2009 @ 11:59 amGlasnost could not have missed the point more if it tried. The point was not that the task force knows better than GM, the point was that the task force does not know better what the public wants than the public.
JD (8918e5) — 4/2/2009 @ 12:26 pmWell, and this is just a maybe, maybe since GM knows so much about marketing and making cars the American people want (Hah!), they should ask for our money.
They’re incompetent boobs who want my money. They have to make changes to get it. Sort of, you know, like any big time financial transaction.
Oh, how I long for the grand ol’ days of Hank “give it away for free” Paulson and George the MBA president. Those are some people who understand you can crew with civil liberties, but you don’t screw with rich, white guys and their sense of entitlement.
We’ll get it, guy. We let you guys run the county and the rest of the peasants should butt out and hand over the government to the oligarchy. Everything will work so well then.
Hell, it’s a virtual tea party over here.
timb (a83d56) — 4/2/2009 @ 12:35 pmAh, but it knows what the public should want,
AD - RtR/OS (e0c6d9) — 4/2/2009 @ 12:35 pmwhich is something that our betters always must lead us to since we are so stupid.
Otherwise, without such enlightened leadership, we would just keep buying those ridiculous SUV’s that allow us to tote the entire family somewhere on vacation, with the boat or travel trailer hitched to the rear. And then, why are we buying so much stuff at the home center just because we have the ability to transport it home?
This conspicuous consumption has just got to stop –
I mean, who in America needs a swing-set for their daughter’s anyhow?
In fact, many of this silly task force’s recommendations will undermine GM’s future profitability, not enhance it. But because liberal ideology trumps reality, they just pretend that the world rotates around them.
SPQR (72771e) — 4/2/2009 @ 12:56 pmGM sells a LOT of cars. So, clearly, some people want them. In fact, GM sold about as many cars and trucks in 2007 as Toyota.
http://www.autoblog.com/2008/01/23/gm-releases-global-sales-numbers-for-2007-in-dead-heat-with-toy/
But nice try.
Steverino (69d941) — 4/2/2009 @ 1:03 pmYeah, trust me, I’m not about to buy the roller skate with a windshield the Dems want me to buy.
John Hitchcock (fb941d) — 4/2/2009 @ 1:05 pmDoes anyone know what timmah was arguuing about, or was that just another rant, where he somehow managed to insinuate that we are RACISTS ?!
JD (8918e5) — 4/2/2009 @ 1:29 pmGM’s private processes have been empirically demonstrated to suck. Hard.
You can’t buy economic analysis this rich in detail, ladies and gentlemen.
Dmac (49b16c) — 4/2/2009 @ 1:32 pmFrom neoneocon
Brilliant. These people are not even trying to hide their complete incompetence, are they?
JD (21b45f) — 4/2/2009 @ 3:22 pm