Government Motors and the Death of the Free Market

When the government interferes with the free market, the results are never good.  The same progressive steps have happened repeatedly over the course of our history and yet we do them over and over again.  Now we are running down the same path; determined that this time will be different.  General Motors is the latest pawn in the game for who has best ideas to run our economy, but the fundamentals of the free market have been thrown out the window.  Over 35 years ago, Amtrak was the government pawn and the talk was about making it profitable in less than 3 years so we didn’t lose the passenger rail system.  Today we still own Amtrak, it’s still losing money, and the government has prevented any competition from taking them down.

Normal free market operation happens when a company produces a product or service and based on its merit, we the people purchase what it sells because we like it.  The company must be run well and as demand for what they sell rises, other companies will compete for your dollars.  This competition will keep prices low and quality high to attract your attention.  If the product becomes unpopular, too expensive or the company is run badly; the business will die and be replaced by something you will spend your money on.  This is the natural business cycle that is propelled by YOU; the free market.

GM has been deemed too big to fail, and the government has stepped in to try to save the thousands of jobs that depend on the automakers success.  Unions have driven up the price of labor along with legacy costs in the billions to pay workers who have long retired.  The result is a company that cannot sustain its own weight, and for a long time GM has spent more money on labor than the car itself.  We the people like the cars they make and we really enjoy our SUVs, but the company is so badly run at this point that it has no hope of survival.  The government took billions of your money and gave it to GM to keep them in business, but that won’t stop the ship from sinking under its own weight.  GM has declared bankruptcy anyway, and now the government is getting even more involved.  The white house has fired their executives, is now limiting their compensation terms and even dictating what kind of cars they must build.  The government can’t tell a company how to be successful; YOU do with your dollars.  GM didn’t produce these cars before because we didn’t buy them, now they don’t have a choice.

Ford should be the big winner in this situation, but the government will make them the big loser.  They didn’t need bailout money because they are a good company and their cars are popular around the world, but now they must pay to keep their competition in operation with their tax money.  The government is telling GM to produce cars that we don’t want to buy, so it will be a black hole for years to come.  In an attempt to make them profitable, the government will change the rules of the game in GMs favor by giving you incentives to buy their products.  Tax deductions and green standards will make GM’s cars cheaper to buy, all while penalizing Ford for being a profitable company.  In the end, no company can compete with a government entity because the government can always tilt things in their favor.  Every private car company will be driven out of business by Government Motors because it’s the only way GM can compete and you will pay the tab for all the loses.  The government can’t tell you what to buy, but they sure will try.

Rather than letting bad banks fail and good banks succeed, the government has disrupted the financial industry and produced the opposite.  Now the government is getting involved in the energy sector and deciding for you what types of energy you should buy and shouldn’t.  Rather than allowing free market solutions to healthcare like Ameriplan and other health plan alternatives, the government created public plans in Medicare and Medicaid which have raised healthcare prices through the roof.  The next step will be to expand the public healthcare system and eventually put 2.3 million people in the insurance industry out of work.  This type of economic "justice" is socialism no matter what they try to call it, and it will ultimately cost your freedom of choice, your tax money, your opportunity for success and eventually your job.  The free market dies a little more each day and leaves many of us wondering; which industry will the government try to "save" next?