"GM, Amtrak and an Increasingly Fascist America" by Ron Paul

[ThoughtCriminal]

GM, Amtrak and an Increasingly Fascist America

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.

[PisnNapalm]

Capitalism works if government will leave it alone.

There should have never been any bailouts. How many of you want to buy a car built by the new GM, Government Motors? Not I.

[Morel42]

Capitalism works if government will leave it alone.

There should have never been any bailouts. How many of you want to buy a car built by the new GM, Government Motors? Not I.

I own a GM car now.. Started it up and the new turbo (cost :1,600) that i've had for 3 weeks and 900 miles blows...

Is it under warranty? Yes. Do I want to use it for target practice?

YES.

Last time they refused to give me a loaner for warranty repair.. No wonder GM went under. Horrible service.

[crlovel]

I have almost always owned a GM auto. I own one right now. Never again.

[Berks_Iraq_Vet]

I own a Jeep. My wife used to own a Chevy and a Pontiac. Nothing but problems. The Pontiac (Grand Am) had all kinds of issues and was a TERRIBLE ride on the highway. She now owns a Jeep also. We both, as of now, plan on Jeeps again when the time comes. If Chrysler/Fiat screw with Jeep Brand, we are going Japanese.

[adymond]

I understand the political part of this, but I do not understand the attack on Amtrak. What was said here is true, but the government has poured much more money into other forms of transportation. My understanding is, if you add up ALL the money put into Amtrak since its inception in 1971, that total would not even come close to the money put into the federal highway system FOR ONE YEAR. If the US would have followed the European model for passenger railroads, AMTRAK (or whatever private system came out of it) would be in much better shape now then it actually is. Passenger trains will never make a profit, it is the nature of the business. But, to me, it is like Pennsylvania spending millions of dollars to promote tourism. Is it worth it..?? Apparently it is, but you could argue that money could be better spent elsewhere. We need to have passenger trains/commuter trains. Their failure would dump so much new traffic onto our highway system, it to would collapse. Just as we need to build our freight railroad system to take some truck traffic off our highways (or you could say, to a more efficient mode), we need to greatly expand our passenger/commuter rail systems to take some of the pressure off the highway and airline systems - all of which by the way, get government support - actually many, many times more than the railroads do.

Government buy-out of GM, and government support of Amtrak, are two different animals - right or wrong. One the country can do without (another company will take its place), the other the country cannot do without (due to the nature of railroading, another company cannot just takeover since Amtrak is mostly running on other railroad's right-of-ways - all of which was mandated by the government in the 70's).

Actually if you look into what the plan was for Amtrak it is exactly what we are hearing about the plan for GM. The government was going to come in and provide leadership and capital to help stabilize the rail industry. The plan was within three years to turn around and sell the rail systems for a profit. [Aside: That sounds sort of like the plan for the TARP funds and assets bought up with that money too doesn't it?]

Why is it that I keep hearing that rail systems will never make a profit? If the rails are so efficient why can they not make a profit? If the public is not willing to use a service for the price it can opperate at the service should cease to exist until a private entity can reduce costs. Governmental subsidation of ANY industry should NEVER happen. And I mean NEVER. If an airport can't turn a profit shut it down. If a railroad can't be profitable let it fail.

The roads are a different story IMO because they are paid for explicitly by tolls and taxes. Unfortunately those tolls and taxes that are supposed to go to the infrastructure are going to help subsidize things like Amtrak and SEPTA.

[RandomTask]

I have almost always owned a GM auto. I own one right now. Never again.

The fact that my inept stepfather was a GM employee for 35 years was enough to make me never buy their junk.

[TXDMERC73]

The fact that my inept stepfather was a GM employee for 35 years was enough to make me never buy their junk.

just wonderin why he said that after workin there for 35 years? did they make junk or was the parts they put in them junk? it was GM's own downfall for trying to save a buck to make a buck...they should have mad ethe cars a little slower and better then faster and like a plastic model car slappin all those parts on with glue..

[PocketProtector]

They shoulda took the union on rather than climb in bed with them. How do you go go chapter 11 when you sell millions of cars??

[camper]

I'll buy whatever is the most cost effective vehicle that works best for my family and affords me the most comfort. Be it GM, Chrysler, Ford, Fiat, Hyundai, Volvo, Mercedes, etc. I have never been brand loyal, because no vehicle I've owned has wowed me enough to make me a lifelong customer.

I will say, that if it's run by the governmnet I truly do not expect any GM vehicles to fall into that list of 'will consider' items when I decide to buy a new car/truck/suv. Based on their ineptitude, I'm sure their future lineup will be complied of girly man hybrid psuedo cars that will not meet my needs or expectations and will cost 2-3 times more than the same thing somewhere else.

camper