Ask Me Help Desk - One Step Closer.

After the stunning announcement Sunday of the Obama administrations firing of the chairman of GM are we now one step closer to total government take over of ALL private sector companies? Is the next step in governments plans for total control of our society and socialism?

Maybe Sen .Carl Levin will resign to assume control over GM . Obviously a top corporate exec is going to jump at the chance of running a company that they have no say in it's decisions. So a bureaucrat ;a pol. Will have to step forward.

Shareholders of GM stock now have a decision to make. They don't own the company so do they want to continue their investment ? I kind of doubt it. This should also be a lesson to all those banks that keep on coming to Washington with their hands out.

Friday they marched up the White House driveway demanding that the President back off his hate capitalism and anti-bank and wall street rhetoric .
He told them to control their wages and play by his rules or else.
Yesterday he demonstrated what or else means .
But a closer examination would show that Obama doesn't believe he has the power to take out one of the big bank execs... yet . That is why after initially going along and stoking the populist rage against AIG ,he backed down .

This is set up to be the issue of the week . President Obama will pronounce his vision for the auto companies this week .He wants them to do a product line makeover to produce small, fuel-efficient vehicles . This is a move that they are already undertaking ;but apparently not at a speed sufficient for the President who know so much about the industry.

GM chairman Rick Wagoner was the weakest link so he had to go. It did not matter that he had spent his life in the industry moving up through the ranks of the company. He had already taken many of the steps the President wants. It is not his fault that the demand side dropped and no one is buying cars. Under his watch ,GM made advances on a big risk in developing an all electric car. Something you would think the President would approve of.
I think Wagoner deserved better .

Bear in mind just how much Tax Dollars, YOUR money, these companies have had already and are asking for more.
I think it's more than reasonable for the Government to have some sort of overview in how they are run.
The question I want answered is when are they going to stop mucking about with AIG and finally announce it's NATIONALISATION?

Also why do Americans, in general, see Nationalisation as a BAD thing?
Remember how much of YOUR money has been invested in these PRIVATE companies, why should YOU have a saying in how they are run?

The same is true for the UK Banks that have had huge sums of money pumped into them to stop their collective collapse..

The bankruptcy structures are already in place to deal with failed companies. The mistake was in the bailout to begin with . AIG has many profitable divisions . Actually only the one that was based in London was a problem. It easily could've been restructured without the gvt.

As for nationalization ; our gvt screws up running the post office ,the rail road (AMTRACK ) ,the 1/3 part of the health care industry it already controls ,and just about anything else it get's it's hands on .
Government is good at breaking things .That is why the most efficient part of government is the military.

By the way ;you have hit on a national debate that is as old as the nation (nationalized banks ) . The founders squared off on this issue as early as the 2nd Washington term and by the election of 1800 it defined the political parties of the time.http://www.jmu.edu/madison/center/ma...power/bank.htm

I don't understand why everyone says bad things about the post office (besides the fact they are 5 billion in debt). I never wait in line. I have always gotten my mail. And Seriously Tom you tell me who else gets a letter from Philly to LA in a week for 42 cents.

I wish more companies ran like the post office.

You don't see a problem in getting a letter from Philly to LA for 42 cents when it costs you the same amt. for mailing to your next door neighbor ? Why don't they adopt the sensible zoning rates that private carriers use ?

The Post office is bleeding loss every year even in the face of massive gvt subsidy and is now threatening a reduction in service as it looks for ways to cuts costs . Still ;even though their goal is to reduce costs by $5.9 billion they would still be in the hole for $6 billion by 2010.
They want to shut down small and rural postoffices so the vaunted mail to all corners of the country has a questionable future.

The truth is that when faced with competition in the larger delivery services the USPS underperforms every time. The same would be true if they were obliged to compete in the open market in the mail carrier service.

Tom, is this more to do with how these services are managed rather than the fact they are nationalised?
After all the best companies in the world can be destroyed by top heavy, ineffectual management.. look at the car makers.

My question is, is Nationalisation such a bad thing?

Thanks . We pay a heavy price to receive a box full of junk mail each day.

I am in the process of utilizing e-mailing bills so I don't get killed with the postage. Bills arrive at their destination on the day intended ;not too early ;not too late ,no secondary handler to be concerned ;and with a minimum saved of between $5-$10 every month in postage .

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My question is, is Nationalisation such a bad thing?

I guess we should ask Hugo Chavez . What happens if GM became nationalized ? Let's look at British Leyland automobiles as an example .The government bought up and nationalized it and allowed it to drive its competition to bankruptcy .Then the company went down itself . Now the only car manufacturing in your country is by foreign companies.

What happens to Ford (which has refused bailouts ) when it has to compete against a company that isn't compelled to operate under the profit motive model ?

On the obverse we have a situation where HUNDREDs of Billions of Tax payers dollars are being pumped into a financial industry that has become greedy and bloated from it's own "successes"

Granted your example of British Leyland, but thus boiled down to top heavy and ineffectual management coupled with massive union intervention. The same issues never really disappeared when the Rover group emerged from the wreckage.

In a lot of ways GM, Chrysler and AIG are already Nationalised due to the vast funds employed. In fact AIG is more than whole owned by YOU the US tax payer.
How many MORE billions need to be given to AIG before this fact is realised.
They have already passed $180 BILLION to ONE private company alone!!

I fear the result ,although delayed ,remains the same... a restructuring and selling off the salvagable parts. That could've been accomplished without the tax payer taking a hit.

What I see with GM & Chrysler is the govt appointing the CEO and that will lead to a board of directors packed with union men and "greens".

What happens next?

Then they produce eco-friendly, butt ugly vehicles that no one will buy, except the greens, of course.

Then unless they stop the foreign companies from selling their products here, GM & Chrysler will go down the drain anyway.

Of course, the Socialists might do just that. East Germany only had one manufacturer of autos that I know of and everyone (who could afford to drive) drove a TRABANT.

You didn't get into it, you put it on. And it would run an astounding 45 mph when you could get it started.

I hope they will let me keep my Subaru. Hey, I saved GM some money when I got it.

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Originally Posted by Curlyben

Bear in mind just how much Tax Dollars, YOUR money, these companies have had already and are asking for more.
I think it's more than reasonable for the Government to have some sort of overview in how they are run.
The question I want answered is when are they going to stop mucking about with AIG and finally announce it's NATIONALISATION ?!

Also why do Americans, in general, see Nationalisation as a BAD thing ??
remember how much of YOUR money has been invested in these PRIVATE companies, why should YOU have a saying in how they are run ??

The same is true for the UK Banks that have had huge sums of money pumped into them to stop their collective collapse..

First off, the government should never be involved in businesses and how they are run. That means that the government should never have given the businesses any money. Which means that they should not have any say in businesses.

Second, as for why nationalization is bad... nationalization leads to government intervention. Government intervention in business usually results in using the business to push a political agenda. When the goal of a business is to push a political agenda rather that making money, that business usually ends up failing, losing lots of money and lots of jobs. An agenda of profitability results in efficiency. An agenda of politics results in massive inefficiency.

Let's take a look at a few examples of cases where the government has gotten involved in what ought to be free-market businesses.

Example #1 - The VA Medical System. THe VA medical system is a complete shambles. The VA hospitals have been cited as examples of massive waste, mismanagement and poor administration. They are also festering cesspools of germs and disease. They are stuck with 1980s technology and they are unable to accomplish their goal of taking care of the medical needs of veterans. Comparing the VA system with privately-run hospitals, you can see the difference between government-run medical facilities and private facilities, and it is a very stark difference.

Example #2 - The Influenza Vaccination. A few years back we had a shortage of flu vaccine. It occurred because during the Clinton Administration the government decided to get into the flu vaccine business. The government declared itself the sole purchaser of flu vaccine in the USA, to be distributed through government programs to health-care providers. In doing so, the government did two things: they froze the price that they would pay for flu vaccine, and they increased the amount of regulation that vaccine providers had to go through. Regulatory compliance costs money, and since the government froze the price of the product, the companies were unable to recoup their costs and were losing money. As a result, the number of vaccine manufacturers decreased from over 100 to about 3 in the USA. Those three were unable to provide enough vaccine for the needs of the country. Thus, we had a shortage and had to buy vaccine from foreign countries at massively higher pricing than normal. This is another case of the government getting involved in the market by trying to nationalize the vaccine industry, and it backfired terribly.

Example #3 - NASA. The National Aeronautics and Space Administration is one of only a handful of agencies in the world that have been involved in manned space flight. There are a number of companies that have launched satellites or rockets, but generally speaking, corporate space flight is unmanned. NASA is currently using technology first created in the early 1980s in their most "advanced" aircraft, the space shuttles. There has been no significant change in the technology involved in spaceflight since then, despite billions of dollars poured into space research by the US government. In 2004, Virgin Galactic and Mojave Aerospace Ventures teamed up to develop and create a fleet of space craft able to be used by civilians. Their technology is the cutting edge of aerospace technology, and they are already in the middle of testing of the new craft and expects to be able to open their craft for public use in a few short years. In less than five years, a privately-run company has managed to accomplish what NASA hass failed to accomplish since the 1980s... a forward movement of space technology toward common use by regular people, and a massive jump forward in technology. This is a clear case of the private sector being more capable of R&D than the government in all areas.

You are correct when you say that if the government plugs that much money into anything, then they should have a say in it. Where I disagree is that the government should never have plugged all that money in to AIG, GM or any other company.

And keep in mind that it isn't the government's money. It's OURS. WE should be the ones in control, not them.

Elliot

Well said Elliot.
My thoughts precisely.

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Originally Posted by ETWolverine

And keep in mind that it isn't the government's money. It's OURS. WE should be the ones in control, not them.

But this is all from the "Office of People Who Are Much Smarter Than You Are."

Obama has made a corporate decision for GM and Chrysler . They are to cease their marketing and participation of their products in the NASCAR circuit . His Auto Task Force research concludes it isn't worth it . The same demand will be made of Ford if it asks for government assistance.

Make way for the Hyundai and Tata stock car !

Forget Hyundai, bring on the Nascar Lada.

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Originally Posted by NeedKarma

Nascar yee-hah!

It's yeehaw for you non-southerners. I trust you'll be there for the NAPA Auto Parts 200 Nationwide series in Montreal on August 30th?