{"id":85,"date":"2009-05-25T16:45:53","date_gmt":"2009-05-25T21:45:53","guid":{"rendered":"http:\/\/jparnell.com\/blog\/?p=85"},"modified":"2009-05-25T16:45:53","modified_gmt":"2009-05-25T21:45:53","slug":"rebirth-of-the-us-auto-industry","status":"publish","type":"post","link":"https:\/\/battle4liberty.com\/?p=85","title":{"rendered":"Rebirth of the U.S. Auto Industry"},"content":{"rendered":"

Chrysler and GM will rise again. I don\u2019t make many predictions, but I\u2019m comfortable with this one. <\/span>But can this public-private partnership\u00a0model really work? Is it possible for the U.S. government to run–more or less–a large manufacturer at a profit? The answer is yes, but you can pay dearly for their profits. <\/span><\/p>\n

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Consider that Washington is already providing these companies with an endless stream of taxpayer capital other carmakers cannot access. Government funds are also being provided to their finance wings to make it easier for their customers to purchase cars. Research grants and incentives indirectly fund the development of vehicles that will be required in Obama\u2019s new \u201cgreen economy.\u201d Revised CAFE standards and other regulations will add production costs to all carmakers, while Chrysler and GM (and perhaps Ford) will have some of these offset by government subsidies. Government-run healthcare could transfer a huge industry liability to taxpayers as well. In addition, Obama\u2019s weak dollar policy, which is supposed to promote exports by making U.S. goods cheaper abroad (a debatable proposition), will raise the cost of imports. In other words, steps have already been taken to make it easier for Chrysler and GM to compete in future years, while making it more costly for Toyota, Honda, and others. And if all else fails, another stimulus for federal and even state governments to \u201cupdate their fleets\u201d by purchasing new vehicles from the Big 3 will prop them up even further. <\/span><\/p>\n

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If you are a conservative doubting the efficiency of government-manipulated industry, you are right. But many of the long-term bailout costs will be hidden under the guise of economic stimulus, research incentives, environmentalism, and the like. The survival of GM and Chrysler will not mean that \u201cbusiness-government partnerships\u201d work well, but instead that our government has both the power and audacity to spend enough of our money to keep them afloat. I expect socialists and some moderates to praise Obama\u2019s business acumen when U.S. auto production appears to turnaround some time before the 2012 elections. I also expect to see a Heritage Foundation study that calculates precisely how much we spent\u2014DIRECTLY AND INDIRECTLY\u2014to save the carmakers and the UAW.<\/span><\/p>\n

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So here\u2019s a word to the wise.\u00a0When others laud the current administration for shaking things up at GM and Chrysler, don\u2019t get caught predicting their demise.\u00a0I suggest that you\u00a0forecast their success. I can’t tell you what they will look like in a few years, but the political stakes are simply too high for the Obama administration to allow\u00a0the perception of\u00a0failure.\u00a0Just don’t forget to keep track of what it’s really going to cost us when we’re done.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Chrysler and GM will rise again. I don\u2019t make many predictions, but I\u2019m comfortable with this one. But can this public-private partnership\u00a0model really work? Is it possible for the U.S. government to run–more or less–a large manufacturer at a profit? The answer is yes, but you can pay dearly for their profits. \u00a0 Consider that […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/posts\/85"}],"collection":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=85"}],"version-history":[{"count":0,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/posts\/85\/revisions"}],"wp:attachment":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=85"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=85"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=85"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}