Government Ownership of GM is a Bad Idea

President Obama says that the U.S. Government will be a passive investor in GM, not taking any Board seats and not interfering with the running of the company by the "car guys". Once again displaying stunning naivete, the President seems to think that by saying these words, he will somehow address the nagging concern that many Americans have over owning a piece of GM (for crying out loud, we don't even want to buy their cars, let alone own the company). As if the words, delivered by him, will convince us that the U.S. Government has the capacity to be passive owners.

Only thing is . . . didn't the President just fire the CEO of GM a month or so ago? Would that be considered the actions of a "passive" investor. Then again there is the little problem of the fact that the Government regulates the product that GM produces in significant ways (safety, fuel efficiency, to name but two important ones). How does the need to regulate GM get prioritized against the needs of the shareholders?

Oh, and by the way, what happened to the pensions, and promises of lifetime health insurance, for the over 400,000 retired GM workers? No one wants to talk about those multi-billion dollar debts. Let me guess . . . those would now be taxpayer obligations instead of obligations that get wiped out during a bankruptcy proceeding?

I am also guessing that, since we don't actually live in the Kingdom of Obama (despite the desire of some to believe we do), there is another branch of Government that has something to say about how GM is managed. That other branch has GM dealers, some GM plants (though a lot fewer now), and a lot of GM captive businesses in their districts. Does anybody reasonably expect this other branch of Government to play along as passive investors?

This is a train-wreck. The proper use of bankruptcy should have been allowed. The code was designed to help companies like GM to restructure and survive, albeit in a smaller or different form than before. What we have done instead is substitute taxpayer money for the pain that would have accompanied a "real" bankruptcy. Once again, the poor schmuck taxpayers are picking up the tab.

Feel better?